Understanding Property Covenants: A Comprehensive Guide
When you're in the process of buying property, especially in a bustling market like London, understanding the finer details of property ownership is essential. One critical aspect that can significantly impact your plans is the property covenant.
These legal obligations might seem complex at first, but with the right information, you can navigate them confidently. This guide aims to explain property covenants in detail, including their types, implications, and how they might affect your property purchase.
What is a Property Covenant?
A property covenant is a legally binding obligation contained within the title deeds of a property, these covenants impose certain restrictions or duties on the property owner, and they are usually meant to last indefinitely. As a potential buyer, it's crucial to be aware of any covenants associated with the property you're considering, as they can influence your ability to make changes or use the property in specific ways.
The Different Types of Covenants
Covenants generally fall into two categories: positive covenants and restrictive covenants, understanding these distinctions will help you better comprehend the responsibilities and limitations you might face.
Positive Covenant
Positive covenants require property owners to perform specific actions or make financial contributions towards certain activities within the property’s boundaries. In legal terms, these obligations are known as ‘burdens.’ They often involve maintaining shared spaces or contributing to communal repairs. For example, a positive covenant might require you to:
- Maintain a shared fence or driveway: Ensuring these common areas are kept in good condition.
- Contribute to roof repairs: Participating in the upkeep of a shared roof if you live in a building with multiple units.
These obligations are generally shared among all property owners within a particular development or building, ensuring that communal areas are well-maintained.
Restrictive Covenant
Restrictive covenants are more common and typically place limitations on what you can do within your property’s boundaries. These covenants specify prohibited activities or alterations, ensuring the property is used in a manner consistent with the original landowner's intentions. Common examples include:
- Prohibiting property alterations: Such as preventing you from building an extension or converting a house into flats.
- Restricting construction: Banning the erection of buildings or substantial structures on certain parts of the land.
- Limiting commercial activities: Forbidding the operation of trades or businesses on the property.
- Banning livestock: Preventing the keeping of animals like chickens or horses on the property.
These restrictions help maintain the character and purpose of a neighbourhood, often preserving its residential nature or aesthetic appeal.
Why Are Covenants Needed?
Covenants provide a way for original landowners to control how the land they sell is used. They might be established during the initial sale of land, especially when converting Greenfield sites into residential developments. The goal is to ensure that the area remains in line with the original vision, whether that's maintaining a purely residential environment or preserving specific architectural styles. For example, a seller might include a restrictive covenant to prevent future owners from making unsightly modifications that could devalue the surrounding properties.
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What Happens if You Break a Covenant?
Breaching a covenant can lead to serious consequences, depending on the nature of the violation. Common repercussions include:
- Undoing Unauthorized Changes: If you’ve made alterations that violate a covenant, such as building an extension, you might be required to revert the property to its original state, which can be costly.
- Financial Penalties: You could face fines or be required to pay damages to the party benefiting from the covenant.
- Legal Action: In some cases, the beneficiary of the covenant might take legal action to enforce it, leading to further expenses and complications.
This is why it's vital to thoroughly understand any covenants before undertaking significant changes to your property.
Can You Change or Remove Covenants?
If you find a covenant on your property deeds that seems unreasonable or overly restrictive, you have options to modify or remove it, though these processes can be challenging and expensive:
- Application to the Lands Chamber of the Upper Tribunal: You can apply to this legal body to have the covenant modified or discharged. However, this involves legal fees and possibly compensating the party benefiting from the covenant.
- Negotiating with Beneficiaries: In some cases, you might negotiate directly with the beneficiaries to agree on a modification or removal of the covenant, this can also involve compensation and legal costs.
Frequently Asked Questions
How to Find Covenants on Property
When you’re buying a property, your conveyancer should thoroughly review the title deeds for any covenants. It’s essential to know about these obligations before completing the purchase because once you sign the deeds, you become responsible for adhering to them. Breaching a covenant, even unknowingly, makes you liable for any consequences.
Should I Buy a House with a Restrictive Covenant?
Whether you should buy a property with a restrictive covenant depends on the nature of the restriction and your plans for the property. If the covenant doesn’t interfere with your intended use, it might not be a significant issue. However, if you plan substantial modifications or developments, it’s crucial to check for restrictive covenants that could hinder your plans.
Are Covenants Legally Binding?
Covenants are legally enforceable as long as they have been properly established. Ensure you understand if a covenant ‘runs with the land’—meaning it applies to all future owners—or was intended only for the original owner. Properly established covenants can be enforced by the benefiting party.
How Long Does a Covenant Last on a Property?
Covenants typically last indefinitely unless they are specifically time-limited, which is rare. Even covenants from the 19th century or earlier can remain legally valid. However, some old covenants might be deemed unenforceable if they are outdated, poorly worded, or if the original parties cannot be identified.
What Does a Deed of Covenant Mean?
A deed of covenant is a legal document in which the party bound by the covenant promises to fulfil its obligations. This document ensures that future property owners continue to uphold the agreed-upon restrictions or duties.
Contact Felicity J. Lord for Property Assistance
Are you considering buying a property? Understanding property covenants is crucial in making an informed decision. Contact Felicity J. Lord today for expert guidance. Our team in London is ready to assist you in navigating property covenants and finding your ideal home.
Let us help you move forward with confidence, ensuring you’re fully informed about every aspect of your property purchase. By familiarising yourself with property covenants, you can avoid potential pitfalls and enjoy your new home without unexpected legal or financial challenges. Reach out to Felicity J. Lord and let us make your property journey smoother and more transparent.
