Covenants are rights or limitations that govern how to make use of a piece of property. They can be positive or negative and are transferred with the title to a new homeowner.
‘Restrictive covenants’ tend to be beneficial and can be located in both ownership and leasehold titles. These are regulations prohibiting certain uses of the piece of land, such as keeping animals or conducting commerce.
Other typical covenant may include maintaining a fence in good condition and restricting the property’s use to residential purposes only. The person who is entitled to the covenant’s benefits (typically the landowner) has the authority to enforce it.
How commonly are covenants from my property utilised?
Each property’s title deeds contains some type of covenants. Your solicitor will explain what these are and the way they might limit your utilisation of the property.
It is common for leasehold properties to include a clause prohibiting structural alterations and additions without the landlord’s permission. In such a case, your attorney will provide you with the contact information for the beneficiary of the covenant, so that you can approach them if you decide to make such enhancements. In addition, it will be necessary to obtain any necessary approvals from the seller’s attorney for any project that has already been completed.
If the parties that ‘benefit of the covenant’ is absent or hard to contact, your solicitor may recommend legal advice to purchase indemnity insurance to protect you, your mortgage lender, and any future proprietors of the home against a claim for potential covenant violations. This will continue indefinitely at the seller’s expense.
I have a problem with a house with a restrictive covenant that I intend to purchase. What options is available to purchase a property?
You might be interested in purchasing the property deeds, which could enable you to have certain constraints removed. However, as stated previously, covenants can also be imposed on freehold properties, so there is no assurance that you will not be required to comply.
It is highly unlikely that someone who benefited from the covenants will conduct inspections to enforce them. However, prior to proceeding with a new build, your attorney will verify that they were all complied with by previous proprietors as well as make you conscious of any issues, so you are aware of the current situation.