Restrictive Covenants

Restrictive covenants: How to deal with the potentially project-halting restrictions which might have been placed on your new self-build plot.

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Purchasing a plot is only the first step in the process of constructing a self-built home, and many self-builders find that even having purchased their ideal site, restrictive covenants, wayleaves, and easements can get in the way of their project. These restrictions can be imposed by parties completely unknown to the self-builders, and even where planning permission is in place this does nothing to undermine the restrictions. Therefore, it is essential that when purchasing a plot you and your solicitor find out whether any restrictions are in place.

Find out here about the pitfalls of self-building.

Restrictive Covenants

A covenant is attached to the title of the land. In Scotland a covenant is known as a ‘burden’, which may in fact be a more apt name considering the nature of covenants and their effect on a project. Restrictive covenants are usually put into place by the previous owner of the land, or the vendors, and they are binding on any owners of that land or any owners to come in future.

You can find details of any covenants through the Land Registry or the Registers of Scotland. Whilst some restrictive covenants will be old and their reasons for being instated outdated, others will be new and only recently put in place.

However, no matter the age of a covenant, it cannot be removed or disregarded unless it is extinguished by agreement. Extinguishing a covenant will usually involve some kind of payment  or an expensive and time-consuming application to the Lands Tribunal.

A covenant can also be very obscure, especially if it has been in place for many years and is no longer relevant to current ways of living. For example, a cottage which was recently for sale in Essex had placed upon it a restrictive covenant which prohibited the occupiers of the house from salting pork in the lounge. This is a perfect example of a covenant which the Lands Tribunal would most probably be willing to reverse for the new owners or self-builders.

The most restrictive covenants which a self-builder can face are blanket restrictive covenants, which prohibit any kind of development of the land or even explicitly restrict the construction of a dwelling on the land. In cases where the covenant is ‘live’ and its beneficiaries are known this can be particularly troublesome, and in order to have it removed a form of compensation may need to be agreed upon. Otherwise, the self-builders can apply to the Lands Tribunal providing there is reason to believe that the original reasons for putting the covenant into place have since become defunct. These kinds of applications do tend only to have a small chance of success.

A self-builder will usually find him or herself in a much better position in cases where the covenant is ‘dead’, meaning that although it still exists it does not seem to have any traceable beneficiary. In these cases, rather than have the covenant removed it is much easier to purchase a Single Premium Indemnity Policy. This you should be able to arrange via a solicitor. The premium is established by reference to how likely or unlikely a beneficiary is to come forward. Most of the time you can expect to purchase a premium for around £200.

For self-builders, the most common kind of restrictive covenant they are likely to find in their way is one within the contract for sale and eventual title which restricts developers from fitting, for example, windows at above a certain height which would grant views over their own property. It may be the case that the building is limited to a single storey.

This is where even planning permission cannot undermine the covenant. Even where the planners want the building to have windows overlooking the vendor’s dwelling, the covenant takes precedence and the windows cannot be located where the planning permissions allows. Planning permission only says that the builders may build, but not that they can actually go ahead and do it. The granting of planning permission does not do anything in the way of removing the legal impediment of a restrictive covenant.

One of the kinds of covenants which is regularly imposed by vendors is that which prohibits the construction of approved plans without the vendor’s own permission. The vendor is given the right to approve the details and design of the dwelling built on the land, but the courts have deemed it such that the words ‘such consent not to be unreasonably withheld’ are implied even in cases where the covenant is designed in such a way as would try to exclude them.

An inexperienced solicitor may attempt to deter a self-builder from a certain plot restricted by a certain covenant without actually researching the possible ways of getting around it. It may be found that some will need prompting to take action and seek out an Indemnity Policy.

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