Enforcing a Restrictive Covenant

Enforcing a Restrictive Covenant

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Overview

Restrictive Covenants are enforceable through court process if they are still viable, and so it needs to be established whether or not the covenant has become redundant and if not, whether it remains capable of enforcement.

 

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Purpose of Restrictive Covenants

Restrictive Covenants are legally binding terms of a contract that are binding on a purchaser of a property because they are incorporated in the terms of the contract or are already present in the registered documents of the property. Restrictive Covenants “run with the land”, i.e. once they are registered they are binding on all subsequent purchasers.

The purpose of a Restrictive Covenant is to benefit the property in some way, for example:

1. An old fashioned example may be not to use the property for the purposes of carrying out the manufacture of soap therein. This would reduce the risk of pungent odours for the area in general. Likewise, a covenant not to store hazardous materials would reduce the risk of fire or explosions. In such cases this would protect not just the property itself, but other properties in the area built by the same developer.

2. A more modern example may relate to a property in a gated estate that contains a covenant not to place satellite dishes on the facade of a house within the estate, as this may detract from the value of the property and other properties within the estate.

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Status of a Restrictive Covenant

Before enforcing a restrictive covenant regard must be had as to whether it has become obsolete, or whether its terms could be varied to something more acceptable or more in keeping with modern times.

You should note that the covenant can only be enforced by the beneficiary of the covenant. This generally refers to the owner of the property but it sometimes happens that the benefit of the covenant is annexed to someone else, as where part of a property subject to Restrictive Covenants is sold to another who then claims the benefit of the covenant. A Court of Appeal case in 2020 (Bath), which must now be followed, held that the wording of the covenant must clearly show an intention (with no vagueness) to pass its benefit to any successors in title claiming annexation.

There are four registered documents that are a must to look at before embarking on the costly expense of enforcement through the courts.

These are:

1. The Title Register
2. The Title Plan
3. The Deed creating the Restrictive Covenant
4. Subsequent Deeds that Vary the terms of the Restrictive Covenant

These documents will all describe the Restrictive Covenants affecting the property. You should carefully study the wording of the relevant Restrictive Covenant to ensure:

1. That the Covenant is in fact registered i.e. that it appears in the Title Register. If it has not been registered then it should not be binding. In the event that the property was not registered at the time the covenant was made then the covenant should have been registered with the Land Charges Department of the Land Registry in Plymouth. It would be prudent to ensure that this step was taken as otherwise it may not be enforceable.

2. That the covenant is a Restrictive Covenant, appearing in the C section of the Register, and not merely a Personal Covenant, appearing in the B section of the Register. Personal Covenants do not run with the land, that is to say, once the property has been sold the covenant will not bind the new purchaser, unless he has also entered into a similar covenant.

3. That there is a breach in actuality. The wording of the covenant is usually long winded but should leave no doubt as to what the restriction is. If the covenant is ambiguous then it may not be enforceable. You should look at the Title Plan to ensure that the area of the property affected is where you expect it to be.

4. You should also look for the identity of the covenantor so that you can determine, in the event the covenantor is a business, that the said business continues to trade. If it does not then the covenant might now be defunct. If the covenantor cannot be traced then again, it may not be enforceable.

5. You should satisfy yourself that the Restrictive Covenant benefits your property in some way, so it cannot be a personal covenant as in the example at 2 above, that it is of benefit to you as the current owner and that its removal would cease that benefit, and further, that the covenant affects either the value of the land, the nature of the land, the quality of the land or your use of the land.

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Enforcement of the Restrictive Covenant

If you are satisfied that the covenant does and should remain, the first step to enforce it is to write to the covenantor to provide details of the breach and ask him to cease. This is usually better coming from your solicitor.

Your solicitor, if not satisfied with the covenantor’s response, will issue court proceedings for an injunction and damages. The injunction will prevent the covenantor from progressing with the breach and require him to rectify the same, e.g. to remove a building extension erected in breach of the covenant. The injunction is usually obtained earlier on during the proceedings, and the award of damages at the conclusion thereof.