Restrictive Covenant

G3ralt

Hello,
FTB here buying a 1930s detached house. We want to extend the house in a few years. However, have noticed this point on the schedule of restrictive covenants:
"I Mr. X hereby covenant with Mr. Y and Mr. Z for the benefit of the remainder of the land comprised in the title to observe and perform the said stipulations:
- No buildings or structure of any kind shall be erected on the said land except in accordance with plans and elevations submitted in duplicate to and approved by the said Mr. Y and Mr. Z"
The transfer of the land from Y/Z to X was dated April, 1937.
Question is whether it would be a breach if we just take planning permission and extend?Any help much appreciated.

princeofpounds

Yes, it would be a breach. But you need to understand what the consequences (or not) of a breach would be. 

Only the beneficiary of a covenant can enforce the covenant. Those beneficiaries may well be dead, so the covenant may be meaningless. Usually however, restrictive covenants like this are attached to other parcels of land, not individual people. So the beneficiary may not actually be Mr Y and Mr Z nowadays, but someone else who owns the land they used to own. You'll need to read the original conveyance closely to determine that. Maybe get a lawyer to give it a once-over and explain your situation (shouldn't take them more than an hour or so to give you a quick legal opinion).

There are many cases where people have happily breached covenants as the original beneficiary is no longer capable or interested in enforcement - often because they no longer exist. It can cause a bit of an issue whilst selling, and the normal solution is to buy an indemnity policy. If you dig into it, you'll realise this system leaves a lot to be desired in terms of the legal details, but it works out fine 99% of the time. 

If the beneficiary does pop up and start enforcement then it's a different ball game. Early on in the process they could get an injunction to stop you. Later on, a court might have to exercise more discretion around what is a just outcome.

Actually removing covenants is another issue altogether. It's very rare, and involves a lengthy and expensive tribunal process, and requires you to have strong grounds to justify it (that go well beyond the fact that you don't want it!). The only time I've heard of it being done (not that I have read a lot, this is just an anecdote) is in situations where there is a covenant that prevents development on a large plot and there is a strong public interest to develop that particular plot. 

greatcrested

Presumably you are not Mr X? So you are not bound by the covenant.

Unless, of course, elsewhere there is some clause that Mr X will also covenant that any successors in ownership of the property will agree to similarly bind themslves. You may find you have to sign something as part of the purchase.

steampowered

It sounds extremely unlikely that anyone would bother to enforce this restrictive covenant. It's extremely old - Mr X and Mr Z are likely to be deceased.

Might be worth asking your conveyancer / solicitor though.

princeofpounds

greatcrested said:

Presumably you are not Mr X? So you are not bound by the covenant.

Unless, of course, elsewhere there is some clause that Mr X will also covenant that any successors in ownership of the property will agree to similarly bind themslves. You may find you have to sign something as part of the purchase.

That's a fair point. Similarly to the benefit of covenants, covenants are normally attached to the land and not to an individual. They normally have to bind successors in title as well, which is easier for restrictive covenants (ones that prohibit you from doing things) and harder for positive covenants (ones that compel you to do things).

It sounds like it is a possibility that this covenant may not bind you as a successor in title to the land, only Mr X. But again you'd need to read the whole conveyance properly to be sure.

If I wasn't clear earlier on, it seems very likely you are going to be fine here, but just wanted to give you some context around the issue.

G3ralt

Thanks for the responses. We shall ask our solicitor about this. Looking at the covenants, it seems that Y and Z used to own land in the neighbourhood so we looked up the title for the neighbours as well and they have this exact same restrictive covenant. However the neighbours had extended around 1998 (checked planning applications).
One other thing I noticed was that the covenants don't say anything about successors anywhere. I was wondering if a covenant could be tied to the land one buys so automatically anyone buying would be bound by them? 

AdrianC

G3ralt said:

One other thing I noticed was that the covenants don't say anything about successors anywhere. I was wondering if a covenant could be tied to the land one buys so automatically anyone buying would be bound by them? 

They normally are. A covenant that wasn't would be fairly useless in enforcing such restrictions.

But, as already said, in practice it's almost certainly academic. Mr Y and Mr Z will be long since dead, and I very much doubt the beneficiaries of their wills will even know that they need to give permission... much less care whether you do or not.

Unless those people come forward, and produce the proof that they're the beneficiaries of the covenant... nothing's happening. Even then, it's only likely to be a court case for a bit of financial recompense which they'd probably lose.

sgun

We have that covenant on our house and it is still enforced. We live in a historically feudal area of Northumberland where the land is carved up into estates and managed by the landowners (think like the Duke of Northumberland etc). A management company administrates the covenants. Previous owners converted the garage to a room and had to get retrospective permission which cost £600. We bought an indemnity for the conservatory that they had also constructed, we don't think the company would bother with enforcement for that so happy with the risk. The buyers before us pulled out as they wanted to do a double stirey extension off the back and were quoted an "extorionate" fee to be allowed to do this. I have no idea what they were asked for though as I don't want to extend.
So yes - possible that there is someone still around who would have an interest in enforcing it. I would dig a bit more into who the landowners are.

eidand

A bit unrelated to this but still on topic.
If the property is freehold doesn't that mean that  once you buy it, you own the land as well, in which case how on earth does a covenant even apply? I am sure I am missing something simple

princeofpounds

eidand said:

A bit unrelated to this but still on topic.
If the property is freehold doesn't that mean that  once you buy it, you own the land as well, in which case how on earth does a covenant even apply? I am sure I am missing something simple

http://researchbriefings.files.parliament.uk/documents/CBP-8560/CBP-8560.pdf
Yes freeholds can be subject to covenants. It's not quite the same legal underpinning as leaseholds, technically, but there are plenty of parallels.

One of the topical issues at the moment is so-called 'fleeceholds' in the sales of new build properties - freehold properties that are burdened with so many covenants and rent charges that it almost seems silly to call them freehold.

But covenants have a long established and very useful place in land law - there's a reason they exist! Very often people will want to buy property, and owners might be willing to sell, but will not do so without restrictions for fear that something will be done on that land that they cannot tolerate. Committing to a covenant is a way of reassuring them that this will not happen, and enable the sale under these conditions that benefits all parties.

DoaM

eidand said:

A bit unrelated to this but still on topic.
If the property is freehold doesn't that mean that  once you buy it, you own the land as well, in which case how on earth does a covenant even apply? I am sure I am missing something simple

Most new build houses come with restrictive covenants in the deeds (missives in Scotland) that prevent freehold owners doing certain things ... e.g. erecting a wall around their front garden, fitting a Sky dish to the property frontage, parking work vans overnight, parking caravans on the estate, etc. These are for the benefit of the site developer so that the estate has a uniform appearance to it, which developers feel improves the sale-ability of the properties. Whilst a developer may not enforce such covenants, they can do. Once the estate is complete and the developer no longer has an interest then the covenants still exist but the beneficiary (developer) is often no longer concerned.