Understanding Property Covenants: A Comprehensive Guide
Prospective property buyers need to be vigilant about property covenants, as these can significantly impact future plans for the property. Violating a covenant can result in substantial financial penalties and other legal consequences.
What is a Covenant?
A covenant is a legally binding obligation included in the title deeds of a property, which new owners must adhere to. These obligations are usually perpetual, making it crucial for buyers to be aware of any covenants affecting the property they intend to purchase.
Types of Covenants
Covenants fall into two main categories: positive and restrictive.
Positive Covenant
Positive covenants impose obligations on landowners, often referred to as 'burdens' in legal terminology. These typically require future owners to perform specific activities or contribute financially to something within the land's boundaries. Positive covenants involve two parties: one benefiting from the covenant and the other burdened by it.
Restrictive Covenant
More common than positive covenants, restrictive covenants limit what landowners can do within their property's boundaries. These covenants often prohibit certain activities or alterations, such as construction work, there is usually a beneficiary who has the right to enforce these restrictions.
Common Examples of Covenants
Restrictive Covenants:
- Prohibiting alterations to a property (e.g., building extensions or converting a house into flats).
- Preventing the construction of buildings or substantial structures on specific sections of land.
- Restricting commercial activities or businesses from operating on the land or within the property.
- Banning the keeping of livestock on the property.
Positive Covenants:
- Maintaining a fence or shared driveway.
- Repairing a shared roof.
The Purpose of Covenants
Covenants allow landowners to control how the land they are selling will be used or maintained. These covenants might originate from the initial sale of land, such as from a Greenfield site to a residential developer. The seller may include restrictive covenants to ensure the area remains residential or that any permitted building alterations are consistent with the area's character.
Consequences of Breaching a Covenant
The repercussions of breaching a covenant vary depending on its nature, violating a covenant can result in costly remedies, such as undoing significant projects like extensions. Additionally, you might face fees or legal action, therefore understanding your property deeds is essential before undertaking any major changes.
Modifying or Removing Covenants
If you find a covenant on your property deeds that you consider unreasonable, you can apply to the Lands Chamber of the Upper Tribunal for modification or discharge. This process can be expensive and time-consuming. In some cases, compensating the beneficiary of the covenant might be necessary, in addition to covering legal fees.
Frequently Asked Questions
How to Find Covenants on a Property:
When purchasing a property, ask your conveyancer to thoroughly examine the title deeds for any covenants. Once you sign the deeds, these covenants become your responsibility, regardless of whether you were aware of them. Breaching a covenant can result in liability even if you were unaware of its existence.
Should I Buy a House with a Restrictive Covenant?
The decision depends on the nature of the restrictive covenant. If it restricts activities you were not planning to undertake, such as specific building alterations, it might not influence your buying decision. However, if you envision significant development on the property, checking for restrictive covenants is essential.
Are Covenants Legally Binding?
Properly established covenants are legally enforceable. It is crucial to determine if a covenant 'runs with the land,' meaning it applies to all future owners, or if it was only enforceable on the initial owner.
How Long Does a Covenant Last on a Property?
Covenants are typically perpetual and do not expire. However, some very old covenants may be considered unenforceable due to their age or irrelevance. Factors such as the inability to trace the original landowner, unclear wording, or historical obsolescence can render some covenants unenforceable.
What is a Deed of Covenant?
A deed of covenant is a legal document in which the party burdened with a covenant promises to fulfil the obligations specified by the covenant.
Understanding property covenants is crucial for any prospective property buyer. Being informed can prevent future legal and financial complications and ensure that any property purchase aligns with your long-term plans. Always consult with your conveyancer to uncover any covenants attached to your potential property.
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