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Restrictive covenants for Property Developers
06 January 2016

What is a restrictive covenant?

A restrictive covenant is a promise by the owner of one property with the owner of another property not to do something with their property in the future.

Why should property developers be concerned about restrictive covenants?

Restrictive covenants often prevent land being developed as they often only allow “one dwellinghouse” to be erected on a fairly large piece land

Isn’t that against current planning policy?

Restrictive covenants have nothing to do with planning permission. The Local Authority may grant planning permission but you may still not be able to develop the land if it is subject to restrictive covenants

How has this madness come about?

Most of the land in England was originally owned by a few large landowners. When they sold off parts of their estates for development they were keen to ensure that crowded and dangerous slum housing was not built on it. That is why another common covenant is that any house erected must be built with materials costing at least £500.00

How can I find out if a property has restrictive covenants on it

Fortunately most land in England is now registered and the Land Registry title of the property should show whether the land is subject to restrictive covenants that might prevent the property being developed. If the land is unregistered the only way to find out if there are restrictive covenants is to obtain and review the old Deeds from the owner of the land.

What can I do if my proposed development site has restrictive covenants on it?

We are experts in restrictive covenants can often assist in a variety of ways. The wording of a restrictive covenant the vital factor in determining its enforceability and we may be able to advise you that it is unenforceable and you have nothing to worry about! If a restrictive covenant is on the face of it enforceable we can often still assist by either helping you to obtain title indemnity insurance against the risk of someone trying to enforce the restrictive covenant or alternatively applying to the Lands Tribunal to have the restrictive covenant removed or varied to allow the development of the land to proceed.

Can you guarantee that you will be able to help me?

Each restrictive covenant has to be reviewed on its own terms as the age of the restrictive covenant, the wording of restrictive covenant and the location of the property that is subject to the restrictive covenant all have to be taken into account when deciding whether it is still enforceable

What is the worst case scenario?

If an area has been developed in the past and the developer at the time imposed a restrictive covenant on all the properties that formed part of the development for the benefit of all the other properties that formed part of the development that is known as a “Building Scheme” and in that case it is almost unheard of for the land that is subject to the restrictive covenant to be developed.

Now you are really scaring me!

Building schemes are quite rare and many restrictive covenants that were imposed in the past to prevent development are now no longer relevant when taking into the account their age and the change in the locality of the property. It is therefore often possible to develop the property in spite of them.

What shall I do next?

Contact Bob Daniel, senior associate - solicitor in the Boyes Turner Property team at [email protected] or on 01189 527 298.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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