Restrictive covenants

Benefit and burden - restrictive covenants 

In order to assist in any dispute, the benefit (the property protected) and the burden (the property hindered) of the covenant needs to be explored fully. The burden (the landowner restricted) will usually have the restriction registered at the Land Registry on their title deeds.

The benefit of a covenant does not need to be on the register to be binding. So it is not enough to check your neighbours Land Registry information to see if it the benefit of the covenants is registered there. It is crucial to consider the original wording of the covenant when it was first put on the land to assess who has the benefit and who has the burden.

The wording of the original covenant may be personal so that only the original parties making the agreement are bound to the terms. Frequently the benefit and burden of the covenant can also be enforceable by subsequent owners of the property.

Usually for a covenant to be binding on subsequent purchasers of a property (called ‘successors in title’) the wording of the covenant needs to expressly make reference to successors or be said to be a benefit or burden attached to the land itself rather than any person.

There is automatic provision under section 78 Law of Property Act 1925 to make a restrictive covenant benefit successors in title. In order for the provision to apply case law sets out that:

• The land intended to be benefited should be so defined that it was easily ascertainable
• The land intended to be benefited could be identified from a description, plan or other reference in the conveyance itself but aided, if necessary, be external evidence
• It must be proven that the benefiting land is land the covenantee (the original contractor) intended to be benefited

The covenant must ‘touch and concern’ the land intended to be benefited and not be personal to the transferor. To ‘touch and concern’ the land it must affect the nature, quality, mode of user or value of the land.

The wording of the specific deed is vital and there are very specific legal findings that both support the automatic provision and make findings as to when the benefit wouldn’t run with the land. 

Construction

It can be accepted that one property has the benefit and the other the burden but the parties may still be in dispute about what exactly the restrictive covenant prevents. Where there is a disagreement as to the meaning, the court will construe the terms with the aim of ascertaining the intention of the parties to the agreement at the time it was made. It will do this objectively by asking itself how the contractual terms would have been understood by a reasonable person in all the circumstances surrounding the making of the contract (‘the factual matrix’ – which can include ‘absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man’). 

Changing restrictive covenants

If you are certain who has the benefit of a covenant that prevents you from doing something you wish to on your land you should in the first instance speak with them.  Making a direct and friendly arrangement with your neighbour is always your best, quickest, and most cost-effective outcome. If you manage to reach an agreement (and think outside of the box for a solution that suits you all) you should have the agreement reflected in a legal document. That might be a general agreement, or it might involve a change of deeds and registration at the Land Registry.

If you are unable to reach an agreement with your neighbour it is possible to make an application to have the covenant changed or sometimes discharged entirely.

There are specific provisions to apply to court (the Lands Tribunal) under S84 Law of Property Act to discharge or modify restrictive covenants affecting land in a limited number of circumstances:

• By reason of changes in the character of the property or the neighbourhood of other circumstances the restriction ought to be deemed obsolete
• That the continued existence would impede a reasonable user where the restriction does not secure practical benefits of substantial value or advantage or is contrary to the public interest and that money will be an adequate compensation for the loss of disadvantage which any such person shall suffer
• The person with the benefit has either expressly or by implication agreed to the discharge or modification, and
• That the proposed discharge or modification will not injure the person with the benefit (subject to payment of compensation)

The compensation element will usually be ascertained by valuation evidence of the loss of value to the property with the benefit (your neighbour’s property). 

For advice in relation to restrictive covenants call our specialist solicitors on 0161 696 6178 or complete our enquiry form and a member of the team will contact you.