When selling or purchasing a residential property, it is essential to understand any restrictions which may apply. These restrictions can be contained in documents such as your Title Register or Lease, and can have a significant impact on your use of the property and may limit your ability to carry out certain works, such as building an extension, conservatory, and other structural additions or alterations.
At O’Donnell Solicitors, we can advise you on these issues if and when they arise, for example if you are purchasing a property and looking to make improvements, or if you are selling a property where works have already been carried out we would make you aware if such restrictions applied and navigate how we proceed from there if there has been a breach of covenant.
What are Restrictive Covenants?
Restrictive covenants are legally binding promises that limit how land or property can be used. They can range from prohibiting the running of a business from the property to restricting the construction of extensions or outbuildings.
In practice, this means that a property owner may be legally prevented from building a rear extension, conservatory, garage, or even making loft conversions unless specific conditions are met and consent obtained.
How do these Restrictions affect Buying or Selling?
When selling a property, undisclosed or misunderstood restrictions can delay or even jeopardise the transaction. If a prospective buyer or their solicitor discovers a breach, such as an extension built without the required consent, they may seek indemnity insurance, retrospective consent, or decide to walk away from the sale.
For purchasers, it is crucial to understand what you can and cannot do with the property before committing to the purchase. For example, if you are buying with the intention of extending or adding a conservatory, a restrictive covenant could put a stop to your plans or at least complicate them.
A common issue is the assumption that planning permission is the only hurdle. While obtaining planning approval and building regulation sign off is absolutely necessary, it does not override the need to comply with any legal restrictions that apply to the property.
Covenant Consent: A Potentially Overlooked Requirement
Some restrictive covenants require the homeowner to obtain consent from a named party before proceeding with works on the property. This is known as covenant consent.
Failing to obtain this consent can lead to complications when selling the property later down the line. A buyer’s solicitor is likely to flag any unauthorised work.
If consent is required, it is not always straightforward. The named party may request detailed plans, charge a fee, and then still withhold consent. It is encouraged that you seek legal advice on this point if you are looking to do these works.
What if there has been a Breach?
If you or we discover that works have been done in breach of a restrictive covenant or without the necessary covenant consent, there are a number of potential remedies:
- Retrospective consent: in some cases, you can apply for retrospective consent, though this may involve negotiation or fees.
- Indemnity insurance: this is often used when unauthorised works have been in place for several years without objection. This will protect against the risk of enforcement but it may not be available if the breach is recent or if contact has already been made known to the benefiting party.
- Modification or discharge: under section 84 of the Law of Property Act 1925, it is possible (though rarely used) to apply to the Upper Tribunal to discharge or modify a restrictive covenant.
Final Points
Whether you are buying or selling, it is crucial to consider how these types of restrictions may impact your transaction. What seems like a straightforward home improvement project can become complicated without the proper legal due diligence.
At O’Donnell Solicitors, our experienced residential property team can help you navigate these complexities, from reviewing the necessary documents to advising on appropriate ways to move forward.
If you are unsure on whether your property is affected by these restrictive covenants or you need advice before going ahead with an extension or conservatory, please do not hesitate to get in touch.
