Are House Covenants Enforceable?

White bed cover on bed

When buying or selling a property in the UK, both buyers and sellers often come across restrictive covenants attached to the land or building. These clauses limit how the property can be used to uphold standards, preserve character or protect neighbours’ interests. But with many covenants outdated or unreasonable, their legitimacy and enforceability are frequently confused.

This article examines the key issues around enforcing covenants on UK homes. It weighs up the competing interests of preserving covenants versus removing constraints that hamper property improvements or sales. We explore the murky legal territory around upholding, challenging or discharging covenants, and what this means for buyers and sellers navigating archaic deeds.

Defining Covenants

A covenant represents a binding promise relating to land ownership, outlined in the property’s title deeds. These clauses set obligations or restrictions on the land, which bind current and future owners.

Common types of covenants include:

  • Freehold covenants – These restrict works or use of land, for example banning business activity in a residential area.
  • Leasehold covenants – Clauses in a lease requiring landlords’ consent for alterations or preventing subletting fall into this category.
  • Building covenants – These control modifications, such as guidelines on fencing or extensions to uphold aesthetic standards.
  • Restrictive covenants – These limit how the property is used, like prohibiting commercial activity in a housing development.

Covenants act like a contract between the landowner and their successors, seeking to maintain standards, manage disputes and define how the property functions alongside neighbours.

The Case for Upholding Covenants

In principle, covenants aim to protect the amenity and character of neighbourhoods in ways planning regulations alone cannot. Preventing unchecked conversions, inappropriate business uses or unsympathetic building works avoids disruption, eyesores or devalued properties. Maintaining collective standards through covenants thereby benefits the wider community.

Many covenants also preserve intrinsically important architecture like listed buildings. Sensitive interventions that respect heritage are vital, meaning covenants play a key role in safeguarding UK-built history. Supporters thereby argue that covenants should stay enforceable to promote civic responsibility.

Making a covenant legally binding on perpetuity gives it necessary force. While residents may intrinsically want to keep their area’s sense of place, covenants give reassurance that the environment cannot be unilaterally altered by individuals to the detriment of others. For communal interests to prevail over personal preferences, the ability to mandate standards through covenants remains essential.

The Case Against Enforcement

However, the flipside argues that enforcing outdated, unwarranted covenants becomes unreasonable interference infringing on owners’ property rights. Houses do not exist in isolation – the evolving nature of communities necessitates flexibility to adapt buildings accordingly.

In themselves, covenants may not be inherently problematic. The issue arises when covenants drafted decades or centuries ago, reflecting social norms and property uses of the time, become entrenched without recourse to modernisation. Expecting compliance regardless of changing contexts gives covenants unjustified control.

Critics contend that enforcing covenants can thereby do more harm than good if they stifle improvements, alterations and sales required to keep neighbourhoods vibrant and responsive. Homeowners foreseeably require greater autonomy to serve their property’s present-day purpose.

Legality of Covenants in UK Law

The enforceability of covenants ultimately rests on interpreting their legal validity. Under the Law of Property Act 1925, land obligations or restrictions only bind successors if they meet certain conditions:

  • Made between the owner of the land and the benefiting party (e.g. neighbours)
  • Registered as a land charge
  • Still, serves the intended purpose and provides benefits.

Additionally, covenants must not contravene human rights or equality laws by discriminating against protected groups. This makes void any covenants prohibiting sale to certain demographics. However, covenants dealing with inanimate factors like building works remain enforceable if legally valid.

In disputes, courts assess whether the covenant aims to protect a legitimate interest, and if enforcing it would cause an unreasonable impact on the owner’s enjoyment of property. But judges still tend to favour upholding covenants made between private parties.

Removal and Discharge of Covenants

Some now – outdated covenants impose unjustified burdens, leaving homeowners seeking removal recourse through:

Discharge – All parties agree to revoke the covenant, executed as a Deed of Discharge. This requires cooperation but can be arranged between neighbours or through transaction solicitors.

Alteration – Benefitting parties agree to modify restrictive covenants to permit required works, through a Deed of Variation.

Court order – Applying to the Lands Tribunal can discharge covenants demonstrated as obsolete, non-beneficial or impeding reasonable use of the property. But the process is slow and costly and success rates are low.

Indemnity insurance – Covers financial loss from future claims against altered property in breach of covenants. This enables alterations without discharge but carries ongoing premiums.

These options provide some paths to loosening problematic covenants’ grip. However, routes remain limited if benefiting parties prove uncooperative or intransigent to modernisation.

Impact on Property Transactions

For sellers, restrictive covenants can hamper making homes market-ready, or deter buyers who do not want limitations imposed on their plans for the property. Removing problematic covenants before listing can enhance value and saleability.

Equally, buyers must review covenants carefully to assess impacts on intended use and alterations. Breaching covenants risks injunctions or court orders to reverse non-compliant works, adding stress and costs. Inheriting covenants through land transfer also binds buyers to obey any linked obligations like maintenance contributions.

While covenants do not inherently prevent property sales, restrictive ones can make transactions more complex. Buyers may demand covenant discharge or indemnity insurance to proceed if limitations seem unreasonable. Lengthy negotiations around covenants also slow down conveyancing.

For owners aiming for a quick house sale, proactively discharging or altering unworkable covenants through the consent of neighbours simplifies matters for buyers, smoothing sales. However, if consent gets denied, they have little choice but to disclose restrictive covenants.

Managing Covenants in Transactions

When covenants feature in the sale process, how can sellers and buyers navigate these judiciously?

For sellers:

  • Highlight any covenants at the earliest opportunity in particulars to avoid wasting buyers’ time.
  • Review the relevance of covenants and consider discharge if they may impede transactions or value.
  • If unable to remove covenants pre-sale, obtain indemnity insurance to reassure buyers.
  • Respond promptly and flexibly to buyers’ covenant queries, seeking neighbour consent if requested alterations seem reasonable.

For buyers:

  • Research the property and neighbourhood early to ascertain if any covenants apply.
  • Carefully assess impacts on your plans – would covenants prevent intended changes or uses?
  • Seek removal, variation or indemnity insurance from the seller on covenants that concern you.
  • Be prepared to adapt plans slightly if blanket covenant discharge proves unattainable.
  • If covenants prohibit any essential aspects, consider withdrawing from sale.

Acting reasonability and proactively on both sides can avoid deals collapsing due to problematic covenants.

Conclusion

Navigating the complex legal landscape around covenants can be challenging, as blanket enforceability is neither practical nor fair in modern contexts. While covenants once served communal interests, rigid application today often hampers beneficial improvements and might slow down your house’s quick sale. With careful negotiation, however, owners can reach workable compromises between protecting heritage and allowing evolution, ensuring a smooth and efficient process for those looking to quickly sell a house.

Ultimately, covenants highlight the delicate balance between individual homeowner rights and collective responsibilities. Neither interest can prevail absolutely without detriment to the other party. Amending the worst excesses of covenant enforceability restores equilibrium, bringing communities together in the covenant’s founding spirit of consensus and compromise, which can be particularly beneficial when aiming for a house to quickly sell.

We are proud members of...

  • NAPB
  • RICS
  • The Property Ombudsman
  • Trading Standards

We are proud to be the most regulated property buyer operating in the ‘Quick House Sale’ industry. We are an active member of the NAPB (National Association Of Property Buyers) and are RICS regulated, which means you can have every confidence of selling your home with us quickly & easily.