Restrictive Covenants in Property: What Buyers Should Watch Out For
When purchasing property in England and Wales, buyers often focus on price, location, and condition. However, legal restrictions affecting how a property can be used are sometimes overlooked. One of the most important of these is restrictive covenants, which can significantly limit what an owner can do with their property.
What is a Restrictive Covenant?
Restrictive covenants are often imposed by developers or previous landowners to preserve the character or value of an area and are commonly encountered in residential transactions.
Typical examples include restrictions on building extensions, using the property for business purposes, altering its external appearance, subdividing the property, or parking certain types of vehicles.
Although these restrictions may appear straightforward, their legal effect can be complex. Questions may arise as to whether a covenant remains enforceable and who has the benefit of it. In some cases, even long-standing covenants may still bind current owners.
Consequences of Restrictive Covenants
Restrictive covenants can significantly impact how a property is used or developed, potentially affecting its value and future.
If breached, the party with the benefit of the covenant may take legal action, including seeking an injunction or claiming damages. This can lead to costly disputes or delays, particularly during a sale or refinancing.
Given these risks, it is important to understand the implications of any restrictive covenants affecting a property. Professional advice can help clarify your position and address potential issues.
Conclusion
Restrictive covenants are a key aspect of property due diligence and should not be overlooked. Understanding these restrictions at an early stage can help buyers avoid unexpected limitations and potential disputes.
At Chan Neill Solicitors LLP, our Residential Property team advises clients on all aspects of property transactions, including identifying and managing risks associated with restrictive covenants.
