When buying a house in the UK, you may come across the term "restrictive covenant." This is a legal agreement that places certain limitations or obligations on the property.
If you're wondering whether to buy a house with a restrictive covenant, it's important to understand what it entails and how it may affect your plans for the property.
What Is a Restrictive Covenant?
A restrictive covenant is a legal clause in the property deeds that restricts how the property can be used. These covenants are usually placed by a previous owner or the original developer and are legally binding. Some common examples of restrictive covenants include:
- Limiting the type of buildings that can be constructed on the land.
- Restricting the use of the property (e.g., no business use).
- Preventing changes to the exterior of the property without permission.
- Prohibiting certain types of animals or vehicles, such as caravans.
Why Do Restrictive Covenants Exist?
Restrictive covenants are often put in place to maintain the appearance or character of an area. For instance, in a residential neighbourhood, a restrictive covenant might stop a homeowner from building an extension that could block a neighbour's light or from painting the house in bright, unapproved colours.
These rules can help preserve property values and the overall harmony of a community. However, they can also feel restrictive for buyers who have plans to make changes to the property.
How Could a Restrictive Covenant Affect You?
If you're considering buying a house with a restrictive covenant, you'll need to carefully review what limitations are in place. The impact of these covenants can range from minimal to highly significant depending on your intentions for the property. Here's how they might affect you:
- Planning Renovations or Extensions: A restrictive covenant may limit the types of changes you can make to the property, such as adding an extension or changing the exterior design. You may need to seek permission from the covenant holder before proceeding with any alterations.
- Business Use: If you’re hoping to run a business from home, some restrictive covenants specifically prevent the property from being used for commercial purposes.
- Land Use: Restrictions could apply to what you can build on any adjoining land or what you can use the land for, potentially affecting future development plans.
- Shared Amenities or Services: In some cases, restrictive covenants relate to shared spaces, such as private roads or gardens, and could involve obligations to contribute to maintenance costs.
Can You Remove or Modify a Restrictive Covenant?
Removing or modifying a restrictive covenant can be difficult and may require legal action. You would need to contact the original covenant holder, which could be a developer, a previous owner, or even a local council, to request a change. Alternatively, you could apply to a tribunal to have it removed, but success isn't guaranteed.
In some cases, indemnity insurance can be purchased to protect against breaches of the covenant. This can provide peace of mind, particularly if you're unsure whether certain actions might violate the covenant's terms. Learn more about restrictive covenant indemnity insurance here.
Should You Buy a House with a Restrictive Covenant?
Whether or not you should buy a house with a restrictive covenant depends on your long-term plans and the specific restrictions in place. If the limitations don't interfere with your vision for the property, it may not be a significant issue. However, if you're planning major changes or want the freedom to use the property as you wish, it's essential to assess whether the covenant could hinder your goals.
It's always wise to seek legal advice before purchasing a property with a restrictive covenant. A solicitor can help you understand the restrictions and advise on whether indemnity insurance is necessary or if modifications are possible.
Final Thoughts
Buying a house with a restrictive covenant doesn't necessarily mean you should walk away from the deal, but it does require careful consideration. Make sure you fully understand the covenant's terms and how it may impact your plans for the property. Consulting with a legal expert will ensure you make an informed decision and avoid future headaches.
If you're in doubt, always weigh up the pros and cons, and don't hesitate to get professional advice to guide you through the process.