A covenant is a legally binding promise to do something (a positive covenant) or not to do something (a restrictive covenant).
Richard Hamilton – Head of Property at Davis Blank Furniss – discusses Covenant Consent.
If you are a homeowner or you are in the process of acquiring a new home, you need to ensure that you fully understand any covenants that are included in your legal title that could prevent you from performing certain actions on the land (Restrictive Covenants) or which compel you to take certain actions (Positive Covenants.).
This blog relates to extending or building of a residential property.
The most common restrictive covenants are:-
- · To disallow any building on a section of land;
- · To disallow any alteration or extension to a building;
- · To disallow any business activity on the land.
You need to be wary of such restrictive covenants as it may mean that you, as the homeowner, need to obtain consent from a third party before you carry out any restricted activities. This will be referred to as Covenant Consent.
The main issue for homeowners is building, renovating, or altering an existing residential property. Within your title you may require consent from a freeholder, superior leaseholder or a predecessor in title to enable you to carry out the required building works.
In most instances the third party will charge a fee for providing the Covenant Consent, but provided you comply with the stipulations within the title deeds then this consent should be forthcoming and it is invariably cheaper to obtain Covenant Consent before you begin the work as opposed to applying for retrospective consent.
If you believe that you have such a covenant on your property title then you need to examine the wording of the covenant carefully to ensure that it is enforceable. It is important to ascertain who will be able to enforce the covenant if it is broken, or who you will need to seek permission from to carry out the work.
Not all restrictive covenants are legally enforceable due to poor drafting and if you have such a covenant on your title you should seek legal advice as early as possible to ascertain whether or not you require Covenant Consent.
There are numerous legal cases where homeowners wish to go ahead with work without the relevant Covenant Consent and where requirement for the consent has been upheld. If you proceed without the Convenant Consent it can be costly to rectify.
In certain circumstances it may be very difficult to locate the party from whom Covenant Consent should be obtained. In these circumstances legal indemnity insurance can prove useful as it can offer some protection should the homeowner have to proceed without the relevant Covenant Consent due to the unknown nature of the party who could enforce the relevant covenant.
Indemnity insurance can also be used where work has been carried out over twelve months ago where an owner was not aware that Covenant Consent was required provided that to date the works have not been challenged by a third party.
It is more likely that Covenant Consent will be required in leasehold properties and the terms of the lease should be reviewed carefully to ensure that it is complied with properly to make sure the homeowner is not in breach of the terms of their lease which, in a worst case scenario, could lead to an application being submitted to the Court to have the lease forfeited. Although this is unlikely it is better to comply fully with the terms of the lease rather than having sleepless nights!
Essentially, the best advice is to consult your title deeds and documents before you carry out any alterations to your premises to ascertain whether or not Covenant Consent is required. If you are in any doubt you should refer the matter to your solicitor. If Covenant Consent is required then the obligations set out in the title deeds should be followed closely, and if at all possible Covenant Consent should be obtained prior to the works being carried out and a copy of the Consent should be saved and stored with the title deeds. This will be essential as you will need to provide evidence to any future purchaser.