Before you commit to a property, it’s worth checking if there are any restrictive covenants - legal rules that could limit how you use your home or land. These could affect renovations, extensions, or even running a business from home. If a covenant clashes with your future plans, it could cause headaches later, so it’s best to understand what’s in place before you buy.
What is a restrictive covenant on a property?
A restrictive covenant is a legally binding rule that limits how a property can be used. These restrictions are usually set by property developers, local authorities, or previous landowners to maintain the character of an area or protect neighbouring properties. Covenants remain attached to the property, meaning they still apply even when ownership changes.
Common examples
Building restrictions: Preventing homeowners from making certain extensions or structural changes without permission.
Usage limitations: Banning business use in residential areas or stopping the property from being converted into multiple units.
Aesthetic controls: Requiring owners to maintain the property’s appearance in a specific way, such as keeping hedges at a certain height or only using approved paint colours.
Land use restrictions: Prohibiting subdividing land or adding extra buildings, such as annexes or new developments.
Shared access agreements: Governing who can use shared driveways, private roads, or communal spaces, ensuring fair access and upkeep.
👉 You can learn more in our guide to what is a restrictive covenant.
What impact can restrictive covenants have on homeowners?
Restrictive covenants can have a major impact on what homeowners can and can’t do with their property. Whether you're planning renovations, running a business, or making changes to your land, these legal restrictions could limit your options and, in some cases, lead to legal or financial consequences.
Here’s how restrictive covenants can affect homeowners:
1. Limitations on renovations
You may need formal approval before making structural changes, such as adding an extension, converting a loft, or altering the property’s exterior. Some covenants completely ban certain modifications, such as building on specific parts of the land.
2. Restrictions on running a business from home
Many covenants prohibit commercial activity in residential properties, meaning you may not be allowed to run a business from home. This can affect home-based offices, childcare services, or rental businesses like Airbnb.
3. Increased legal responsibilities
Some covenants require homeowners to maintain certain features, such as fences, driveways, or shared pathways. Failing to uphold these responsibilities could lead to legal disputes or enforcement action.
4. Potential disputes with neighbours or developers
If someone believes you have breached a restrictive covenant, they may challenge or enforce it, leading to legal disagreements. This can create tension with neighbours or complications with property developers who hold rights over the covenant.
5. Financial consequences
Breaching a covenant can lead to legal action, requiring you to pay fines, undo renovations, or restore the property to its original state. Some breaches may even be recorded on your property title, making it harder to sell or remortgage in the future.
💡 Key takeaway: Restrictive covenants can have a big impact on homeownership. Before buying or making changes to a property, it’s important to check for existing covenants and, if needed, seek legal advice from a restrictive covenant solicitor to understand your options.
Can it have an impact on getting a mortgage?
Yes, restrictive covenants can impact mortgage applications. Lenders may be cautious about approving a mortgage if the restrictions could:
Affect the resale value of the property.
Make it difficult for the buyer to use the home as intended.
Lead to legal disputes that could impact ownership.
Require ongoing maintenance obligations that may increase financial risks for the buyer.
Actions to take if you want to purchase a restrictive covenant property
If you are considering buying a property with a restrictive covenant, take the following steps:
Review the property title: Ensure you fully understand the restrictions by checking the property deeds.
Seek legal advice: A property solicitor can assess whether the covenant is enforceable and explain potential risks.
Negotiate with the seller: If the covenant is problematic, you may be able to negotiate a price reduction to compensate for the restrictions.
Check for past enforcement: If a covenant has not been enforced for many years, it may be challengeable.
Consider indemnity insurance: This can protect you financially if a covenant is enforced after purchase.
Apply for a modification or removal: Some covenants can be legally removed through the Lands Tribunal if they are outdated or unreasonable.
Recap: Should you buy a house with a restrictive covenant?
There’s no simple yes or no answer - it depends on the restrictions in place and how they might affect your plans for the property. Restrictive covenants vary greatly, so it’s important to do your research and approach each case with caution and due diligence. Your conveyancer or solicitor should highlight any restrictions and help you understand their impact.
Buying a house with a restrictive covenant can be a manageable risk if you fully understand the implications. Try to consider things like:
Does the restriction impact your intended use of the property?
Has the covenant been enforced in the past?
Can it be removed or modified?
Will it affect future resale value or mortgage eligibility?
FAQ
Are restrictive covenants legally enforceable?
Yes, but only if they serve a valid purpose and have been actively enforced over time. If a covenant has been ignored for years without objection, it may become unenforceable.
Can a restrictive covenant be ignored?
No, ignoring a restrictive covenant can lead to legal action, financial penalties, or an order to undo any breaches. However, some covenants may no longer be enforceable, so seeking legal advice can help clarify your options.
How long do restrictive covenants last?
Restrictive covenants can last indefinitely and remain attached to the property even when ownership changes. In some cases, they may become unenforceable if they are outdated or if the benefiting party no longer exists.
Who enforces restrictive covenants?
The person or entity that benefits from the covenant, such as a property developer, local authority, or neighbouring property owner, can enforce it. They may take legal action if they believe a breach has negatively impacted them.
👉 You can learn more in our guide to can neighbours enforce restrictive covenants.
Final thoughts
Restrictive covenants can limit what you can do with a property, but they don’t always mean you should walk away from a purchase. The key is to understand the restrictions, assess how they might affect your plans, and explore possible solutions. Getting legal advice can help you determine whether the covenant is a minor inconvenience or a deal-breaker, so you can make a confident, informed decision about your purchase.
Disclaimer: This article only provides general information and does not constitute professional advice. For any specific questions, consult a qualified professional.
