Steps a Solicitor can take to respond to a property covenant breach
You could be forgiven for thinking that if you own the freehold or leasehold of a property, you are entitled to do what you want with it as long as you abide by planning laws. Some properties, however, are subject to covenants which can sometimes hamper your plans for your land – even if you have planning permission.
A covenant is a legally binding restriction or obligation imposed on land by agreement between two freehold landowners or outlined in a lease – often when someone sells their land. Covenants are formed by a deed and can be positive, such as requiring regular lawn mowing or garden maintenance. Alternatively, they can be restrictive, for example, preventing you running a business, building on parts of the land, erecting fences without permission, or keeping certain types of vehicles, on the property.
Restrictive covenants (but not usually positive ones) ‘run with the land’. This means that a covenant agreed years ago, or even centuries ago, can therefore be enforceable against you – and subsequent owners of your property – by the beneficiary (i.e., whoever owns or has responsibility for managing the other property).
If a neighbour claims that you are breaching a covenant, you can check if a covenant burdens your land, and the wording of it, by looking at your title deeds and the title register of your property at the Land Registry, if your property is registered. If you breach a covenant, the beneficiary can take legal action against you. If you get wind that the neighbour intends to take you to court (for example, through conversations you have had, or you have received a solicitor’s ‘cease and desist’ letter) you would be wise to try to reach a resolution through negotiation, thus cutting out the need for costly litigation.
How can a solicitor help if you breach a covenant?
Negotiation
The law surrounding covenants is complex, so you should engage a solicitor specialising in this area to negotiate on your behalf if you are accused of breaching a covenant.
There are various avenues to achieve resolution, including arguing that the covenant is unreasonable or obsolete, for example if it impedes a reasonable use of the land, is too broad, or does not negatively affect the beneficiary.
It may be possible to argue that the covenant is unenforceable because: it is too vague or ambiguous or that due to circumstances beyond your control it is impossible or impracticable for you to comply with the covenant.
Your solicitor may be able to argue that the covenant is waived or abandoned because the beneficiary has, by previous words of actions, indicated that the covenant would not be enforced or, if the beneficiary’s actions have led you to believe the covenant would not be enforced, you may have a claim for estoppel to stop them enforcing it.
If none of the above possible positions apply, your solicitor will try to reach a compromise with the beneficiary which will allow you to continue using the land as you please. You may need to pay the beneficiary some form of financial compensation or agree to other conditions to achieve this.
Mediation
If you want to be involved in the negotiation proceedings yourself, you could ask your solicitor to set up a mediation session for you. This involves you sitting down with the beneficiary and an independent mediator who will try to help you reach a resolution which satisfies both parties.
If negotiation or other forms of alternative dispute resolution fail, the matter may have to go to court. Your solicitor will again present every possible argument to show that the covenant is unenforceable, unreasonable or abandoned. If these arguments fail, they may be able to present an estoppel claim asking the court to prevent the covenant being enforced on the grounds that it would be unconscionable to do so.
If you lose your case, the court has a variety of remedies available to it, including:
- an injunction – court can order you to stop the activity that breaches the covenant, or to undo changes made in breach of it;
- damages – you may be ordered to pay compensation to the beneficiary for any financial losses they have suffered because of the breach; or
- forfeiture – if you are a leaseholder, a breach of covenant could lead to the forfeiture of the lease.
Discharging or modifying restrictive covenants
If you object to a restrictive covenant affecting your property, you can ask your solicitor to apply to the Upper Tribunal (Lands Chamber) to have the restriction discharged or modified under section 84 of the Law of Property Act 1925. This process only applies to restrictive covenants: the tribunal has no power to discharge or modify positive covenants or easements, such as a right of way.
Once your application has been submitted, notice of the application must be given to any potential beneficiaries – such as through a newspaper advert or a flier placed near their property. If no objections to the modification or discharge are received, your solicitor may ask the tribunal to determine the application without a hearing.
If a potential beneficiary does object, they must complete a notice of objection explaining the basis of their entitlement to the benefit of the covenant and the grounds of their objection. After the tribunal has affirmed that the objector is a valid beneficiary, it will hold a hearing to consider the evidence from both sides. You will be informed of its decision in writing and, if it finds in your favour, will be able to develop or use the land as you wish.
How can we help
Defending a breach of covenant claim requires careful consideration of the particular facts and circumstances, and it is imperative that you seek legal advice from an experienced solicitor at the outset.
They will explore all the possible defences, help you gather all the necessary evidence, negotiate on your behalf, arrange an alternative dispute resolution session if appropriate, and prepare your case for a court hearing or a tribunal process if required. For further information, please contact Luke Edwards, Associate in the Dispute Resolution team on 01733 882800 or email [email protected].
Luke Edwards, Associate
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