Congratulations! You’ve bought a house!
The mortgage is completed, the deeds are in your name, and you’re putting a crew together to begin renovation work so you can start placing tenants and making money as soon as possible.
But there’s one little thing nagging at the back of your mind – your solicitor says it’s unimportant, but you can’t quite shake the feeling that you’ve put your name to a legal document without quite understanding what it is.
Covenants are placed onto the title deeds of a house, usually by the builders, or by a previous owner and restrict what you can, can’t, or must do with a property.
And your solicitor is right – covenants are generally unimportant. Except when they’re not.
Often they’re small conditions, stipulating that the property must be fenced in and have a working gate. Occasionally they’ll specify the maximum height of the trees in your garden. Perhaps they’ll say that a £2 per year rent charge must be paid to a person long dead.
But sometimes, they’ll restrict the types of building work you can carry out, the maximum number of occupants in your property, whether you’re permitted to let it out, or even who you are allowed to sell to.
Scary stuff. But the chances are that the covenant on your house will never affect you.
But problems can and do arise when someone decides to enforce the covenant.
Maybe it’s a neighbour who doesn’t want you letting your property as an HMO to students. They can check your deeds to see if letting is prohibited. If it is, then hard luck.
Perhaps the couple next door are regular nude sunbathers and don’t want you to build an extension because it’ll overlook their naked sweating bodies in the back yard. There’s a covenant for that too.
Your malicious neighbours can take you to court and ask for an injunction, meaning that you’ll have to turf your students out on the streets and knock down your extension. You’ll need to cut down your tall trees, and erect a gated fence.
It sucks to be you right now, but short of suing your original solicitor (usually a bad move), once the injunction is in place, there’s not really much you can do about it.
If only you could have prevented this horrible situation from arising in the first place!
Fortunately, and for reasons we are forbidden to go into, RentWorks has access to a time machine, so you can send this message back to your naive former self:
I know you have a busy day ahead of you today and are due to exchange contracts on a fantastic new property.
You may want to ask your solicitor to go into detail on the restrictive covenants which apply to the house. Yes, they’re there, and there’s a slight possibility that they will be enforced.
I realise, dear self, that quite frankly you don’t have time for this, but you may want to find out who potentially benefits from the covenant, and ask them ever so nicely to remove it.
Failing this, if you believe you can demonstrate that the covenant has become obsolete or that it impedes reasonable use or development, you can instruct your solicitor to apply to the scarily named ‘Lands Chamber of the Upper Tribunal’ – it’s time consuming and potentially expensive, but it can prevent misery later on.
Your Future Self.