A restrictive covenant stops my plans and my conveyancer never warned me

You bought a house intending to extend it, convert the garage, build in the garden or run a business from home. Then a planning objection, a solicitor's letter from a neighbour or a buyer's conveyancer points to a clause in a deed from decades ago: no building without the consent of the original developer, a single private dwelling only, no trade or business. Nobody explained it to you when you bought.

This guide goes deeper on restrictive covenants. For conveyancing negligence generally, start with what conveyancers commonly get wrong.

What a restrictive covenant is

A restrictive covenant is a promise, usually made in an earlier sale of the land, not to do something on it. If it was properly created and registered, it binds later owners, including you, and can be enforced by whoever now owns the land it was made to protect. On a registered title it appears in the charges register, often by reference to an older deed.

Many covenants are old and nobody is obviously in a position to enforce them. Others benefit an active estate company, a developer or immediate neighbours who care about them, which matters for both insurance and removal.

What your conveyancer had to do

A conveyancer must act with the skill and care of a reasonably competent conveyancer. For covenants that means identifying them on the title, obtaining copies of the deeds that contain them where they are referred to, and explaining what they mean in practice: what you cannot do, and what might happen if you do it anyway.

The duty is sharpest when you told them your plans. If you said you wanted to extend, build a second dwelling or work from home, and the title contained a covenant against exactly that, a competent conveyancer would be expected to flag it clearly and explain the options before you were committed. A report on title that lists the covenant without connecting it to what you said you intended, or silence on a point you specifically raised, is where most claims begin. Your emails, the instruction form and any notes of calls are the key evidence.

Indemnity insurance and its limits

Restrictive covenant indemnity insurance is common in conveyancing. A policy typically covers the cost of defending a claim to enforce the covenant, the reduction in market value if it is enforced, and the cost of settling a claim. It has real limits:

• It covers the use described to the insurer, usually the existing use at the time of purchase. A policy that protects the house as it stands may not cover the extension you planned.
• It does not remove the covenant. The breach is still a breach; the policy is about money, not permission.
• Approaching the beneficiary can invalidate it. Policies commonly make it a condition that nobody contacts anyone who might have the benefit of the covenant. Approaching them can invalidate an existing policy and prevent new cover being obtained.
• It may not be available at all where the beneficiary is known and active, or where the breach has already been noticed.

Whether a conveyancer should have recommended a policy, explained its scope, or warned that it would not cover your plans, depends on what they knew about your intentions.

Removing or modifying the covenant

There are two main routes.

Agreement. The person with the benefit can release or vary the covenant by deed. They are not obliged to, and will often ask for a payment.

The Upper Tribunal (Lands Chamber). Under section 84(1) of the Law of Property Act 1925 the Tribunal can discharge or modify a restrictive covenant if one of these grounds is made out:

• (a) the covenant ought to be deemed obsolete because of changes in the property, the neighbourhood or other circumstances;
• (aa) it impedes some reasonable use of the land and, under subsections (1A) and (1B), it gives those entitled to it no practical benefit of substantial value or is contrary to the public interest, and money would be adequate compensation;
• (b) those entitled to the benefit have agreed, expressly or by implication;
• (c) the change will not injure those entitled to the benefit.

The Tribunal may order the applicant to pay compensation for any loss or disadvantage the beneficiaries suffer, or for any reduction in the price originally received because of the covenant. The registrar directs that notice of the application be given to those who may have the benefit, so an application is itself an approach; how that interacts with an existing indemnity policy depends on its terms. At the time of writing, the Tribunal's fee for lodging an application is £1,025, with a further £1,281 if a substantive hearing is needed, before any legal or expert costs.

Building first and applying afterwards carries risk. In Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45, the Supreme Court upheld the refusal of a public-interest application by a developer that had deliberately built in breach of a covenant.

Separately, under section 84(2) the court can declare whether land is affected by a restriction, and whether it is enforceable and by whom.

Measuring the loss: cost of cure or diminution in value

A negligence claim needs a loss caused by the breach. Two measures compete.

Cost of cure. Where the covenant can reasonably be released or modified, the loss can be the cost of doing so: the payment for a release, Tribunal fees, any compensation the Tribunal orders, legal and expert costs, and losses caused by delay. Taking reasonable steps to reduce the loss is part of the law of mitigation, and the reasonable cost of those steps is generally recoverable.

Diminution in value. Where the covenant cannot realistically be removed, the usual measure is the difference between what you paid and what the property was worth with the covenant, at the date of purchase. That can produce an unwelcome answer. In Ford v White & Co [1964] the buyer's solicitor wrongly told him there was no building restriction, but the price he paid already reflected the restriction, so he had not overpaid and suffered no loss on that measure.

Which measure applies depends on what you would have done if properly advised, the subject of the causation section in our searches guide, and on what is reasonable now. Wasted costs, such as architect's fees for plans you cannot build, may be recoverable on top.

Time limits and the protocol

Six years from the breach, usually exchange or completion, or three years from when you knew or could reasonably have known the material facts, with a 15-year longstop (Limitation Act 1980, ss.2, 5, 14A and 14B). Covenant problems often surface years later, at planning or sale. See professional negligence time limits and the pre-action protocol.

What a solicitor will want from you

• The report on title and the official copies of the register and title plan.
• The deed containing the covenant, if the conveyancer obtained it.
• Evidence of what you told the conveyancer you planned to do: emails, the instruction form, notes of calls.
• Any indemnity policy, with its schedule and conditions.
• The document that brought the covenant to light, and any contact you or anyone else has had with the person who may have the benefit.
• Planning documents, architect's drawings and costs already incurred.
• Purchase price, exchange and completion dates, and the date you first learned of the problem.

Run the free case check

This guide is general information about the law of England and Wales. It is not legal advice. The terms of any indemnity policy are specific to that policy and need to be read in full.