Covenant disputes

Whether you are seeking to enforce a restrictive covenant, are hindered by a covenant that may no longer serve any legitimate purpose, or you need to understand how a covenant affects the value or use of land you own or are acquiring, our property disputes solicitors have extensive experience advising on all aspects of disputes concerning covenants.

What is a covenant?

A covenant is a promise given in a deed by which one party (the covenantor) undertakes to do or refrain from doing something in relation to land. Covenants are created most commonly in conveyances and transfers of land, where a seller imposes obligations on the buyer as a condition of the sale, but they can also be found in leases, development agreements, and other property documents.

There are two main types of covenants:

A restrictive covenant is a promise not to do something (for example, not to build on land, not to use it for commercial purposes, or not to erect more than one dwelling); and
A positive covenant is a promise to do something (for example, to maintain a fence or wall, to contribute to the cost of a shared road, or to keep a building in repair).

The distinction between the two matters significantly, particularly when it comes to the question of whether the covenant runs with the land and binds successors in title to the original covenantor.

You will find answers to common questions to covenants in the FAQs at the bottom of this page.

What does a covenant dispute solicitor do?

Covenant disputes require a careful and often forensic approach. Our property dispute solicitors can help to establish whether a covenant is enforceable. The question of whether a covenant binds the current owner of the burdened land, and whether the benefit has passed to the current owner of the land it was intended to protect, is a frequently litigated issue.

The property disputes team has extensive experience advising landowners, developers and those involved in property transactions on covenant disputes, from initial analysis of whether a covenant is enforceable and its likely scope, to negotiating releases and modifications, making and defending applications to the Upper Tribunal, and pursuing or defending injunction and damages claims in the courts. The team’s ethos is simple: solve the problem.

Our aim is always to resolve the dispute without the need for court intervention, using negotiation, mediation, expert determination and other forms of alternative dispute resolution. Covenant disputes can be costly and time-consuming (especially if taken all the way to trial), and in many cases a pragmatic solution can be achieved without litigation. Where court proceedings are unavoidable, however, the property disputes team has the expertise to take a claim through to trial.

Related articles:

Restrictive Covenants: Key considerations for developers

Why choose B P Collins as your covenant dispute solicitors?

With over 60 years of experience, we’re consistently ranked by Chambers UK and The Legal 500 for the strength of our property disputes practice. Our solicitors have helped hundreds of individuals, developers and companies navigate their property rights with confidence and clarity.
As with most disputes, early advice can frequently result in a swift outcome, avoiding unnecessary escalation and protecting your position before it becomes more difficult to assert.

Covenant issues frequently arise in the context of property transactions, where they need to be identified and resolved before exchange of contracts. The property disputes team works closely with the firm’s property team to provide joined-up advice at every stage of a transaction.

Contact our covenant disputes solicitors today

For further information or advice please contact our covenant disputes lawyers. Our teams are based in London, Thame and Gerrards Cross, and can be contacted on 01753 889995 or at enquiries@bpcollins.co.uk.

Covenant dispute FAQs

What is the difference between a restrictive and a positive covenant?

A restrictive covenant obliges the owner of the burdened land to refrain from a specified use or activity. A restrictive covenant is a negative obligation: it restricts what the landowner can do with their land. A positive covenant requires the owner of the burdened land to take positive action, most commonly to spend money or to carry out works. The distinction matters when considering whether the covenant runs with the land and can be enforced against a successor in title to the original covenantor. The burden of a restrictive covenant can run with the land and will bind successors in title. The burden of a positive covenant, by contrast, does not run with the land. A successor in title to the original covenantor cannot generally be compelled to comply with a positive obligation undertaken by their predecessor, even if they took the land with full knowledge of it.

How do I know whether a covenant binds me or my land?

Whether a restrictive covenant binds a current owner of the burdened land depends on several factors that need to be analysed in sequence.

The covenant must have been validly created. It must have been given in a deed and must satisfy the requirements for a valid restrictive covenant (in particular, it must have been taken for the benefit of identifiable land retained by the covenantee at the time it was imposed).
The burden must have passed to the current owner of the burdened land. For registered land, a restrictive covenant will be registered as a notice on the title to the burdened land; a purchaser who acquires registered land subject to a registered notice will take subject to the covenant. Where a covenant is not registered against the title it may not be enforceable against a purchaser.
There must be a current owner of the benefiting land who has the benefit of the covenant and is entitled to enforce it. If the benefit has not passed to the current owner of the land intended to be protected, they will have no standing to enforce the covenant.

What can I do if someone is breaching a covenant that benefits my land?

Where a restrictive covenant that benefits your land is being breached you may be able to take enforcement action. The primary remedy for breach of a restrictive covenant is an injunction – an order requiring the covenantor to stop the breach or, where works have already been carried out, to pull them down or reinstate the position. Acting promptly is important: a delay in seeking an injunction can be used by the defendant to argue that the claimant has acquiesced in the breach or stood by while expense was incurred; which may cause the court to award damages in lieu of an injunction rather than granting the injunction itself. Damages may also be available, either in addition to or instead of an injunction. Where the court decides that it is appropriate to award damages in lieu of an injunction the measure of damages will reflect the loss suffered. A declaration from the court confirming the existence and scope of a covenant can also be a valuable remedy where there is a dispute about the covenant’s meaning or extent, even where no immediate breach has occurred.

What can I do if a covenant is being enforced against me?

A landowner who receives a letter alleging breach of a restrictive covenant should not assume that the covenant is necessarily enforceable or that the person asserting the benefit has standing to do so. Before taking any steps (including ceasing works or entering into negotiations) it is important to take legal advice. There are several grounds on which a covenant may not be enforceable against a current owner of the burdened land. Where the covenant is enforceable, there are various options, with each option having its advantages and disadvantages depending on the circumstances, and in many cases a combination of approaches will be appropriate.

Can a positive covenant be enforced against me as a successor in title?

Generally, no. However, there are exceptions. The burden of a positive covenant does not run with the land and cannot be enforced against a successor in title to the original covenantor. This is one of the most well-established principles and means that, if the original owner of a property gave a positive covenant (for example, to maintain a boundary wall or contribute to a shared road) that obligation does not automatically bind subsequent owners of the property. However, there are several mechanisms by which the practical effect of a positive covenant can be preserved against successors in title. That means, in practice, a successor may find themselves expected to comply by way of indemnity covenants, the benefit and burden rule, estate rent-charges, and leasehold arrangements.

How can a restrictive covenant be discharged or modified?

There are two main routes by which a restrictive covenant affecting freehold land can be discharged or modified:

A consensual release negotiated with the person entitled to the benefit;
An application to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925.

What is involved in the consensual release of a restrictive covenant?

A consensual release is usually the quickest and most commercially certain route where the person with the benefit can be identified and is willing to negotiate. In exchange for releasing or modifying the covenant, the benefiting owner will typically require a financial payment, the amount of which will depend on the extent to which the covenant benefits their land and the degree to which its release enables a more valuable use or development of the burdened land.

What happens when a consensual release of a restrictive covenant cannot be agreed?

If the benefiting owner is unknown, cannot be identified, is unwilling to negotiate, or is holding out for an unreasonable sum, then an application to the Upper Tribunal under section 84 may be appropriate. The Tribunal has jurisdiction to discharge or modify a restrictive covenant affecting freehold land on several grounds.

What is restrictive covenant indemnity insurance?

Restrictive covenant indemnity insurance is a form of title insurance that protects the insured (typically a landowner, developer or lender) against the financial consequences of a covenant being enforced. It does not remove or discharge the covenant itself, but provides a financial safety net if enforcement is threatened or pursued.

When is restrictive covenant indemnity insurance appropriate?

Insurance can most commonly be used in the following circumstances:

Where the covenant is old and the identity of the current benefiting owner is unknown or cannot be established (making a consensual release impractical);
Where the covenant is potentially enforceable but there is a reasonable argument that it is not, and the risk of enforcement is assessed as low enough to be insurable;
Where a transaction needs to proceed quickly and there is insufficient time to pursue a consensual release or Upper Tribunal application;
Where a developer needs to satisfy a lender that the risk of covenant enforcement is covered before drawing down development finance.

Insurance is not always the right answer. Where a covenant is clearly enforceable, the potential benefiting owner is known and actively involved, and the proposed use or development is substantially inconsistent with the covenant, insurance may be unavailable or prohibitively expensive. In those cases, a consensual release or an Upper Tribunal application will need to be pursued.

What does restrictive cover insurance cover?

It typically covers the costs of defending an enforcement claim, any damages or compensation awarded, and the diminution in the value of the land if the covenant is upheld and the proposed use or development cannot proceed. Cover is usually available at a one-off premium, and the policy will run with the land, protecting future owners and lenders. There are, however, important limitations. Insurers will not provide cover where the benefiting owner has already indicated an intention to enforce the covenant, where the applicant has already approached the benefiting owner and been refused a release, or where a court action has already been threatened or commenced. Approaching the benefiting owner before obtaining insurance cover can therefore inadvertently make insurance unavailable.

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