Pondering over the decision to purchase a property with restrictive covenants? Hear what the experts have to say.
Restrictive covenants are a common feature in property deeds, and they can significantly impact how a property is used or its relationship with neighbors. These legal restrictions, which bind successive property owners, are designed to regulate the appearance or use of a property.
Typically, restrictive covenants can prevent the owner from carrying out certain activities, such as building to a specific height, operating certain types of businesses, or keeping specific pets. They may also limit the number of stories, architectural styles, or minimum building sizes to maintain a consistent neighborhood appearance.
In some cases, restrictive covenants might prohibit activities like keeping livestock, making major structural changes to a property, installing large structures, or adding smaller things like security cameras or a satellite dish.
Removing a restrictive covenant can be challenging, especially if there is no significant money at stake or the person who put the covenant in place is still alive or traceable. The process of removing a restrictive covenant through the court can be lengthy and expensive. However, in certain circumstances, a court can modify or discharge a restrictive covenant with legal help.
For example, in the case of Cheung & Anor v Mackenzie in 2022, the courts ruled a "deed of modification" was permissible for a property with a 1947 restriction preventing building on the site "except one detached dwelling house."
When selling a house with a restrictive covenant, it is obligatory to declare it at the earliest reasonable opportunity. Buyers should take advice from their solicitor about how restrictive or enforceable the clauses are. A document called a "report on title" should be provided by the solicitor, detailing any restrictive covenants and their risks.
Some mortgage lenders may be wary of lending on a property with very strict covenants. In such cases, indemnity insurance can be taken out to secure a mortgage or minimize risks. Before buying a property, a title check can be carried out by looking at the registered title at the Land Registry.
It's worth noting that not all properties have restrictive covenants. Most properties do not have any restrictions. However, when buying a property, it's essential to be aware of these potential legal restrictions to avoid any unexpected issues down the line.
For instance, a developer might impose covenants requiring new homes to conform to a specific architectural theme or size within a subdivision, as seen in subdivisions like Vistas and Lakeridge. Other examples include restrictions to protect neighboring properties' enjoyment, such as preserving views by limiting building height.
In conclusion, while restrictive covenants might seem like a nuisance, they are essential legal restrictions that protect the neighborhood's aesthetics and the enjoyment of neighboring properties. As a home buyer, it's crucial to understand these covenants and their potential impact on the property's usage and value before making a purchase. Seeking professional advice from a solicitor is always recommended.
- When planning an extension for a home, it's crucial to investigate any potential restrictive covenants that could impact the roof design or the number of stories allowed.
- A guide to real-estate investing should advise potential buyers to research any restrictive covenants before purchasing a property to avoid unexpected costs and challenges during building or design.
- Remodeling a loft could involve major structural changes, which may be impeded by restrictive covenants in the property deed, so it's essential to consult a solicitor during the planning phase.
- If a homeowner wishes to install solar panels on the roof, they should first verify there are no restrictive covenants in the deed that might hinder solar installation, affecting the home's finance and energy efficiency.
- Investing in a property located within the Vistas subdivision implies adhering to specific architectural themes and size restrictions, as dictated by the developers' imposed covenants.
- To minimize risks and secure a mortgage, home buyers can invest in indemnity insurance for properties with very strict covenants, as some mortgage lenders may be wary of such properties.
- Although many properties do not have restrictive covenants,there are developments, like Lakeridge, that have restrictions to protect neighboring properties' enjoyment, such as limiting building height to preserve views.
