Understanding Covenants: Importance and Implications
Thursday, August 17, 2023
Thursday, August 17, 2023
This article aims to shed light on the concept of covenants, their significance, and the implications they hold.
What is a Covenant?
A covenant refers to a legal obligation that is attached to a property or land. These obligations are typically documented in the Title Deeds, Leases, or other legal documents. Typically they set out what you can and cannot do with your property and cover a wide range of issues such as restrictions on land use, maintenance responsibilities or limitation on alterations or developments on a property.
What types of Covenants are there?
There are two main types of covenants: positive covenants and restrictive covenants.
- Positive Covenants: Positive covenants require the property owner or occupier to take certain actions or fulfil specific responsibilities. An example of a positive covenant would be to repair or contribute to the cost of a repair. In order to enforce a positive covenant, new owners of the property must enter into a direct agreement with the person benefitting from the covenant. This is often known as a Deed of Covenant or chain of indemnity.
- Restrictive Covenants: Restrictive covenants, on the other hand, impose limitations or restrictions on the use, alterations, or developments of the property. These covenants can be enforced without a Deed of Covenant or chain of indemnity. An example of such would be ‘not to build a structure on a property without obtaining the relevant consent’.
Importance of Covenant Consent
Covenant consent refers to the requirement to obtain permission or approval from a relevant party before carrying out certain actions or changes.
Covenant consent can apply to various scenarios, such as making alterations or additions to a property, changing the property’s use, or conducting certain activities on the premises. The consent process typically involves submitting an application or request to the party identified in the covenant, who will evaluate the proposed changes or actions based on the terms and conditions outlined in the covenant.
The purpose of covenant consent is to ensure that the intended restrictions or obligations specified in the covenant are upheld. It allows interested parties, such as neighbours or property management companies, to have a say in proposed changes that could impact the overall character, value, or use of the property or the surrounding area.
It is important for property owners or occupiers to carefully review the covenants associated with their property and seek appropriate consent when required to avoid potential legal issues or breaches of the covenant.
How long do Covenants last for?
Covenants exist in perpetuity and do not expire. Some covenants can date back hundreds of years ago and they still hold their legal status.
However, there are some cases where covenants cannot be enforced. Examples of such would be the original landowner or builder cannot be traced, the wording is not transparent or relate to historical practices which are no longer enforceable.
Why are Covenants Important?
- Maintenance and Upkeep: Covenants ensure that property owners maintain their properties to a certain standard, contributing to the overall appearance and value of the area. This helps prevent neglect and deterioration.
- Protecting Property Values: Covenants help maintain property values by safeguarding the quality, character, and ambiance of a neighbourhood or development. They ensure that changes or activities within the property do not negatively impact the surrounding properties.
- Preserving Architectural Integrity: Covenants often include architectural guidelines or restrictions on alterations, preserving the aesthetic and historical value of buildings or areas. This ensures that the original design and character are maintained
- Shared Facilities and Amenities: Covenants may establish rules and responsibilities for shared facilities like parks, roads, or common areas. This ensures fair access and proper maintenance.
Understanding and adhering to covenants is vital for property owners and occupiers to avoid legal issues. It is important to review and understand any covenants associated with a property before purchasing or leasing it.
If you are looking to buy, sell or re-mortgage a property, please contact us to discuss your needs and obtain a quotation. We act for first time buyers, home movers, investors, and downsizers. Please get in touch today on 0191 255 0255 or email email@example.com.