What is a covenant?

June 25, 2018

 

Many people in the property industry arrogantly assume that everybody knows the industry jargon. One such word that you will come across is 'covenant'. Below is a brief explanation of what a covenant is. 

 

Covenants are a form of legal obligation that is binding on the owner of a property and passes from owner to owner whenever the property is sold. They form part of the deeds of a property and are recorded at the Land Registry.

 

A covenant is usually established by the builder or original owner of a property and seeks to ensure that certain things happen or do not happen. For example, a covenant might be an obligation to paint the house regularly. A restrictive covenant would prevent you from painting it pink! These types of covenant might exist in, for example, an exclusive development of homes where the developer and indeed other residents wish to maintain a certain standard of the whole street in perpetuity.

 

Some covenants are more severe in their restrictions. For example, you may be prevented from parking a caravan or trade vehicle on your drive or not “trading” from your property, which could be difficult to define in practice. Flats often have a covenant stating that you must not create noise or in other ways be a nuisance to your neighbours, any of whom could file an injunction against you through the courts if you are in breach.

 

Of course, many of the covenants relating to older properties are unlikely to be problematic, unless of course you wish to graze sheep, display charms on a Sunday, or keep a horse inside your house! I once sold a property in Kidlington where the original owners (in the 1950's) had imposed a covenant forbidding dancing and the drinking of alcohol (in line with their faith). This covenant is an example of one that is unenforceable, as it would be deemed unreasonable by the powers that be. The owner at the time, proudly showed me their selection of wine and did a quick jig.
 

Most agents will have asked the owners if they know of any covenants and will have the information available. The owners (and therefore the agent) don't always know so your solicitor will advise if any covenants affecting a property you are buying are especially onerous. As with all these issues, they need to be seen in a realistic context and it is up to you to make the decision as to whether any covenant is acceptable or not, as it will be almost impossible to remove.

 

Covenants are something that I deal with every day at AR, so when you decide to sell your property and especially if you are buying on again, then make sure you choose an Estate Agent that employs qualified, regulated professionals who can alert you to any potential issues that may arise at an early stage. It could save you a lot of time, hassle and money.

 

 

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