Covenant (Restrictive)

A restrictive covenant is a legally binding obligation registered against a property's title that restricts what the current owner (and all future owners) can do with the land or property. Covenants are typically imposed when land is first developed and can persist indefinitely.

Common restrictive covenants include: prohibitions on commercial use, restrictions on subdividing the property, requirements for the property to remain as a single dwelling, limits on building extensions or outbuildings, and restrictions on keeping certain animals or vehicles.

For property investors, the most important covenants to check are those that restrict letting (rare but not unknown), prohibit subdivision (relevant if considering an HMO conversion), or restrict commercial use (may affect your ability to run a home-based business from the property, though rarely affects standard BTL letting).

Your solicitor will review registered covenants during the title investigation and flag any that are relevant to your intended use. Some older covenants are practically unenforceable (the original beneficiaries may no longer exist), but formal discharge or indemnity insurance is the correct route to managing the risk rather than simply ignoring them.