Problems found after you bought · Restrictive covenant breach
When I bought this property, I didn’t know A restrictive covenant breach could hold up a sale or a remortgage. Now I’m stuck.
Would you have bought the property if you had known?
If you had known the covenant had been breached before you committed, and understood the problems it could cause when you later came to sell or remortgage, would it have changed your decision?
- Would you have paid the same price?
- Would you have wanted it investigated first?
- Would you have walked away?
If knowing about the problem might have changed what you did, the next question is obvious.
Did you receive the right advice when you bought?
You may not know the answer yet. But if nobody explained the problem, or you are now questioning what you were told at the time, that is worth looking at.
You don’t need to know whether anyone was at fault. Tell us what happened and when you bought. We’ll talk it through with you.
Why a restrictive covenant breach can hold up a sale or remortgage
A breach of a restrictive covenant may arise where something has been done that the covenant prohibited, or where the covenant required consent and that consent was not obtained. In practice the same things come up again and again: a conservatory, a shed or outbuilding, a second garage, a satellite dish, solar panels, or a front garden turned into parking.
A breach does not mean something is about to happen. What matters in a transaction is narrower: which covenant and which words are engaged, whether consent was in fact given and simply cannot be produced, whether anyone with the benefit can be identified, and how long the position has stood. A long-standing state of affairs that nobody has ever complained about is a different proposition from recent work, although the covenant itself does not disappear.
What holds up the sale or remortgage is that a buyer’s conveyancer has to advise on it and comply with any applicable lender requirements. Commonly the buyer will ask the seller to put an indemnity policy in place, and to pay for it, before exchange. Requirements differ between lenders.
How the problem usually surfaces
The buyer’s solicitor identifies it
The conservatory, shed, second garage or parking area is compared with the covenants, and the absence of consent becomes a formal enquiry.
Consent may exist but cannot be found
Somebody may well have given consent years ago. Without the paperwork, the position cannot be established either way.
You are asked to pay for the policy
The buyer wants an indemnity policy in place at your expense, and their solicitor may add a contract clause requiring it at completion.
Retrospective consent is requested
The buyer’s solicitor asks you to go and obtain consent now, which means approaching whoever holds the benefit.
It was left to sort out later
When you bought, the breach was noted and the intention was to resolve it after completion. It never was, and it has now resurfaced.
Nobody can identify who could enforce
The deed names a company long gone or an estate long since sold off, so who holds the benefit is unclear.
What you can do about it now
Get the breach pinned down. Ask your conveyancer which covenant and which words are engaged, whether they bind, whether consent was required, and whether anyone with the benefit can be identified.
Do not approach anyone who may hold the benefit, or ask for consent, before taking advice. An approach can produce an objection where there was none, and may affect whether insurance remains available.
Then consider the routes. Evidence that consent was in fact given is the best answer where it exists. Retrospective consent, or a deed of release or variation, needs whoever holds the benefit to agree. An application to the tribunal to modify or discharge the covenant may be possible, but it is a formal and legally complex process that takes time.
Where no approach has been made and no objection raised, restrictive covenant indemnity insurance may be one possible route, subject to the insurer’s terms and the proposed lender’s requirements. A policy does not remove the covenant, provide retrospective consent or determine whether anyone can enforce it.
Expect the cost question. A buyer commonly asks the seller to fund the policy, so establish the premium early. Check any policy you already hold: its limit may no longer match the price.
If you are selling, your conveyancer can ask the buyer’s solicitor what remains unresolved and whether it arises from the buyer’s lender’s requirements. If you are remortgaging, your conveyancer can check your proposed lender’s requirements directly.
What happened when you bought?
If the alteration or use was already present when you bought, the relevant covenant may also have existed then. That does not mean the breach could have been identified from the deed and register alone: those documents do not ordinarily establish the physical state or use of the property. The questions are what the title documents said, what the seller’s replies, survey, valuation or your own observations revealed, whether those sources were compared and what advice you received. If you carried out the work later, the focus is instead on what you were told about the covenant and any need for consent.
Several records from the time may matter, and some may survive. The deed or the register sets out the covenant and any consent requirement. The replies your conveyancer received may show whether consent was asked for and what came back. The contract may contain a clause requiring a policy at completion. There may be an indemnity policy, and whose benefit it was written for and what limit it carried are both worth checking. The lender’s historical written instructions may also be difficult to recover, because they are revised regularly and superseded versions disappear from public view.
Was this property really mortgageable when you bought?
Getting a mortgage when you bought does not necessarily tell you how readily mortgageable the property was across the wider market. There are two historical questions worth asking.
What did your own lender’s written requirements say about breaches of covenant when you bought? And what express requirements did other lenders have recorded at the same time?
Lenders’ written requirements were not necessarily uniform, and their wording changed over time. That means both which lender you used and when you bought can matter.
Lenders set out in writing what they expect a conveyancer to do about particular features of a property. Those instructions are revised regularly, and superseded versions drop out of public view, which can make a question as simple as what was my conveyancer told about covenant breaches in the year I bought? surprisingly difficult to answer from the sources available today. Lexsure has retained historical lender-specific conveyancing requirements since April 2007, so where the records permit they can help reconstruct what your lender’s requirements said at the time and how that compared with the wider lending market.
The wider picture
Historical lender requirements can help us understand how mortgageable the property was when you bought. The conveyancing file and the advice given to you also matter.
Lexsure holds historical Report on Title material: the reports conveyancers sent to homebuyers, going back years. That material shows the kinds of covenant breach issues that were being addressed when firms reported to buyers, and it is a second and separate record from what lenders required.
Whether the breach was identified
Were you told which works or uses appeared to breach a covenant, and which words of the covenant were engaged?
Whether consent was investigated
Was the seller asked to produce consent or to obtain it retrospectively, and were you told what answer came back?
The policy and its terms
If an indemnity policy was obtained, were you told who paid, whose benefit it was written for and what limit it carried?
Whether anything was left for later
Was any part of the position left to be resolved after completion, and were you told that it would fall to you?
Whether the effect on selling was explained
Were you told the breach would remain on the title and could be raised again on a future sale or remortgage?
These are examples of issues addressed in historical conveyancing material, not a checklist of what every purchaser should have been told. What mattered in an individual purchase depended on the circumstances and on what was known at the time.
So even if your mortgage completed, or there is nothing unusual in your lender’s historical requirements, it can still be worth talking to us about what happened.
Could this problem have been seen coming?
The relevant starting point is what was known, or could reasonably have been identified, when you bought.
What did the covenant say? Was consent ever obtained? What was in the conveyancing file? What were mortgage lenders requiring at the time? What kinds of covenant breach issues were conveyancing firms addressing with homebuyers? And what were you actually told?
Taken together, that can help build a picture of whether the problem you are facing today was already something that should have been considered when you bought.
Did you receive the right advice?
What the historical evidence can tell us
Where the relevant lender and period are covered, we may be able to establish what that lender’s conveyancing requirements said when you bought, and how that compared with the wider record at the time.
- That does not by itself establish that anyone was negligent, or that you have a claim. Those questions need the original file and legal advice.
- The absence of express wording does not establish that the lender accepted the issue.
- What your conveyancer had to tell your lender and what they had to tell you are different questions, and the second depends on the retainer and the circumstances.
Time limits apply, and in some cases the date on which you first knew enough about the problem matters as well as the date you bought, which is why we ask about both. Our full methodology, including how we treat gaps in the record, is set out in the archive and its limits. Where a solicitor later needs formal historical evidence, Lexsure can provide source-evidenced historical lender information.
Sources and review
This page is about a breach of covenant that has already been identified. For what restrictive covenants are, whether they bind and how the wording is established, see restrictive covenants. Where the works also lack planning permission or building regulations approval, see missing planning permission and building regulations. Guidance here about the present problem is general information. It is not legal advice about your property.
This page covers freehold restrictive covenants. It states no lender requirement as a general rule, because requirements on breaches and indemnity insurance differ between lenders and change, and the position must be reverified at each review. Whether a covenant binds, who may enforce it and whether it can be modified or discharged are questions of general law that turn on the wording and the facts.
Historical lender information is drawn from Lexsure’s archive of lender-specific conveyancing requirements, maintained since April 2007. Figures on this page state the population they are drawn from.
What the archive holds
Counts cover substantive changes to lenders' specific requirements in the UK Finance Handbook and elsewhere, covering issues such as covenant breach. That requirements changed is a fact about the market, not about your purchase.