"It’s not unusual for a property to have a restrictive covenant that states the property can’t be used for the running of a business. Generally this will relate to a commercial operation rather than to a small business run from a home office. But it can cause panic if somebody wants to run a property as a rental or Airbnb."
- Ed Jephson - Stacks Property Search
Restrictions and covenants are often part of the legal landscape for property buyers, whether purchasing a period home, new build, leasehold flat or rural conversion. Some are relatively recent, while others have existed for decades or longer.
Covenants are legal agreements that limit how a property can be used. They appear in deeds or other legal documentation and can affect everything from business use to external alterations. The question for buyers is when to accept these terms, and when they should be considered a deal-breaker.
Common types of covenants and restrictions include:
Limitations on building extensions, structural alterations, or external changes such as paint colour or satellite dishes
Prohibitions on running businesses, leasing or subletting the property, or keeping certain animals like chickens or goats
Requirements for landscaping, regular lawn maintenance, or shared driveway upkeep
Regulations on the size and type of fences
Restrictions on vehicle types, including bans on commercial vans, or noise levels that could disturb neighbours
While some covenants are minor or outdated, others can significantly affect how a buyer intends to use the property. Understanding them early can prevent last-minute surprises and ensure a smoother transaction.
“It’s an issue that comes up constantly,” said James Greenwood, head of Stacks Property Search. “Covenants and restrictions don’t have to be deal breakers, but they do need to be properly investigated, and if necessary, insured against, or lifted.”
Clare Coode, also of Stacks Property Search, explained, “Early knowledge is important. ALWAYS ask the vendor or sales agent whether there are any restrictive covenants at an early stage, as soon as you’re interested enough to ask for a second viewing."
"You don’t want to fall in love with a house and then find out that you can’t hang your laundry outside to dry (one covenant I have actually come across!). Both vendor and agent are required by law to disclose any restrictive covenant, but as a buying agent, I will always check the Deeds as soon as a buyer has shown some interest in a property, in case it’s slipped the vendor’s mind. It’s a quick and simple process to look at the Title Register or Title Plan on the Land Registry website.”
The level of concern a covenant presents often depends on its type. Ed Jephson of Stacks Property Search noted, “Restrictive covenants come in all shapes and sizes, and in varying degrees of concern. Those relating to access and future development (often the sale of land will restrict development to a single dwelling) should not be taken lightly. Others that go back into the mists of time are less of a concern as they are often null and void, and a good solicitor will be able to get it lifted.
“It’s not unusual for a property to have a restrictive covenant that states the property can’t be used for the running of a business. Generally this will relate to a commercial operation rather than to a small business run from a home office. But it can cause panic if somebody wants to run a property as a rental or Airbnb. Or for instance to run small yoga classes from the property or an annexe.”
Solicitors may take different views depending on their risk appetite and interpretation. Coode shared, “Solicitors can get panicky. A client was recently buying a property on a development on forty other properties – all had the same covenant that restricted the ‘running of a business’. My client wanted to use the property as a holiday let, and at least fifteen of the other properties were used as holiday lets; but my buyers’ solicitor didn’t agree that this precedent was sufficient. We did eventually get confirmation that the property could be used as a holiday let.”
Location and surrounding land ownership can also influence the weight of restrictions. Charlie Rearden of Stacks Property Search commented, “Properties that are on or adjacent to National Trust land are often subject to restrictions and should always be thoroughly investigated and researched. Shared drives are commonplace, and buyers should look carefully at related responsibilities, restrictions and costs.”
Changes in how covenants are handled by legal professionals have also impacted how transactions unfold. “Years ago, the way solicitors handled covenants was to research as much as possible and take a view based on the practicalities, but then insurance became the accepted way of dealing with them. But now solicitors seem to be more wary of covenants than ever before and they can seriously hamper the buying process,” said Greenwood. “Many properties have at least one restrictive covenant of some sort, and much of the time they are historical, with beneficiaries long gone, in which case they are fairly toothless.
“As with all matters to do with conveyancing, early knowledge is power. It’s issues that arise at the eleventh hour that can cause difficulties. Downloading the Title Deeds early in the process will give everybody time to investigate and take any necessary measures to mitigate. Estate agents should have available information about any covenants on a property they are selling, and communicate their existence up front, but in our experience, it’s safer for the buyer to be proactive, either by checking themselves, or asking their solicitor to do it for them.
“The Land Registry will often reveal the existence of any Covenants on a property, but for the detail, it’s important to check the full title – there’s a £14 fee for the full title register including title plan.
“At the first whisper of a warning sign about restrictions of any sort, we would strongly recommend that buyers take this initiative.”
