When occupying or letting a property pursuant to a lease, understanding the details of legal obligations between different parties contained within that lease is of vital importance. Of particular note are breach of covenants, a term that signifies the failure to adhere to specific promises or agreements outlined in leases.

These covenants are included in legal documents and serve as binding commitments between parties, such as landlords and tenants, or neighbouring property owners. When breached, these agreements can lead to significant legal disputes and financial repercussions. As a tenant or property owner, being aware of what constitutes a breach of covenant is essential to maintain good relations and avoid potential litigation.

In this guide, the property litigation experts at JMW will explain everything you need to know about breaches of covenant, helping you to approach these potentially challenging circumstances with confidence.

What Does Breach of Covenant Mean?

A breach of covenant occurs when one party fails to adhere to the terms agreed upon in a covenant. Covenants are legally binding promises written into property deeds or contracts, typically between a landlord and a tenant or between property owners. Breaching these covenants can lead to legal disputes and financial consequences.

Below are examples of scenarios that may constitute a breach of covenant:

• A tenant neglects to keep the property in good repair, violating the lease agreement.
• A property owner builds an extension without obtaining the necessary consent, breaching a restrictive covenant.
• A tenant consistently falls into rent arrears, breaking a fundamental covenant in the lease.
• A commercial property is used for purpose that is not permitted by the lease, without consent, contrary to the user covenant of the lease.
• Property is rented to more tenants than is allowed by the covenant, leading to potential safety issues.

Understanding these common scenarios can help both landlords and tenants recognise potential breaches and take proactive steps to prevent disputes.

What Is a Positive Covenant?

Positive covenants are agreements that require the property owner or tenant to perform a specific action or engage in a particular activity. These covenants are proactive in nature, obligating the party to undertake certain tasks or maintain certain standards.

Examples of positive covenants include:

• A requirement for the property owner to maintain and repair certain parts of the property, such as the roof or exterior walls.
• An obligation for the property owner to contribute to the maintenance of shared amenities, such as a communal garden or private road.
• A requirement for the property owner to insure the property against specific risks.
• A mandate for the property owner to construct certain structures or improvements within a specified time frame.
• The requirement for the tenant to pay rent on time at agreed timely intervals.

What Is a Restrictive Covenant?

Restrictive covenants are a specific type of agreement embedded in property deeds or contracts that imposes limitations on the use of the land or property. These covenants are legally binding and are primarily designed to preserve the character, aesthetic and value of the property or surrounding area. Restrictive covenants can significantly impact what property owners can and cannot do with their property and understanding them is important for both landlords and tenants to ensure compliance and avoid potential legal disputes.

Restrictive covenants can cover a wide range of limitations. Some of the most common examples include:

• Building extensions: restrictions that prevent property owners from adding extensions or structures without prior approval.
• Use of property: limitations on the types of activities that can be conducted on the premises, such as running a business from a residential property.
• Alterations and modifications: prohibitions against making certain changes to the property’s exterior or interior without consent.
• Architectural styles: requirements to maintain specific architectural styles or materials to ensure aesthetic consistency.
• Landscaping and fencing: restrictions on the types of plants, trees or fencing that can be installed.
• Noise and nuisance: limitations designed to prevent activities that could cause excessive noise or nuisance to neighbours.
• Vehicle parking: restrictions on where vehicles can be parked, often prohibiting parking on lawns or in front of the property.

How Do I Find Out What Covenants Affect My Property?

Examine the title deeds:

• The property title deeds are the official documents that record the ownership and details of the property.
• These deeds typically contain comprehensive information about any restrictive covenants that apply to the property.
• Review the title deeds carefully to identify any specific restrictions or obligations that you, as the property owner or tenant, must adhere to.

Request a title search from the Land Registry:

• The Land Registry maintains detailed records of property titles and any associated covenants.
• You can request a title search through the Land Registry’s online portal or by contacting them directly.
• The title search will provide a detailed report highlighting any registered covenants, including their nature and conditions.
• This search is particularly useful for uncovering historical covenants that may not be immediately apparent in the title deeds.

Seek professional advice from a solicitor:

• Consulting a solicitor who specialises in property law can provide you with expert guidance.
• A solicitor will offer a comprehensive review of your property’s title deeds and any findings from a title search.
• They can interpret the legal language of the covenants, ensuring you fully understand their implications and how they might affect your property use and obligations.
• A solicitor can also advise on any actions required to comply with these covenants or address any potential breaches.
• A solicitor can also advise whether the covenant remains enforceable.

Check planning permissions and local authority records:

• Local authorities may have records of planning permissions and other documents that reference restrictive covenants.
• Checking these records can provide additional context and details about any restrictions on your property.

Engage with neighbourhood or homeowners’ associations:

• If your property is part of a managed community or estate, the neighbourhood or homeowners’ association might have additional covenants or rules that you need to be aware of.
• Engaging with these associations can provide clarity and help ensure you are in full compliance with all local regulations and restrictions.
• By taking these steps, you can comprehensively identify any restrictive covenants on your property, ensuring you remain compliant and avoid any potential legal or financial repercussions.

What Happens If I Ignore a Covenant?

Ignoring a restrictive covenant can lead to several serious consequences, including:

• The party benefiting from the covenant (often a neighbouring property owner or the landlord) taking legal action against you.
• A court may issue an injunction requiring you to comply with the covenant, which can include reversing any prohibited actions.
• You may be liable for damages or compensation if your breach of the covenant has caused loss or harm to others.

It's essential to seek legal advice if you're unsure about any covenants on your property to avoid these potential pitfalls.

In What Instances Can a Forfeiture of Lease Be Applied?

Forfeiture of lease can be applied in situations where a tenant has:

• Breached restrictive and affirmative covenants stipulated in the lease agreement.
• Caused persistent or significant delays in rent payments.
• Used the property for unauthorised purposes.

Landlords must follow specific legal procedures to enforce forfeiture should their tenants breach covenants. Tenants also have the right to challenge or remedy breaches to avoid losing their lease.

Can Court Proceedings Be Avoided for Breaches of Covenant?

In many cases, court proceedings for breaches of covenant can be avoided through alternative dispute resolution methods. One effective approach is entering into a post-dispute arbitration agreement. This agreement allows the involved parties to resolve their conflict through arbitration rather than litigation, offering a more private, cost-effective and expedient solution. 

By agreeing to arbitrate, both parties can work towards a mutually acceptable resolution with the guidance of an impartial arbitrator, thus avoiding the time-consuming and often adversarial nature of court proceedings.