Lexsure e-ROT

Covenant Breach · Report on Title scenario

What happens if someone enforces a covenant against me?

It depends what they want and what a court would give them. A person with the benefit of a covenant can sue; what they get is either money or an order to stop or undo what has been done. In practice most disputes settle, because the people entitled to enforce usually want something specific — a payment, a modification, a change to what is planned — rather than a judgment.

Which describes you?

I’ve already bought the property Someone is threatening to enforce a covenant against me. Check what this could mean →WhenIBought.com I’m a conveyancer I need Report on Title wording for this situation. View professional options →

Three questions, in order

<b>Who can enforce it?</b> Not everyone who would like to. The benefit has to have passed to the person complaining, and on old covenants it frequently has not. This is the first thing to establish and it ends a good proportion of threatened disputes.

<b>What do they want?</b> A neighbour objecting to an extension that blocks their light wants the extension changed. A company that bought the benefit of a covenant wants to be paid for releasing it. These are different disputes with different answers.

<b>What would a court give them?</b> Damages are the common outcome. An injunction — an order to stop or to undo — is available and is discretionary, and the more established and the more expensive to undo the breach is, the less likely it becomes.

Already bought, and someone is enforcing a covenant?

If a covenant is being asserted against you, what was reported to you about the title during the purchase is where the question starts.

Find out what should have been explained → WhenIBought.com

The routes that do not involve a court

<b>A release or a consent.</b> The person with the benefit agrees, for a price, to release the covenant or to consent to what you are doing. Recorded by deed, it ends the problem permanently.

<b>An indemnity policy.</b> Available only while the beneficiary has not been approached — which means it is incompatible with asking for a release. The choice between them has to be made before anyone picks up a telephone.

<b>An application to modify or discharge.</b> There is a statutory route to applying for a covenant to be modified or discharged where it has become obsolete or impedes reasonable use of the land. It is a tribunal application, it takes time and money, and it is the answer where a covenant genuinely blocks something worth doing.

What this means when you are buying

A breach on the title is a risk to be priced rather than a reason to withdraw. The things that determine the price are whether anyone can enforce, how long the breach has existed, whether it has ever been challenged, and whether cover is available.

Get the answer before exchange. Afterwards you own both the property and the problem, and the options narrow immediately.

And do not approach the beneficiary to ask whether they mind until you have decided which route you are taking. That single act closes off the cheapest one for you and for every owner after you.

Dealing with this on a current conveyancing matter?

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