Selling a house with a restrictive covenant

Selling a house with a restrictive covenant may seem like a huge challenge, especially if you’re worried about how it might affect your sale. While these legal restrictions can raise questions for buyers and mortgage lenders, they don’t necessarily stop you from selling your property.

In this guide, we explain what restrictive covenants are, how they could impact your sale, and the options available if you’re looking to sell quickly and with confidence.

What is a restrictive covenant?

A restrictive covenant is a legal condition attached to a property that limits how it can be used or what changes can be made to it. These covenants are usually put in place by a previous owner, developer or landowner to protect the appearance, value or character of an area.

Restrictive covenants stay attached to the property rather than the owner, meaning they continue to apply even after the property changes hands. They’re typically recorded in the property’s title deeds and can date back many decades.

Some common examples of restrictive covenants include:

• Not building an extension or additional property without permission
• Not running a business from the property
• Not parking commercial vehicles on the driveway
• Not keeping certain types of animals
• Maintaining specific boundary features, such as hedges or walls
• Not making alterations that affect the property’s appearance

Many restrictive covenants are never enforced, particularly older ones, but they can still become an issue during the conveyancing process if a buyer’s solicitor identifies them.

Can a neighbour enforce a restrictive covenant?

In some cases, yes. A restrictive covenant can usually only be enforced by the person or organisation that has the legal benefit of the covenant, which may be a neighbour. Other people or groups who might enforce a restrictive covenant include:

• The original developer
• A management company
• Another landowner with a legal interest

For example, if a covenant was put in place to preserve the appearance of an estate, a neighbouring homeowner who benefits from that covenant may be able to take legal action if it’s breached.

Enforcement isn’t necessarily straightforward: the person seeking to enforce the covenant must be able to prove they have the legal right to do so, and in some cases, particularly with older covenants, identifying the beneficiary can be difficult.

How much does it cost to remove a restrictive covenant?

The cost of removing a restrictive covenant varies depending on the circumstances.

If the beneficiary of the covenant is known and they agree to remove or modify it, you may need to pay compensation as well as cover legal fees. This can range from a few hundred pounds to several thousand pounds, depending on the impact of the covenant and the property’s value.

If an agreement can’t be reached, you may be able to apply to the Upper Tribunal (Lands Chamber) to have the covenant removed or modified. This process can be expensive, with legal and professional fees often running into several thousand pounds. It can also take many months to reach a decision.

In many cases, homeowners choose not to remove the covenant at all. Instead, they may obtain restrictive covenant indemnity insurance, or just disclose the covenant to potential buyers during the sales process.

What we see in practice at House Buyer Bureau

Restrictive covenants are more common than many homeowners realise. Over the years, we’ve assessed properties affected by a wide range of restrictive covenants, including restrictions on extensions, alterations, business use, parking arrangements and future development. In most cases, the existence of the covenant isn’t what creates difficulties – delays more often come up when there’s been a historic breach or concerns from mortgage lenders.

One common misconception is that a restrictive covenant automatically makes a home difficult to sell. But we see many properties across England and Wales being bought and sold every year with restrictive covenants attached to their title. The most important factor is how the covenant affects the property’s future use, marketability and mortgageability, rather than the fact it exists.

How to sell a property with a restrictive covenant

Having a restrictive covenant doesn’t mean you can’t sell your home – you still have a number of options available to you.

Sell on the open market

Many properties with restrictive covenants are sold through estate agents every year. If the covenant hasn’t been breached and is unlikely to concern buyers or mortgage lenders, it may have little impact on the sale. But, if there’s been a breach, or if the covenant raises concerns during conveyancing, the transaction could become more complicated.

Some buyers may be put off by the perceived risk, while mortgage lenders may ask for additional information or require indemnity insurance before approving a mortgage.

This can lead to:

• Delays during conveyancing
• Additional legal costs
• Buyers renegotiating the agreed price
• Sales falling through

Being open about any restrictive covenants from the outset can help reduce unexpected issues later in the process.

Sell to a cash house buyer

If you’re looking for a quicker, more certain sale, selling to a cash house buyer can often be a practical alternative.

Because cash buyers don’t rely on mortgage finance, there are fewer parties involved, and concerns about restrictive covenants are easier to assess. An experienced cash house buying company will consider the overall property and its marketability rather than automatically ruling it out because of a covenant.

This can make the process:

• Faster, with sales often completing in a matter of days or weeks (we can buy your house in as little as 7 days – or longer if you need)
• More straightforward, with fewer delays
• Less likely to fall through
• Suitable for homeowners who want certainty

Whether the restrictive covenant is historic, has already been breached, or just raises questions for traditional buyers, selling directly to House Buyer Bureau can remove much of the uncertainty associated with the open market.

Sell your house with a restrictive covenant fast with House Buyer Bureau

At House Buyer Bureau, we understand that every property has its own circumstances. Whether your home has a restrictive covenant, planning complications, title issues or other legal considerations, we’ll assess your property on its individual merits.

For example, we recently assessed a property where a conservatory had been constructed many years earlier without consent that was required under a historic restrictive covenant.

The homeowner was concerned the issue would prevent a sale, but, after reviewing the situation, it became clear the alteration had existed for many years without challenge. The transaction was able to proceed with appropriate legal advice and indemnity considerations.

Every case is different, but this illustrates why the existence of a covenant doesn’t automatically mean a property cannot be sold.

We buy properties across England and Wales directly for cash, meaning there’s no property chain, no waiting for mortgage approvals and no estate agent fees to worry about. Our experienced team aims to make the process as simple and transparent as possible, providing a no-obligation cash offer and allowing you to choose a completion date that works for you.

As a professional property buyer we don’t just look at whether the covenant exists, we consider:

• Whether the covenant is still enforceable
• Whether there’s evidence of a historic breach
• The likelihood of future enforcement
• Whether indemnity insurance is available
• How the covenant could affect future resale potential

We don’t make a judgement simply based on the presence of a covenant. We have many years’ experience of buying these sorts of properties, and know that two similar looking covenants can have very different risk profiles depending on their history and location.

If you’re worried that a restrictive covenant could slow down your sale or make it harder to find a buyer, we’re here to help. Contact House Buyer Bureau today for a free, no-obligation cash offer and find out how quickly you could sell your property.

FAQs

Chris

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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