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Renters Reform Bill: what does it mean for landlords?

Wed, 14 Sep 2022 08:05:16 GMT

Renters Reform Bill: what does it mean for landlords?

The UK Government has announced radical plans to overhaul the private renters’ market, with a new bill designed to shift the balance between landlords and the country’s 4.4 million private rented tenants.

The Renters Reform Bill introduces a number of new rights for tenants which private landlords need to be aware of, covering a wide range of issues from rent reviews to security of tenure; from ombudsman complaints to the right to keep pets. Ronnie Z. Blewitt a Solicitor in the property team with Principles Law outlines the bill’s key measures and analyses their implications for landlords.

Decent Homes Standard

By the Government’s own admission, around 1.6 million people currently reside in hazardous, low-quality homes which pose an imminent risk to tenants’ health and safety. To combat this, the new law will extend the ‘Decent Homes Standard’ to the private sector; the regulatory standard only currently applies in the social rented sector.

This will impose a duty on landlords to make sure the properties they rent out are free from serious health and safety risks – such as fire or carbon monoxide poisoning. Homes must be equipped with adequate kitchen and bathroom facilities and noise insulation, have adequate heating and be warm and dry, and have ‘clean, appropriate and usable’ facilities.

Section 21 evictions and tenancy structures

‘No fault’ section 21 evictions, which presently allows landlords to serve an eviction notice on a tenant on a rolling periodic tenancy or at the end of a fixed-term tenancy for no reason, will be abolished under the new law.

More than 20 per cent of private renters who left their homes in 2019 and 2020 did not end their tenancy of their own accord, including 8 per cent who were evicted by their landlord according to Government figures.

To facilitate the abolition of Section 21 evictions, the Government aims to ban assured tenancies and assured shorthold tenancies for all tenants and replace them with a single system of periodic tenancies.

To ensure landlords can recoup the costs of finding a new tenant and are not regularly stuck with empty properties, a tenant who wants to move out will need to give two months’ notice. Landlords will only be allowed to evict a tenant in ‘reasonable circumstances’, which have yet to be defined.

Properties let to students will be covered by this change in the law, but purpose-built student accommodation will be exempt.

Eviction and gaining possession

New mandatory grounds for possession will be introduced for landlords who want to sell the rented property or move into it themselves, although these grounds will not be usable for the first six months of the tenancy.

New mandatory grounds for repeated serious arrears will also be brought in, although new measures are also planned to ensure that tenants who are behind with their rent have a fair chance of paying off their arrears without losing their home.

Rent increases and rent in advance

Rent review clauses will be abolished and landlords will only be allowed to put up their rents once a year. Two months’ notice of any rent increase must be given.

Where a tenant has paid rent in advance, the landlord will have to repay any outstanding amount when the tenancy ends. The level of rent which landlords can require in advance will also be limited.

Mandatory ombudsman

A single Government-appointed ombudsman with jurisdiction over all private landlords in England will be introduced to allow disputes to be settled in a faster, easier and cheaper fashion, without the matter having to go to court.

The ombudsman will have a range of powers including obliging landlords to apologise, provide information, take action to fix outstanding problems with the property, and/or pay compensation to tenants of up to £25,000.

Ombudsman membership will be compulsory for landlords.

Blanket bans

Blanket bans currently imposed by some landlords, such as on families with children or people on benefits, will be outlawed.

Right to keep pets

All tenants will have the legal entitlement to request that a pet shares thei r home. The landlord is obliged to consider such requests and is not allowed to unreasonably withhold consent. They can, however, require their tenant to have pet insurance to cover any possible damage to the property caused by the pet. A landlord’s refusal can be challenged, but there is not yet any details on how this will work.

New property portal

A new online property portal will be introduced, providing a one-stop-shop and access point with information for landlords, tenants, and local councils.

The portal will outline the responsibilities of landlords, allow tenants to review the compliance of their landlords, and provide local councils with better data to allow them to more easily tackle landlords in breach of their obligations or the law.

Some of the information collated for the Database of Rogue Landlords will form part of the portal, allowing landlords who break the law to be publicly named and shamed.

How we can help

The Renters Reform Bill heralds the biggest shake up of the private rented sector in 30 years. Landlords will need to be ready for when the bill becomes law. Legal advice from a specialist property solicitor is highly recommended to ensure that you are in compliance with all your new obligations.

For further information, please contact Ronnie Z. Blewitt or Andrew Grant in the property team on 0203 905 5507 or 01227 907385 or email ronnie@principleslaw.co.uk , andrew@principleslaw.co.uk has appointment only offices in Mayfair, London and Canterbury, Kent.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Letting your tenant go: consenting to assignment and underletting

Wed, 14 Sep 2022 08:05:15 GMT

Letting your tenant go: consenting to assignment and underletting.

If you are a landlord of commercial property, you will have chosen your tenants carefully. A landlord wants to be sure that a tenant will pay the rent and service charge, and that the tenant will comply with the obligations in the lease so that the property is kept in good repair. At the same time, a business tenant will want the right to move out and either pass on the lease or sublet to another business if their circumstances change. There are legal penalties for landlords who are found to be unreasonable in objecting to a tenant’s proposals, so good legal advice is essential for landlords who want to avoid a dispute while still controlling who becomes their tenant.

‘Letting commercial property isn’t just about collecting the rent,’ according to Ronnie Z Blewitt a Solicitor at Principles Law. ‘The income is vital, but landlords are also looking at the credentials of tenants while trying to maintain the desirability of their properties.’ That makes it more important to be able to exercise some control over who takes on a lease if the original tenant moves out.

The landlord’s duty to be reasonable

The law on when a landlord can refuse consent to an assignment or underletting has evolved over almost a century. The starting point is the Landlord and Tenant Act 1927. Most leases will state that the tenant may not assign without the landlord’s consent. The 1927 Act sets out that where landlord’s consent is required, the landlord may not unreasonably withhold it even if that is not set out expressly in the lease. Sixty years later, the Landlord and Tenant Act 1988 turned this into a positive obligation, creating a statutory duty for a landlord to give consent within a reasonable time, unless it is reasonable to refuse it, and not to impose unreasonable conditions. The landlord must also set out in writing any conditions for giving consent or, if consent is refused, the reasons for the refusal.

The concept of reasonableness is intended to allow flexibility to reflect specific circumstances; what is reasonable in one case might not be in another. The problem for BCL 882 - COMPROP - Letting your tenant go - consenting to assignment and underletting vFPS landlords is to work out how long they can reasonably take over their decision and when they will be reasonable in rejecting a proposed assignee or undertenant. Fortunately, there is plenty of case law that helps and your lawyer will be able to advise you.

Reasonable grounds for refusal

The first place to look is the lease itself. Since 1996, landlords have been allowed to include in a lease specific circumstances in which they will be entitled to refuse consent to an assignment and specific conditions they will be entitled to impose. A circumstance for refusal might be where a proposed assignee is a foreign company; an agreed condition might be that the assignee provides a satisfactory guarantor. Any of these circumstances or conditions will automatically be reasonable. This applies only to assignments and not to an underletting, but where there is an underletting the landlord can still enforce the lease obligations against the tenant.

The landlord may also refuse consent or impose conditions for other reasons, if this is reasonable. The court has established the principle that to be ‘reasonable’, a landlord’s grounds for withholding consent must be linked to the landlord and tenant relationship. That means it is reasonable to withhold consent if the tenant cannot produce accounts and references that show that the proposed assignee is financially sound and able to pay the rent and comply with the rest of the lease. A landlord may not refuse consent to secure a personal advantage, so it would be unreasonable to refuse consent because the landlord wanted to use the property themselves, or if the landlord wanted to persuade the proposed assignee to take a lease of a nearby unit the landlord also owned.

Another helpful bit of case law made it clear that if a landlord has several units or properties close to each other and has set out a formal ‘tenant mix’ policy, it is reasonable to refuse consent to a proposed assignee or undertenant whose business would not fit with that policy.

How long is too long?

The requirement to give a decision within a reasonable time is another potential trap for landlords. The best practical advice is to move quickly once a tenant makes a formal request for consent. Beyond that, there are some useful pointers in the case law:

As a rule of thumb, the landlord should aim to give a written decision, with reasons, within 21-28 days, although there may be situations where 21 days is too long, or where it would be reasonable to take longer. BCL 882 - COMPROP - Letting your tenant go - consenting to assignment and underletting vFPS.
If the tenant explains that there are particular reasons for needing a fast decision, the landlord should take this into account, as it could mean that the reasonable period is shorter than it might otherwise have been.
The clock only starts running when the tenant has provided all the information the landlord needs to make a reasoned decision. If the initial request is accompanied by only sketchy financial information, the landlord should ask for whatever they need and they are entitled to wait for it before giving a decision.

How we can help

If a tenant’s business is struggling in your property, letting them go and accepting a new tenant could be the best outcome for everyone. A landlord who gets the consent process wrong could be faced with a damages claim for breach of statutory duty and possibly a court order allowing a tenant to assign or underlet without consent. Your solicitor can explain what your lease allows, as well as advising on the best tactics for the particular circumstances, giving you the best chance of a low-cost and amicable transition to a new tenant.

For further information, please contact Ronnie Z. Blewitt in the commercial property team on 01227 907385 or email ronnie@principleslaw.co.uk . Principles Law has appointment only offices in Canterbury, Kent and Mayfair, London.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Commercial property, green space, and The Queen’s Green Canopy

Wed, 14 Sep 2022 08:05:14 GMT

Commercial property, green space, and The Queen’s Green Canopy.

From individual landowners to corporate developers, everyone is being encouraged to play their part in enhancing our environment by planting trees for The Queen’s Green Canopy, an initiative to mark Her Majesty’s Platinum Jubilee in 2022.

Growing awareness of the role of our built environment and green space in tackling carbon emissions is also shaping attitudes to the way commercial property is developed and managed. Investors and developers who understand the need for green space around their buildings are finding they have a commercial advantage.

‘The green credentials of commercial property go beyond the energy efficiency of buildings,’ according to Ronnie Z. Blewitt solicitor and principal of Principles Law. ‘Trees and green space are also crucial and are set to have higher priority in planning decisions, as well as in the ways businesses and communities feel about the places where they live, work and shop.’

Environment Act 2021

Government policy on the environment has been developing over recent years. New targets under the Environment Act 2021 build on the 25-year plan to improve the natural environment published in 2018. The two areas most likely to affect commercial property are the need to improve biodiversity and a commitment to plant more trees.

Biodiversity net gain

Environment Act 2021 introduces a new requirement for biodiversity net gain on many new developments. The details are still being worked out, but the principle is clear. A completed development will be expected to achieve a net gain in biodiversity, compared with the site before the development took place. This will be part of planning policy from 2023, so local authorities will be looking at the expected gain in biodiversity when making decisions on planning applications.

The impact of this requirement will be different for greenfield sites than for previously built on (brownfield) sites. Developers should start looking at their portfolios now and consider getting expert advice on how best to address the issue of biodiversity net gain on specific sites.

Tree planting

Tree planting is a key part of the Government’s strategy. The current proposed target is to increase tree canopy and woodland cover from 14.5 per cent to 17.5 per cent of the area of England by 2050 and it has been reported that this will mean planting trees on land equivalent to the size of Kent. There are some high-profile campaigns already underway, including The Queen’s Green Canopy, which is being promoted by The Woodland Trust to mark the Queen’s platinum jubilee. This is supporting individuals and communities to plant trees on a small scale, as well as landowners who can create larger areas of new woodland. The National Trust has also announced a project to create ‘green corridors’ in urban areas.

These tree planting targets include small areas of tree cover outside woodlands, particularly in urban areas, and this highlights the contribution commercial property can make. A well thought out development, or perhaps just a reworking of existing space, will demonstrate care for the environment and biodiversity. The benefits will go beyond simply meeting planning requirements and could enhance your reputation as a developer or investor.

Conservation covenants

One of the ways the Environment Act 2021 aims to secure long-term benefits is through conservation covenants which will, for the first time, allow commitments on conservation to be enforced in the long term. A conservation covenant is a commitment by a landowner to a public body or conservation organisation to do something (or not to do something) on their land, for a conservation purpose for the public good. As well as protecting or improving the environment, a conservation purpose can also cover natural resources, a whole setting or cultural, artistic, historic, or archaeological interest. Conservation covenants will be registered against the land, so they will bind future owners and are likely to be used to secure commitments in relation to biodiversity and other planning requirements. They have the potential to be very flexible, with landowners free to negotiate the precise terms of the covenant, including how long it will last. The relevant rules will come into force on 30 September 2022. If you are interested in pursuing this, your solicitor will be able to advise you on how to go about it.

Look after what you have already

As a final note of caution, do not forget any trees already on your commercial property sites. They should be checked regularly to make sure they do not present any health and safety risks. Bear in mind that existing trees may be covered by tree preservation orders, which mean that even pruning will require consent from the local authority.

In recent years, the courts have taken a dim view of landowners who deliberately damage protected trees. One owner was recently prosecuted for poisoning a large pine tree which was reducing the value of his property. As well as legal costs of £25,000, he was fined £55,000, £50,000 of which reflected the uplift in value he hoped to achieve by killing the tree.

How we can help

Whether you need advice on energy efficiency, biodiversity net gain, or the practicalities of creating and maintaining green space, our solicitors are here to help you make the most of your commercial property investments.

For further information, please contact Ronnie Z. Blewitt in the commercial property team on 01227 907 385 or 0203 905 5507 or email ronnie@principleslaw.co.uk . Principles Law has appointment only offices in Mayfair, London, Canterbury Kent and London’s West End.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Redeveloping commercial property around your tenant

Wed, 14 Sep 2022 08:05:11 GMT

Redeveloping commercial property around your tenant.

Redeveloping parts of a building in your portfolio, to create a more flexible layout or perhaps add additional floors, can be a good way to enhance investment value. This is easiest in a vacant building, but you may have good tenants and want to preserve your income stream. If so, you must take the needs of your tenants into account when you are designing your development scheme so that you do not interfere with their rights under their leases.

‘If a landlord has plans to improve or extend a building, they will not want their plans thwarted by an injunction from an angry tenant,’ says Ronnie Z Blewitt a Solicitor in the commercial property team with Principles Law. ‘A dispute with an existing tenant will not only add delay and expense to a project but it could also damage the landlord and tenant relationship in the long term.’

To make sure this does not happen, it is vital to get early advice from your solicitor about your plans and how best to reduce the impact on your tenants.

Rights to redevelop

If you want to carry out any redevelopment work which is likely to affect your tenants’ businesses, the first thing your solicitor will do is check to see what rights the lease gives you. Commercial leases often say expressly that the landlord has the right to carry out redevelopment works in other parts of the building, or on neighbouring land or buildings owned by the landlord, even if that interferes with tenants. The lease may refer specifically to things like scaffolding and interference with the usual access routes and levels of light. Rights like this are a good starting point, but they do not mean that you can carry out every type of works regardless of the impact on your tenants.

Express redevelopment rights may be limited by safeguards which a tenant’s solicitor negotiated when the lease was granted. The landlord may have an obligation to keep any adverse impact on the tenant’s business to a minimum but a wide clause like this is open to interpretation, which is how landlords and tenants often get into a dispute.

The other key aspect of the lease is the landlord’s covenant to allow the tenant ‘quiet enjoyment’. In recent court decisions about whether development work by landlords was causing unreasonable interference with their tenants’ businesses, the covenant for quiet enjoyment has been the tenants’ trump card.

Quiet enjoyment

A commercial lease will almost always contain an express quiet enjoyment covenant. In the rare cases where it is not set out in the lease, it is implied by law. Quiet enjoyment means that the landlord must not do anything to prevent the tenant occupying and using the premises for the use permitted by BCL 850 - COMPROP - Redeveloping commercial property around your tenant vFPS the lease. Where the lease reserves rights to redevelop, they must be read together with the quiet enjoyment covenant. The practical outcome is that even if there are express rights to carry out works, the landlord must take all reasonable steps to minimise disruption to tenants.

If you are planning works, you should think widely about how they might affect your tenants. The impact of scaffolding, hoardings and noisy works are obvious, but you should also consider things like access. You should also consider the nature of your tenants’ business. There have been high profile court cases involving luxury car showrooms and art galleries, where disruptive work was a significant deterrent to customers. If you have retail tenants, works that require adjacent footways to be closed could adversely affect the tenants’ business by reducing footfall to their premises, even if your works do not otherwise affect them.

Disputes over quiet enjoyment and interference can arise in relation to open land as well as commercial buildings if a tenant uses that land for the purposes of a business. One of the recent cases involved farmland and whether the landlord was entitled to enter to dig boreholes and carry out surveys in preparation for a larger development.

Negotiation

If you end up in a dispute you will need legal advice to help settle it, so it is better for everyone to avoid getting into this situation. Clear communication with your tenants from the very beginning is the best strategy and your solicitor can negotiate with your tenants’ representatives. To give yourself the best chance of your project going smoothly, there are some key points to think about:

Make sure your tenants know exactly what you are planning to do and how you will protect them from unreasonable interference. You may need to agree a method statement for how the works will be carried out and a clear programme, so the tenants know what to expect and when.
Consider whether you can time the works to cause less disruption. Retail tenants will not want to have access or visibility reduced during key trading periods like Christmas and Easter.
If you need to erect scaffolding or hoarding, think about how you can offer your tenants visibility, with signage and obvious access routes.
If you are not able to carry out your intended works without significant disruption to tenants, you may need to offer them rent reductions for an agreed period or even arrange for them to move temporarily to alternative premises. It is important to document this sort of arrangement properly, and this is something your solicitor can advise on.

How we can help

development project that goes smoothly can enhance the building for both landlord and tenants. Good legal advice from the outset will enable you to work within the rights reserved by the lease and keep tenants engaged and informed. This will give you the best chance of completing the redevelopment without running into unexpected disputes and costs. For further information, please contact Ronnie Z Blewitt in the commercial property team on 01227 907385 or 0203 905 5507 or email ronnie@principleslaw.co.uk Principles Law has appointment only offices in Canterbury, Kent and Mayfair, London.

T his article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Legal Tips For Optimising The Sale Value Of Commercial Property

Thu, 14 Apr 2022 13:24:55 GMT

Legal tips for optimising the sale value of commercial property

If you are reviewing your commercial property portfolio, you may decide that the time is right to sell some of your property. It goes without saying that you will want to get the best possible value from the sale. Prices are strongly affected by the local property market which is linked to the level of activity in the wider economy. Although you cannot change the market, there are things you can do to make your property more appealing and optimise your return, especially if you work together with an experienced property lawyer.‘

If you plan well ahead, you give yourself the best chance of a smooth sale at a good price’, says Ronnie Z. Blewitt a Solicitor at Principles Law. ‘The key is to put yourself in the shoes of a possible purchaser and think about what they want to see and pay for, and what might put you in a stronger negotiating position.’

Selling as an investment

If your property is likely to make a good investment purchase, then you should focus on getting a strong tenant in place to create a reliable income stream. A lease with at least five years left to run will be more attractive to a buyer than a shorter term. Your solicitor can help you negotiate a letting on standard market terms. Ideally, the tenant should be responsible for repairing the property and for covering the cost of insurance, rates, utilities, and any other services provided.

If you already have a tenant, make sure that there are no unresolved problems or disputes (for example, failure to repair or unauthorised alterations) and no arrears of rent. Again, your solicitor can help you to get any issues resolved.

Selling a vacant property

If your property is currently empty, you should focus on what potential occupiers will want to see. For example:

Is the property in good repair and well-presented? Could you make it more attractive with some small improvements?
Is there adequate parking and is it well-lit? If there is currently no parking space, could you create some?
Are fences and gates in good condition and is the property secure?
Good broadband is a key requirement for most businesses. If high-speed internet services can be secured, this will make your property more attractive.
Think about energy efficiency. You should aim for an EPC rating of at least E, but a higher rating should make your property more attractive. You may be able to increase the EPC rating by making relatively inexpensive changes, such as switching to energy efficient lighting and adding insulation.

Spot problems before they arise

Once you have found a buyer, you will want the sale to go as quickly and smoothly as possible. If your buyer discovers an environmental issue when they do their searches or their solicitor points out a problem with the legal title to the property, they will either walk away or try to negotiate a discount.

There is a lot you can do in advance to stop this happening if you take steps to identify and deal with possible problems. Your solicitor can check for things like:

missing title deeds;
restrictive covenants limiting how the property may be used or developed; and
proper rights to use access roads, parking, and storage areas.

These can usually be dealt with by getting the right documentation in place, getting out-of-date covenants removed or, if necessary, by taking out an insurance policy.

If you allow time to do this before you market the property, potential buyers will see a clean trouble-free investment which is likely to be more attractive. Even getting outdated entries removed from the legal title held at HM Land Registry can remove friction from a sale.

If you know or suspect that the property has been used in the past for something that may have caused pollution, or you are aware of protected species like bats or newts on the site, you will need professional advice on how best to deal with it. Your solicitor may be able to include wording in the sale contract that will protect you against any environmental claims in the future.

How we can help

Thinking ahead about making your property appealing and cleaning up any practical and legal title problems will make it easier for a buyer to say ‘yes’ to your property at a price you are happy with. If you undertake a legal audit in advance, you could also save time and money during the sale process because there should be no nasty surprises to create unexpected delays and costly negotiations.

For further information, please contact Ronnie Z. Blewitt in the commercial property department on 01227 907 385or email ronnie@principleslaw.co.uk . Principles Law has appointment only offices in Canterbury, Kent and Mayfair, London.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.

Restrictive Covenants

Mon, 11 Apr 2022 16:09:49 GMT

Restrictive Covenants, touch down for Bath Rugby Ltd

Restrictive covenants and development sites

Even the most promising development may be thwarted if the land is subject to one or more restrictive covenants. Restrictions of this sort can prevent land being built on or being used for specific purposes for many years, even if the development has planning permission. There are practical ways to work around restrictive covenants if you know about them, so it is a good idea to get advice from your solicitor as early as possible.

‘Restrictive covenants can cause considerable issues for developers, creating delays, ill feeling and prejudicing the profitability and GDV of a potential site,’ says Ronnie Z. Blewitt , commercial property solicitor with Principles Law i n Kent and London. ‘There may have been good reasons for a restriction when it was imposed but it will still bind the land even if circumstances have changed, sometimes more than a hundred years later.’

What are restrictive covenants?

Restrictive covenants are agreements between landowners preventing a specified use or activity on one piece of land, for the benefit of another. They are typically imposed when someone sells off part of a larger site and wants to make sure that the part sold will not be used in a way that interferes with their enjoyment of the part they are retaining.

Examples of typical restrictive covenants include:

not building on certain parts of a site;
not building more than a specified number of dwellings on a site;
not building above a specified height; or
not using the land for specific trades or businesses, or in a way that may cause a nuisance to the owners of the land with the benefit of the covenant.

A restrictive covenant may say that development requires the consent of the landowner with the benefit of the covenant. As time passes, it often becomes difficult to identify who currently has that benefit, especially where land has been subdivided and sold on.

What are the penalties for breaching a restrictive covenant?

It can be tempting to ignore a restrictive covenant and carry on with the development, especially where the covenant was imposed many years ago, but this is very risky. A developer could be subject to a court injunction requiring the work to stop or may even be ordered to demolish a completed building. The courts can choose to impose damages, instead of stopping the development, but are likely to impose harsher remedies on developers who have deliberately ignored a restriction without trying to negotiate a release or using the proper statutory process (see below).

What can you do about a restrictive covenant?

The covenant may no longer be enforceable. The benefit of covenants imposed before 1926 must be legally ‘annexed’ to land by specific wording in sale documents and if this was not done correctly, there may be no one who can enforce the covenant. Bath Rugby Club (Bath Rugby Ltd vs Greenwood & Ors Bath Recreation Ltd [2021] EWCA Civ 1927) have recently won a legal battle to prove that a restrictive covenant which could have prevented them upgrading their stadium was not enforceable. In that case, the land intended to have the benefit of the covenant could not be clearly identified, so the Court of Appeal decided that the covenant could not be enforced. It may be a welcome decision for those who would like the land to continue providing an open space for recreational purposes and local rugby fans. The rules on this are complex and depend on when the covenant was entered into, how it was worded, and whether it has been correctly registered, so good legal advice is essential.

If your solicitor concludes that the covenant is enforceable, there are three options for dealing with it :

Applying to court - there is a statutory process for getting a covenant altered or removed if the court is satisfied that it is obsolete or it prevents a reasonable use of the land, or that the person with the benefit has agreed or will not be adversely affected. This really depends on the specific situation and your solicitor will advise you about how likely you are to succeed. Your conduct could make a difference here. In 2020, the Supreme Court refused to modify a restrictive covenant affecting a development next to a children’s hospice, expressing disapproval of the way the developer had behaved in continuing to build, despite being aware of the covenant.
Negotiation - if you know who has the benefit of the covenant, you may be able to negotiate with them to release it, usually in return for a payment. If the covenant was imposed when part of the adjacent land was sold off, that land may be bound by a matching covenant, in which case you may be able to agree a mutual release.
Insurance - depending on the age and wording of the covenant, you can usually get indemnity insurance to cover any costs and losses incurred if you develop the land in breach of the covenant and it is enforced against you. The premium will depend on the insurer’s assessment of how likely it is that someone will try to enforce the covenant. Bear in mind that insurers will usually refuse to insure if you have already approached the person with the benefit of the covenant so, even if negotiation looks like the obvious first step, you must discuss with your solicitor in advance whether insurance could be a better solution .

How we can help

If you inadvertently build in breach of a restrictive covenant, or if you buy land without knowing that it is subject to restrictions, it could incur you unexpected costs and may even stop your development plans completely. Getting good legal advice at the outset will help you assess the risk and decide on the best tactical approach to make sure you do not lose a profitable development opportunity.

For further information, please contact Ronnie Z. Blewitt in the commercial property team on 01227 907 385or email ronnie@principleslaw.co.u k. Principles Law has appointment only offices in Canterbury, Kent and Mayfair, London.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.