Restrictive Covenant Waiver (UK)

A Restrictive Covenant Waiver in the United Kingdom defines the rights, restrictions, and obligations attaching to a particular parcel of land and binds the owners who take it, and takes its legal force from the Law of Property Act 1925.

A restrictive covenant in English property law is a negative obligation imposed on the owner of a parcel of land (the burdened or servient land) for the benefit of another parcel of land (the benefited or dominant land). The law of restrictive covenants developed from the landmark equity decision in Tulk v Moxhay (1848) 2 Ph 774, in which the Court of Chancery held that a restrictive covenant affecting land would be enforceable not only against the original covenantor but against all subsequent owners of the burdened land who acquired it with notice of the covenant. The principle in Tulk v Moxhay was subsequently refined by the courts to require that the covenant must be negative in substance, must have been intended to benefit land retained by the covenantee at the time the covenant was imposed, and must have been taken for the benefit of that land (not merely for the personal benefit of the original covenantee).

Restrictive covenants on registered land in England and Wales are noted on the Charges Register (Part C) of the registered title at HM Land Registry. Under the Land Registration Act 2002, a registered restrictive covenant binds all successors in title to the burdened land, regardless of whether they had actual knowledge of the covenant. On unregistered land, restrictive covenants imposed after 1925 must be registered as a Land Charge Class D(ii) under the Land Charges Act 1972 to bind a purchaser for money or money's worth.

The statutory mechanism for modifying or discharging a restrictive covenant without the covenantee's consent is section 84 of the Law of Property Act 1925, which gives the Upper Tribunal (Lands Chamber) jurisdiction to modify or discharge a restrictive covenant on any of four grounds: that the covenant has become obsolete due to changes in the character of the property or neighbourhood; that the covenant impedes some reasonable use of the land; that the persons entitled to the benefit have agreed (expressly or by implication) to the modification or discharge; or that the proposed discharge will not injure those entitled to the benefit. Section 84 proceedings are slower and less certain than obtaining a voluntary waiver deed from the covenantee.

A Restrictive Covenant Waiver deed in England must be executed as a deed (not a simple contract) in accordance with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. For an individual, execution as a deed requires signature in the presence of a witness who attests the signature; for a company, execution requires either two authorised signatories or a single director in the presence of a witness, in accordance with section 44 of the Companies Act 2006.

A UK Restrictive Covenant Waiver is needed when a landowner in England or Wales wishes to carry out works, change the use of their property, or develop their land in a way that would breach an existing restrictive covenant, and the owner of the benefited land is identifiable and willing to grant a release.

A waiver is needed when a homeowner wishes to build an extension, a garage, or a new dwelling on their plot but discovers that the title to their property contains a covenant prohibiting further buildings, restricting the number of dwellings, or limiting the use to a single private dwelling house. These covenants are particularly common on properties sold from residential estates developed in the 1920s, 1930s, and post-war periods, where the original developer imposed covenants to maintain the character of the estate.

Property developers who acquire land for residential or commercial development need to investigate all restrictive covenants affecting the title before proceeding. Where the development scheme would breach a restrictive covenant — for example, by constructing multiple dwellings where only one is permitted, or by using land for commercial purposes where only residential use is permitted — the developer must either obtain a waiver deed from the covenantee, apply to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925 for a discharge, or obtain restrictive covenant indemnity insurance.

A waiver is needed before planning permission can be acted upon in practice: a local planning authority may grant planning permission for a development without knowing about or considering a private restrictive covenant. Planning permission does not override a restrictive covenant — the covenant can still be enforced by the covenantee even where the development has planning permission.

Where a company wishes to change the use of commercial premises — for example, converting an office building to residential use, or converting a retail unit to a restaurant — that are subject to a user covenant in the title, a waiver from the covenantee is needed before the change of use can proceed without legal risk.

Property owners who are selling a property and who know that the existing use (or proposed future use by the buyer) may breach a covenant should proactively seek a waiver or indemnity insurance before marketing the property. An undisclosed restrictive covenant breach can delay or abort a sale if the buyer's solicitor raises it during conveyancing.

A properly drafted UK Restrictive Covenant Waiver deed must identify the parties, describe the covenant being released, define the extent of the release, and comply with the formalities for a deed under English law.

The parties clause identifies the covenantee (the person granting the waiver, who owns the land that benefits from the covenant) and the covenantor (the owner of the burdened land who benefits from the release). Both parties must be identified by their full legal names and addresses. Where either party is a company, the registered company number and registered office address must be stated, and the deed must be executed in accordance with section 44 of the Companies Act 2006.

The recitals section sets out the background to the deed: the title to the benefited land, the title to the burdened land, the date and origin of the restrictive covenant, and the covenantee's agreement to release the covenant. The recitals contextualise the operative provisions and assist HM Land Registry in processing the application to cancel the covenant entry.

The description of the covenant clause quotes or paraphrases the precise wording of the existing covenant as it appears in the original conveyance or Land Registry register. The description must be sufficient to identify exactly which covenant or covenants are being released. Where multiple covenants exist and only some are being released, the clause must identify with precision which covenants are the subject of the release.

The description of the burdened land clause identifies the property to which the covenant relates by its HM Land Registry title number and full postal address. Where the release relates to only part of the burdened title — for example, the garden land to be separated for a new dwelling — a plan must be attached identifying the relevant part.

The operative release clause contains the substantive provision by which the covenantee releases and discharges the burdened land from the covenant absolutely and irrevocably. The clause should confirm that the release is made with full title guarantee, meaning that the covenantee has the right to release the covenant and that the release is not subject to any undisclosed third-party claims.

The consideration clause records the consideration paid by the covenantor to the covenantee in exchange for the release. Commercial releases typically involve a negotiated payment that reflects the development value being unlocked. Nominal consideration (a peppercorn) may be used where the release is by way of gift or where the parties are family members, but a deed executed for valuable consideration provides stronger protection against future challenge.

The registration clause requires the covenantor to register the release at HM Land Registry promptly after execution. For registered titles, an application to cancel the entry of the covenant in the Charges Register must be made using Form AP1 (application to change the register) or Form RX3 (application to cancel a restriction). The Land Registry registration fee is based on the value of the transaction.

The execution clause must comply with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989: the deed must be signed by the covenantee in the presence of a witness who attests the signature, and both signatures must be present on the same document (or exchanged counterparts where parties sign separately).

Under the Landlord and Tenant Act 1985 and Housing Act 1988, disputes may be referred to the First-tier Tribunal (Property Chamber). Section 11 of the Landlord and Tenant Act 1985 sets repair obligations. The Land Registry maintains title records under the Land Registration Act 2002. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 governs contracts for the sale of land. The Tenant Fees Act 2019 restricts permitted payments. The forms-legal.com Restrictive Covenant Waiver (UK) template covers the mandatory elements under Law of Property Act 1925.