Understanding Positive and Restrictive Covenants in Conveyancing
Posted on 8th May 2024
Understanding Positive and Restrictive Covenants in Conveyancing
When buying or selling a property, it is crucial to understand the different types of covenants that may be attached to the land, as they can significantly impact your rights and responsibilities as a homeowner. Our conveyancing solicitors in Preston find that these are typically categorised into two types: positive covenants and restrictive covenants.
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Positive Covenants
Positive covenants usually require the landowner to perform certain actions. These could include maintaining a boundary fence or contributing to the upkeep of shared areas. However, the burden of positive covenants generally does not transfer with the land when it’s sold; instead, they are personal to the parties who agree to them. This means that subsequent owners may not be legally bound by these covenants unless specific arrangements are made during the property transaction.
Restrictive Covenants
Restrictive covenants, on the other hand, limit how a property can be used. This could include prohibitions against building certain types of structures, conducting business activities, or making significant alterations to the property. Unlike positive covenants, restrictive covenants do ‘run with the land’, meaning they apply to the property regardless of changes in ownership, thus binding future owners.
Impact on Property Sales or Purchases
These covenants can significantly impact your property transactions in several ways:
Sales:
If you are selling a property with restrictive covenants, these could affect the property’s marketability and value. Potential buyers might be deterred by limitations on how they can use the property or by the obligation to pay for certain upkeep activities.
Purchases:
As a buyer, failing to adhere to these covenants can result in legal disputes, financial penalties, or the requirement to revert any unauthorised changes. It’s essential to understand any covenants attached to the property, as they can affect your ability to make changes or use the property as you intend.
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How Conveyancing Solicitors Can Help
A conveyancing solicitor plays a critical role in identifying and explaining the impact of these covenants on your property transaction. They can:
Review and Interpret Covenants:
Solicitors can explain the terms and implications of any covenants attached to the property and how they might affect your use or development plans.
Negotiate and Resolve Issues:
If problematic covenants are identified, your solicitor can negotiate with the other party to modify, remove, or clarify these terms before finalising the sale or purchase.
Provide Legal Advice:
They can advise on the legality and enforceability of existing covenants and suggest practical solutions, such as obtaining indemnity insurance where applicable.
Understanding the nature and implications of positive and restrictive covenants is essential for anyone involved in a property transaction. Ensure that you engage a knowledgeable conveyancing solicitor early in the process to identify and address any potential issues related to property covenants before your sale or purchase proceeds to completion. For advice, call our Conveyancing Solicitors in Preston on 01772 783314 or email property@mglegal.co.uk.
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Tagged as: Conveyancing, Solicitors in Preston
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