Many developers are seeking to develop land that is burdened by one or more historic restrictive covenants.
Where a covenant limits development then even a best case scenario usually involves an expensive defective title insurance policy. A worse case scenario can see a developer have to walk away from an otherwise prime development site due to a “no build” or other burdensome covenant.
Wouldn’t it be great if there was some way to magically make such a covenant disappear?
Well, sometimes there is. And while we can’t guarantee the Gateley fairydust will work on every occasion, there is a useful trick that is worth looking at in these situations.
Where you have a troublesome historic covenants on your land, check the Land Registry title for two items of information:
(a) the date of the document that created the covenant; and
(b) the date the land was first registered by the Land Registry.
Where the covenant pre-dates first registration (but is dated 1 January 1926 or later) then the covenant will only bind the land if it was correctly registered as a class d (ii) land charge against the name of the original covenantor (which can be checked for a nominal fee). This is because any covenant that was not registered as a land charge at the time would not have bound the purchaser for value when they applied for first registration.
This holds true even if the Land Registry have subsequently registered the covenant on the current title*.
We frequently apply for covenants to be removed in these circumstances and with a wave of the Gateley wand (and a little help from the Land Registry) – poof! – the covenant disappears.
This post was edited by John Kiff. For more information, email email@example.com.
*Land Registry rules do not guarantee that any covenants listed on the title to land are valid, merely that if a covenant is valid then it will be taken to bind a purchaser. Hence it is usual Land Registry practice to simply note on the title all covenants referred to in a transfer rather than consider the validity of each covenant. So much for the Land Registry’s stated aim of creating a title as a complete record of interests in a given plot of land.