POSTED 31 October 2018 General

What are Restrictive Covenants?

When you rent a property, you will receive a contract with a list of agreements between you and the freeholder (also known as the landlord), these are leasehold covenants.

These agreements explain the responsibilities and rights of both the tenant and the landlord in relation to the rent of the property.

If either side breaches their covenants, there can be serious implications.

Expressed and implied covenants

When you rent a property, your contract will contain a number of expressed covenants. There are also a number of implied covenants, these are not included in the contract. Both should be adhered to.

Expressed

  • These are directly expressed and included in the written tenancy agreement.
  • An example of an expressed covenant may be that the landlord promises to keep the outside of a property in good repair.

Implied

  • These are covenants that are made between the landlord and tenant but do not appear in the tenancy agreement.
  • These may come from existing statutes or common laws.
  • An example of an implied covenant is that the tenant should be allowed quiet enjoyment of a property during their lease, free from the landlord’s interference.

Positive and restrictive covenants

If you read your lease, you will come across the terms positive covenants and restrictive covenants.

Positive covenants are those things that must be done by either the landlord or tenant. The majority of a landlord’s covenants will fall under this category; however, a leaseholder is also subject to positive covenants. An example of a positive covenant is that a landlord must buy a fully functioning fridge for a property.

Restrictive covenants are those things that must not be done. These generally instruct a tenant on their responsibilities with regard to the rent of a property. Examples of restrictive covenants include not keeping animals in the property, not causing a nuisance to neighbours and not parking vehicles outside of designated spaces.

Covenant breaches

Breaches of leasehold covenants can result in serious action being taken.

If a tenant breaches one or more of the covenants, a landlord has the right to cancel the tenancy agreement early by activating the forfeit clause in the contract. In order to prematurely terminate the contract, a landlord must obtain a court order to retake possession of the property.

If this happens, a tenant can appeal to the court for relief from the landlord’s early termination application. For an appeal to be successful, a tenant must be up-to-date with all rent payments and pay for the landlord’s legal costs.

To avoid legal proceedings from taking place, a tenant should comply with whichever covenant they have broken. For instance, if they are breaking a covenant by keeping a pet in a property, they can remedy the situation by removing the pet from the premises.

On the other hand, if a landlord, or their estate agent, knows of a covenant breach but does not broach the subject with the tenant and then continues to ask for rent as normal, they waive their right to activate the forfeit clause.

From the point of view of the tenant, they can appeal for compensation if a landlord breaches a covenant.

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