How restrictive covenants could impact the future of your farm

Restrictive covenants are a long-established feature of English property law which shape how land is used and influences potential growth and development.

A restrictive covenant is a legally binding promise that attaches to the land and runs with the land, binding future owners. Unlike a positive covenant which requires owner to take action, a restrictive covenant requires an owner to refrain from doing something, for example, not using the land for anything other than agricultural use. Whilst they are most often associated with residential estates, restrictive covenants are equally significant in farming, affecting everything from diversification, new structures and planning for the future of the farm.

There could be historic restrictive covenants that affect your land, these were usually entered into to help protect the long-term character and function of agricultural holdings. Modern restrictive covenants seem to be more varied and can range from limiting development, to prohibiting the lands use for intensive livestock operations. This can present both challenges and opportunities, with many farmers now looking to diversification such as tourism, equestrian or renewable energy, the restrictive covenants may limit such development. Such limits may hinder modernisation of farms, especially when the covenant dates from decades earlier and no longer reflects current farming needs. However, when drafted correctly, such covenants can preserve rural character and help protect retained land or neighbouring farms from harmful changes in the land use.

Therefore, it’s worth examining the title to a property (which may or may not be registered at H M Land Registry), before you invest in new diversification projects or developing agricultural land. An examination of the title can let you know whether there are such covenants which affect your land, but also whether such covenants are enforceable.  There are several factors which may affect the enforceability of covenants, such as whether the covenant “touches and concerns” the land, whether the benefitting land can be identified and whether the covenant has become obsolete or if it is discriminatory.

Despite the age of some restrictive covenants, they continue to influence land use.  Farming businesses must adapt to environmental schemes, shifting markets and policies, however, breaching a restrictive covenant can still cause serious consequences. The beneficiary of such covenants may be able to bring legal proceedings and claim for damages or an injunction. If a breach has already occurred, it also undermines future negotiation power when trying to reach an agreement for the release of such covenants.

Before progressing with any plans, it is sensible to seek early legal advice to understand your options. In some cases, covenants can be modified or discharged or negotiated as part of wider discussions about land use. Taking the time to assess your position now can help you avoid costly disputes later and ensure your farming business can evolve with confidence.