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One of the most common types of legal indemnity enquiries we receive is for the breach of freehold restrictive covenants, and it’s easy to understand why.

As you know, restrictive covenants place specific limitations on how a property can be used or modified. Some of the examples that we see regularly are where there are covenants preventing changes to the use of the land, limiting changes to the property itself, restricting any future development on a site, or placing a limit on the number of dwellings on a piece of land. Written into the title deeds, typically by past sellers looking to protect their retained land, they often remain legally binding for all future owners, with the full effect of the restriction only coming to light many years later.

This was the case in the recent ruling of Hassan & Osman v Heath (2025), which demonstrates how restrictive covenants have the potential to prevent, or significantly impact, proposed developments or alterations to a property, even after planning permission has been granted.

A recent ruling

The dispute revolved around a restrictive covenant imposed in 1986, which prohibited alterations to the external elevation of a two-storey Victorian house owned by a couple, Mr Hassan and Dr Osman. Although aware of the restriction when they bought the two-bedroom property in 2017, the couple always intended to extend it, and had been advised that the existence of the covenant would be “no obstacle” to their plans. 

After a few years, the couple took the first step towards realising their ambitions for their home by submitting a planning application for a single-storey side extension on the ground floor, along with a loft conversion and roof extension to create a third bedroom. The owner of the neighbouring property, Mr Heath, submitted the sole objection to their plans, but in spite of this planning permission was granted in January 2024.

Arrested development

Before the works began, Mr Hassan and Dr Osman served Mr Heath with a required Party Wall notice, at which point he responded with a formal letter that threatened an injunction to stop them building. When Mr Hassan and Dr Osman went ahead with the building work anyway, Mr Heath sought and successfully obtained the injunction, which halted construction midway through the ground floor works and before attention turned to roof renovations. In response to the injunction, Mr Hassan and Dr Osman made an application to the Upper Tribunal to modify the covenant to permit the alterations, and enable them to continue with their extension.

The Tribunal considered the ground floor works and the roof works as two separate issues. Ultimately, they concluded that the ground floor works would not have a substantial and detrimental impact on Mr Heath’s property and modified the covenant to permit the completion of the ground floor extension. However, it took a different view on the loft conversion. Here, the Tribunal concluded that the roof works would have a "significantly overbearing effect" on Mr Heath’s garden and conservatory, and refused to modify the covenants to allow this aspect of the extension. The Tribunal ruling will have left both sides able to claim some sort of victory, although neither party achieved everything that they wanted. In addition, they will have been left with substantial legal bills, alongside the stress caused by the dispute. 

An insurance solution

This case clearly highlights how disruptive restrictive covenants can be when they’re enforced, and explains why we’re asked to provide cover for scenarios affecting all types of property transactions. Whether you’re acting for a client on the purchase of a residential property where past alterations or a change of use have breached a covenant, or a proposed breach of a density restriction on a development site being acquired by a housing developer, our experienced underwriters can help. 

We can also consider cover for unknown restrictive covenants, where the title deeds may be incomplete, with missing pages potentially containing all manner of covenants, which a buyer or developer could innocently and unknowingly breach by changing the use of the property after completion, or undertaking their proposed works.

Our policy covers the costs of defending any legal claim against the insured, and negotiating for a release or modification of the covenants, if they are deemed legally enforceable. If the claim successfully prevents the building work, the policy will also cover the expense of complying with an injunction, along with any reduction in market value of the property/land, and any abortive costs that may be incurred (such as surveyor, architect, or planning consultant fees).    

So, whether a restrictive covenant is old, unusual, or even unknown due to missing title deed(s), our cover can help. If your transaction involves an existing property where covenants have already been breached, or you have a proposed development where the covenants will be breached, call our underwriters on 01603 617617, email enquiries@cli.co.uk, or sign in to Elite.