Restrictive Covenants are obligations imposed permanently on properties usually as a result of a sale taking place where the seller retains nearby or adjoining land. Equally they are usually enforceable by the original seller and often by those who subsequently acquire the seller’s retained land.

What is an example of a restrictive covenant?

A restrictive covenant is an agreement that restricts a company or other party to a contract from engaging in certain actions. For example, a restrictive covenant entered into with a public company might limit the amount of dividends the firm can pay its shareholders. It could also place a cap on executive salaries.

What does restrictive covenants mean in employment?

Restrictive covenants against competing with an ex-employer A restrictive covenant is a clause in an employment contract or services agreement that works to prohibit an individual from (among other things) competing with his or her ex-employer for a certain period after he or she has left the business.

What is a covenant restricted community?

A restrictive covenant creates a deed restricted community. It is an agreement that states what a homeowner can or cannot do with their house or land. They are binding legal obligations which sellers write into the deed or contract of the property, and they can have penalties against buyers who fail to follow them.

What are examples of covenants?

Examples of affirmative covenants include requirements to maintain adequate levels of insurance, requirements to furnish audited financial statements to the lender, compliance with applicable laws, and maintenance of proper accounting books and credit rating, if applicable.

How do you get a covenant lifted?

If it is not enforceable then an application can be made to the Land Registry to remove the covenant from the deeds. If it is, it may be possible to negotiate with the party that has the benefit of the covenant to remove by entering into a Deed of Release.