What is a restrictive covenant?
A restrictive covenant is a contract that limits the number of uses for land or property. The contract can have historical applications and may even date back hundreds of years. If the covenant is enforced, it will put your development on hold.
For example, someone could use a restrictive covenant to build five houses; one for themselves and four to be sold. The contract could limit someone from over-developing the land, and the contract could be highlighted hundreds of years in the future to restrict what the land can be used for. In most cases, solicitors will usually be the one to point out restrictive covenants.
In order to ensure that the development is protected, a developer, building contractor or homeowner must obtain restrictive covenant insurance. It should ideally be obtained before the build, but can often be obtained post-build. It ensures that the development is protected so that if the restriction was discovered, the build can still proceed without being held back.
If one does not obtain restrictive covenant insurance, the build could be slowed down or even completely cancelled while also incurring settlement costs. In some cases, the buildings may need to be demolished and returned to the original condition, but the insurance can cover these costs.
So if you are a property owner or developer and think you may be affected then contact Construction Insure today. We are an independent insurer which means that we have access to an enormous range of policies. We specialise in all things property related and so you can feel confident that the advice we offer will ensure you get the right restrictive covenants insurance for your individual situation.