What happens if I breach a restrictive covenant in my deeds?

• The parties benefiting from the covenant may choose to take legal action against you for breach. This could result in court proceedings, where the court could issue an injunction to stop the activity that is in breach of the covenant. In extreme cases, you might also be required to pay damages or compensation to the parties affected by the breach.
• The court might issue an injunction, which is a court order that compels you to stop the activity that is in violation of the covenant. Failure to comply with the injunction could result in further legal consequences.
• In cases where the breach causes financial harm to the parties benefiting from the covenant, you might be required to compensate them for any losses incurred as a result of your actions.
• In some cases, you might be required to take actions to rectify the breach, such as restoring the property to its original condition or ceasing the activity causing the breach.
• Depending on the situation and the parties involved, negotiation might be an option. You could potentially reach an agreement with the parties benefiting from the covenant to resolve the breach without going through legal proceedings.
• If you have obtained indemnity insurance to cover potential covenant breaches, the insurance policy may provide financial protection in case legal action is taken against you.

It is important to understand that the consequences of breaching a restrictive covenant can vary widely based on the specifics of the situation. If you believe that your intended actions might breach a covenant, it’s advisable to seek legal advice before proceeding. A legal professional can assess your situation, review the covenant terms, and provide guidance on how to navigate the situation while minimising potential legal risks.

This article is intended for guidance only – 2023