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Restrictive Covenant affecting Commercial Property

There was an incident in Garstang, Lancashire, recently reported in the press, in which an established business selling wine was prevented from operating from its premises used as a wine shop because of the discovery of an old restrictive covenant prohibiting the use of the property for the sale of alcoholic beverages.  A covenant on these lines is very common in older documents, and is intended to preserve the character of a neighbourhood by controlling certain activities.  Unfortunately this covenant was not spotted when the shop was first opened: it was only when the people running the shop wanted to take a longer lease or buy the freehold to capitalise on their investment that their solicitor advised them of the existence of the covenant.  This meant they had to close, causing them considerable financial loss and meaning the years of effort they had spent building up the business were largely wasted.

It is very important when setting up a business to consult a solicitor concerning the terms on which the property is held, whether this is on a lease, tenancy at will or even a bare licence.  The solicitor will advise you in relation not only to the document itself, but any covenants, restrictive or positive, on the title, and how these affect your business proposition.  Not to do so is a false economy, and we at Quality Solicitors Amphlett Lissimore often see the results of such misguided attempts to save money.

If you are considering taking premises in connection with your business we can help you avoid such pitfalls by the provision of timely advice concerning the property.  Please do not hesitate to consult one of the knowledgeable and experienced solicitors in our Commercial Property Team, who are based in Crystal Palace but have a presence in Clerkenwell and Camberwell, and are able to visit our other offices in Raynes Park and Bromley by prior appointment.   

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