It comes after MPs from the Housing, Communities and Local Government (HCLG) committee highlighted cases where homeowners were facing unreasonable demands for large sums of money relating to covenants.
Earlier this year, the BBC reported that residents on an East Sussex estate were facing charges for hundreds of thousands relating to sheds and home extensions.
A firm bought the title for the land in 2023 and said building alterations needed retrospective permission, according to report.
Restrictive covenants can be attached to the land where freehold properties are built by developers – in effect, setting out rules for how a home can look or be used.
It could mean that permission is needed for extensions, for example, which is separate to planning permission.
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In some cases, restrictive covenants can also affect whether a property can get a mortgage, as lenders may not feel always feel comfortable lending against such circumstances.
In one case reported by the Financial Ombudsman Service (FOS) in 2023, First Direct withdrew a mortgage offer after it was found the property had a covenant restricting sale of the property to people who could show an existing link to the local area.
In reply to the HCLG, minister for housing Matthew Pennock last month said he was “aware of cases in which covenants appear to have been used in ways that have caused significant concern”.
The minister said the government has not nationally assessed the trading and enforcement of restrictive covenants.
However, Pennycook (pictured) added: “Further work is needed to understand whether the existing legal framework provides adequate safeguards.”
It also seems the government could be considering whether homeowners get first right of refusal when selling titles that hold restrictive covenants.
Pennycook continued: “A statutory right of first refusal may, in principle, give homeowners greater visibility or control where a developer, freeholder or other person proposes to sell an interest that carries enforcement rights.”
Joanne Ellis, partner and head of the consumer land department at Stephensons, said: “The true purpose of a restrictive covenant ought to be the protection of land and property rights, rather than creating an opportunity for extortion.
“In the majority of cases I have dealt with, that has been the position.
“Where disputes do arise, enforcement of restrictive covenants can be considered by the courts and, depending on the specific facts of the case and the remedy being sought, the court will look at all of the surrounding circumstances before reaching a decision.
“There are also, in some situations, options for property owners to apply to the Upper Tribunal (Lands Chamber) to modify or discharge restrictive covenants.
“However, that process would not assist where the issue relates to the creation of new covenants.”
Ellis continued: “Sadly, this is often another example of purchasers not fully considering the paperwork associated with a property purchase, or not acting on the advice they have received during the conveyancing process.
“While a buyer’s negotiating position can be limited once they are committed to a transaction, there is always the option to walk away from a purchase if restrictive covenants are considered unacceptable.
“That is a course of action that is often advised but, in practice, less frequently taken.”
