A buyer's lawyer discovers a restrictive covenant on the Certificate of Title stating 'No commercial businesses shall operate on this property.' The buyer intends to open a home-based accounting practice. How does this covenant affect their plans?

Question: A buyer's lawyer discovers a restrictive covenant on the Certificate of Title stating 'No commercial businesses shall operate on this property.' The buyer intends to open a home-based accounting practice. How does this covenant affect their plans?

Answer options:

• It has no bearing, as a home-based business is typically exempt from such broad covenants.
• The buyer must obtain a waiver from all neighbours within a 1 km radius to operate their business. ✅ Operating the accounting practice would likely be a breach of the restrictive covenant, potentially leading to legal challenges from neighbours who benefit from the covenant.
• The covenant only applies to large-scale industrial businesses, not small home offices.

Correct answer: Operating the accounting practice would likely be a breach of the restrictive covenant, potentially leading to legal challenges from neighbours who benefit from the covenant.

Explanation: Restrictive covenants are legally binding and restrict specific uses of land. Unless the covenant explicitly permits home-based businesses, or there's a specific legal interpretation or waiver, operating a commercial business, even a home-based one, would likely be a breach, enforceable by affected neighbours.