A great deal of land in this country is subject to restrictive covenants i.e. someone other than the owner of the land has a “right of veto” over the land’s use or the land being put to some specific use.
Many of these covenants have been on the land for a considerable amount of time and may have become in the view of some, archaic.
The law recognises this by allowing owners of land subject to restrictive covenants to apply to the Upper Tribunal Lands Chamber (formerly known as the Lands Tribunal) to discharge or modify any restrictive covenant. The owner of the land must establish one of the four possible grounds set out in the Law of Property Act 1925 (Section 84) and they are as follows:-
• The land or the surrounding land or other circumstances have now rendered the restriction obsolete.
• The unmodified restriction impedes some reasonable use of the land for public or private purposes.
• The holder of the covenant has agreed either expressly or by implication to the covenant being discharged or modified.
• The discharge or modification will not injure the persons entitled to the benefit of the restriction.
The classic scenario in which this type of dispute arises is when land has been bought with a view to development but some person or persons hold a restrictive covenant to prevent building.
Traditionally, developers have been fairly robust in the face of these covenants and simply continued with the development with a view to “buying off” any covenant holders who seek to enforce their covenant.
However, in a recent case a well known land developer has failed to have a restriction removed. The developer started to build the development in breach of the covenant. When the covenant holders issued injunction proceedings to prevent construction, the developer responded by applying and to the Upper Tribunal and having the injunction proceedings stayed pending the decision of the Upper Tribunal.
The Upper Tribunal found that the development would change the land from semi-rural to suburban, causing the covenant holders a loss of view and amenity and a diminution in the value of their property by at least 15% and therefore the Upper Tribunal was not prepared to modify or remove the restriction. Another interesting point is that the Upper Tribunal commented that even had they been minded to remove the restriction they would not have in this case because of the conduct of the developer. The developer ought not to have begun his development before making the necessary application.
Accordingly, this is a stark warning to those who feel that they could simply keep building in the face of a restrictive covenant. In the case of smaller developments it is of course sometimes possible to obtain insurance against the enforcement of restrictive covenants and this is a possibility to be considered, especially where it has not been possible to contact the covenant holder. However, clearly it would be ill advised to begin any such development without taking full cognisance of any restrictive covenant.
If you wish to discuss this or any other matter please do not hesitate to contact Robert Anderson on 0113 245 0733.
