Restrictive covenants prohibit certain uses of land or property. This can lead to unwanted costs and delays or can thwart development altogether.
If a covenant restricting development is breached, the developer could be ordered to pay damages to the beneficiary of the covenant, or, in some cases, demolish the development altogether. To avoid the risk of enforcement the following options may be considered:
- Modification or release by agreement - if the beneficiary of the covenant can be identified and located, and as a preliminary step before making an application to the Upper Tribunal, agreement might be sought and / or negotiated with the owner of the benefitting land.
- Application to the Upper Tribunal for modification or discharge - under section 84 of Law of Property Act 1925 (LPA) a landowner can apply to modify or discharge a restrictive covenant if one or more of the following apply:
- the covenant is obsolete;
- the covenant impedes some reasonable use of the land (or would unless modified);
- the beneficiary under the covenant has agreed to its modification or withdrawal; or
- the proposed modification or discharge would not injure the beneficiary.
- Indemnity insurance - where a restrictive covenant is historic, landowners often turn to indemnity insurance to protect against the risk of the beneficiary enforcing the covenant. In order to pursue this option, it is imperative that no contact is made with the benefitting owner nor any application made to the Upper Tribunal under s84 LPA.
Lessons from Jackson & Ors v Roselease
In the recent decision of Martin Andrew Jackson & Ors v Roselease Ltd  UKUT 273 (LC), the applicant sought modification of restrictive covenants to enable a residential development of a barn and outbuildings. The grounds for the application were that it would not cause injury to the objector (Ground (c)) and that the proposed use was reasonable and would be impeded by the covenant (Ground (aa)).
The development land was in the green belt and the proposed development was permitted development under the Town and Country Planning (General Permitted Development) (England) Order 2015 Sch 2 Pt 3 para Q. The 2015 Order allowed development which would not otherwise be permitted in the green belt. There was no planning permission, and without the 2015 Order planning permission would not have been granted.
Also relevant was the fact that in 2016 the objector had been amenable to the development of the barn and outbuildings which had been proposed by the applicant’s predecessor in title. Indeed, the objector (a property developer) had offered to undertake the work at that time.
The applicant succeeded under both Grounds. The development caused no injury (Ground (c)) because it would be barely visible to the objector and in any event would be an improvement (the current buildings were dilapidated), further there was no evidence that the development would cause loss of amenity nor loss of value to the objector. A potential loss of amenity in respect of a nearby public footpath was irrelevant. The question for Ground (c) is whether there is injury to the objector, not the public at large.
Ground (aa) was also made out. Although there was no planning permission (ordinarily a key component in succeeding under Ground (aa)) the development was permitted under the 2015 Order. Therefore, the absence of planning permission in this case was not a bar to evidencing the reasonableness of the proposed use. No compensation was payable to the objector as the restriction was not found to confer any practical benefit or enhancement and no loss was suffered.
This decision reinforces that the absence of planning permission is not fatal to a finding of reasonableness in circumstances where permitted development rights have been acquired. It also serves as a useful reminder that any injury of loss of amenity claimed must be relevant to the objector (and the objector’s land) and not to the public at large. The decision appears to support a trend in the Tribunal’s willingness to use s84 LPA to its full effect and serves to reiterate that it is easier to persuade the Tribunal to modify a covenant than to discharge a covenant completely.
If you require further information about anything covered in this briefing note, please contact Siobhan Jones, or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, December 2019