Where development is proposed in breach of restrictive covenants, the covenants themselves will be scrutinised in detail and endeavours will be made to establish the extent of the land which has the benefit of the covenants.
Where the restrictive covenant impedes the proposed development and an express release of the covenant isn’t or can’t be sought, an application can be made to the Land Tribunal to modify or discharge the covenant.
The grounds on which an application can be made include situations where the restrictions impede the reasonable use of land provided the covenant doesn’t secure a practical benefit. This provision (enshrined in Section 84(1)(aa) of the Law of Property Act 1925) was considered in the recent case of Copleston’s application. That case involved two land owners who sought to modify or discharge a restrictive covenant to enable the construction of a new house within a garden.
The Tribunal concluded that the proposed use was reasonable in regard to the nature of the area within which the property was situated.
The Tribunal then had to consider whether the covenant secured a practical benefit of substantial value or advantage (i.e. would someone be prejudiced if the covenant were discharged or varied). In reaching a decision on this point, the Tribunal looked at the land which expressly benefitted from the covenant. The land in question was, in fact, a further garden which formed part of a larger property with a house upon it. The house itself was not on land with the benefit of the covenant. The Tribunal took the view that when considering practical benefit it was appropriate to take into account the entirety of the landholding of the party with the benefit of the covenant (not simply the land which, on a strict analysis, had the benefit of the covenant).
Taking into account all of the land which the impact of the covenant needed to be considered in relation to, the Tribunal formed the view that it did secure a benefit and as such it wasn’t able to vary or discharge the covenant pursuant to section 84(1)(aa).
This decision was obviously decided by reference to the particular circumstances of the case. It does, however, have significant ramifications on any party considering the possibility of developing land where restrictive covenants apply and the implications of this decision will need to be taken into account in relation to any development affected by restrictive covenants.
You may also be interested to read our blog “Discharge before you develop“.
If you have any queries concerning the issues raised in this blog, please email me : email@example.com.