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4th March 2011

Restrictive Covenants – Whose Consent is Needed?

4th March 2011

Restrictive Covenants – Whose Consent is Needed?

Mark Withers

Posted: 4th March 2011

T: 023 8048 2274

E: Email Me

There have been a string of cases reported over the last few years concerning the interpretation of restrictive covenants which require the consent of third parties before development or other specified works are undertaken. The cases hinge on determining whether the consent required is specific to the original seller. Where it is and the seller (in the case of a company) has ceased to exist or (in the case of an individual) has died, the restrictive covenants will, in effect, fall away.

The High Court concluded in Crest Nicholson v McAllister that compliance with a restrictive covenant required the consent of a specific company (as opposed to successors in title).  The company in question had been dissolved and  the covenant was consequently deemed to have been discharged.

By contrast the case of Mahon v Sims concerned a covenant which was expressed to “benefit and protect the Transferors property”.  The covenant was construed so as to benefit successors in title and the consent of those successors was therefore required in order to comply with the terms of the covenant.

The High Court recently considered the meaning of “Vendor” and whether that term extended to successors in the case of Churchill v Templar and Others. In the absence of any express provision in the contract extending the definition of the term to successors, the restrictive covenant was interpreted literally (and restrictively) so as to require approval to development by only the original sellers. The parties in question had since died and the covenant was therefore deemed to have been discharged.

This most recent case emphasises the importance of drafting restrictive covenants carefully when seeking to police or regulate future use of land. It also highlights the importance for subsequent and prospective owners to scrutinise historic covenants to ascertain whether, as is often the case, there are means available to circumvent them.

If you require any further information in relation to the points raised in this Blog or wish to discuss any of the issues contained within it please contact Mark Withers at mark.withers@parissmith.co.uk

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Mark Withers

Posted: 4th March 2011

T: 023 8048 2274

E: Email Me