Mark Withers | 22nd January 2019

The danger of not taking restrictive covenants seriously

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Mark Withers | 22nd January 2019

The danger of not taking restrictive covenants seriously


In our blog posted in January 2017 we reported on the decision of the Upper Tribunal regarding an application to modify restrictive covenants which prohibited land being used for any purpose other than the parking of vehicles.

The Upper Tribunal concluded public interest outweighed all other factors and it wouldn’t be sensible to allow the restrictive covenants to be enforced (given the result would be the social housing which had been built would remain empty).

The party with the benefit of the restrictive covenants appealed the decision to the Court of Appeal.

In applying the ‘public interest’ test, the court had to consider whether reasonable effort had been made to vary the covenants or to otherwise devise a scheme which complied with a restrictive covenant.

The court considered the arguments put forward by the parties and concluded that a strict application of section 84 (and the circumstances in which restrictive covenants might be varied) was required.

The assessment of what the Upper Tribunal considered to be in the public interest was, in the view of the Court of Appeal, flawed. The grant of planning permission of itself did not mean the development was necessarily in the public interest (as required in order to achieve a variation of covenants pursuant to section 84) and the modification of the restrictive covenants which had been sought by Millgate was refused.

The outcome of this case serves as a stark warning to any developer carrying out development in breach of restrictive covenants and it may well be that the units which have been constructed in breach of the restrictive covenant (some 13 in total) may need to be demolished.

If you wish to discuss any of the issues raised in this blog please contact me.