Modification of Restrictive Covenants – Section 84 Law of Property Act 1925
What are restrictive covenants?
Restrictive covenants often restrict development of land without the prior approval of the plans by the owner of the land with the benefit of the covenant.
What is a developer to do where a development is hampered by restrictive covenants that would appear to be an obstacle to their development plans and the person with the benefit of the covenant is making clear they intend to rest on their legal rights and refuse consent?
Ignore them and press on with the development.
Sometimes this may work as the offended party may not have the resolve to enforce his legal rights. However, the owner of land with the benefit of the covenant could apply for an interim injunction resulting in the works being brought to a halt. The law is set out in Bean: Injunctions at pp 30-38:
“Restrictive covenants between neighbours continue to be treated as prima facie enforceable by interim injunctions as the balance of convenience will normally fall in favour of preventing nuisance or interference with property rights.”
If granted an interim injunction could result in your builders being dismissed from site which could be both expensive and disruptive.
If the matter proceeded to trial, on the grounds that refusal of consent was unreasonable, the developer’s position may not be much stronger. Francis: Restrictive Covenants and Freehold land puts it his way:
“The question of whether refusal [to give consent] has been reasonable or not, will be a question of fact. The burden of proving unreasonableness will be on the party so alleging.”
Also the court will look at the issue of reasonableness from a narrow contractual perspective, which strongly favours enforcement of restrictive covenants. See for example Margerison V Bates & Another (2008).
In most cases if the owner with the benefit of restrictive covenants will not consent, the better approach will be to apply to the Upper Chamber of the Lands Tribunal under Section 84 of the Law of Property Act 1925 to modify or discharge the covenant to permit the proposed development.
Under section 84, The Upper Chamber of the Lands Tribunal can discharge or modify the restriction if satisfied that one of the following grounds applies:
- The covenant is obsolete (section 84(1)(a), LPA 1925).
- The covenant impedes some reasonable use of the land (section 84(1)(aa), LPA 1925).
- The beneficiaries expressly or impliedly agree (section 84(1)(b), LPA 1925).
- No injury will be caused (section 84(1)(c), LPA 1925).
When considering whether the restrictive covenants impede some reasonable use of the land, the Tribunal will take in to account the Local Development plan.
Consequently, whilst the existence of an extant planning consent will not ensure success before the Tribunal, it is prima facie evidence that the proposed use of the land is reasonable. The fact that the Tribunal is permitted, under section 84, to take in to account wider planning concerns, means this should always be considered as a preferable forum to test the issue of reasonableness of restrictive covenants.
Testing the issue of reasonableness of restrictive covenants in the courts will result in a much narrower contractual approach being taken, so that the likelihood of a favourable outcome will be that much lower.
If you have restrictive covenants you would like assistance with or would like to discuss these issues further, then please contact Ken McEwan on 0117 906 9400 or email him at firstname.lastname@example.org .