Restrictive covenants: Muskwe & Anor v Cochrane [2023] UKUT 262 (LC)

Modification of covenants under Section 84 of the Law of Property Act 1925 to allow the applicant to use the property as a self-contained home for children in care within their business.

Case name, reference and Bailii link.

Summary

In Muskwe & Anor v Cochrane [2023] UKUT 262 an application was made to modify restrictive covenants under Section 84 of the Law of Property Act 1925 (“Section 84”).

The covenant in question prevented the applicant from implementing planning consent. This planning consent was obtained on 11 December 2020 from Braintree District Council for a change of use of the property from a residential dwelling to a Residential Care Home for up to four children/young persons.

The Tribunal found that:

• Ground (aa) of Section 84 had been satisfied because the proposed use was reasonable and the restriction does not secure the persons entitled to the benefit of it any practical benefit.
• Ground (1A) of Section 84 had been satisfied because impeding the covenant would not secure a benefit of value or advantage to the objector; and
• Ground (c) of Section 84 had been satisfied because the proposed modification would not injure persons entitled to the benefits of the restriction.

Facts

The applicants own a two-storey house within a large residential estate.

The applicants made a planning application for change of use to a residential care home for up to four children/young persons in October 2019. Permission was given on 11 February 2020, subject to the following conditions:

• To start within three years of the decision;
• To carry out the development in accordance with the plans submitted.

After obtaining planning permission, the applicants were able to look after children as an unregulated activity without Ofsted approval. The applicants acted in breach of the covenants from January 2022 to November 2022, where they housed two children. Activity ceased in November 2022 as Ofsted would not approve as the applicants were in breach of the covenants, as this would leave the children vulnerable to disruption from their home at some point.  

Issues

The Tribunal had to decide whether grounds (aa), (1A) and (c) applied in deciding whether to modify the restrictions.

The relevant restrictions to this application are as follows:

According to the 1997 transfer, the property must not be used…

“… other than as a single private residence.”

According to the 2000 transfer, use is prohibited…

“… other than as a single private dwellinghouse with usual outbuildings”.

Neighbours to the property objected to the modification of the covenants on the following grounds:

1. When the property was in operation as a care home during 2022, there were numerous visits from the police and sometimes ambulance staff. A front window had been smashed by a child, and separately an aftershave bottle or perfume bottle was found smashed outside the property. On both occasions glass was scattered across the street. A neighbour claimed that interior damage had been caused to the property, and repairs were made on window blinds multiple times. There was also shouting and banging (which caused disturbance to neighbours) on numerous occasions.
2. Neighbours were worried about the impact the change of use would have on them, particularly during the summer months.
3. Neighbours were also concerned that the value and saleability of their home would be affected.

In reaching its decision, the Tribunal considered the following submissions made by the applicant:

1. Under Section 84(1) Ground (aa) the restrictions impede a reasonable use of the land for private purposes. The applicant argued that the proposed use is reasonable because planning permission was granted, there would be no external changes to the property and it could already accommodate a family with four children so the use was not intensified. The neighbourhood already had a residential care home for children less than 200 meters away.
2. Under Section 84(1A) impeding the proposed use would not secure any practical benefits to those that would benefit from the restrictions and the modification would not cause neighbouring properties to suffer diminution in value or loss of amenity. If there are were practical benefits, they were not of substantial value or advantage and money would be adequate compensation.
3. Under Section 84 Ground (c) the proposed modification would not injure the persons entitled to the benefit of the restrictions. 

First instance (where relevant)

In relation to Section 84, Ground (aa):

• The Tribunal were satisfied that the proposed use was reasonable, and that it was impeded by the restrictions.

In relation to Section 84, Ground (1A):

• The Tribunal were satisfied that impeding the proposed user covenant would not secure a benefit of value or advantage to the objector.

In relation to Section 84, Ground (c):

• The Tribunal were satisfied that this ground was made out because the proposed modification would not injure persons entitled to the benefits of the restriction.

In relation to other matters:

• Under Section 84(1B) the Tribunal found that the planning officer’s report for the planning permissions at the Property, and the expert valuation report’s review of other consents in the area, supported the application.
• The Tribunal took into account the period at which and context in which the restrictions were created and any other material circumstances. The Tribunal did not find that the spirit and intention of those restrictions on creation is offended by the modification.
  
  

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  This article was originally written for Property Law in December 2023 and January 2024 by Emma Humphreys and Emma Preece.