Restrictive covenants - discharge of modification under s.84 of Law of Property Act 1925
The Applicants were the freehold owners of a detached bungalow known as Walnut Acre ("the application land"). The application land was subject to restrictive covenants imposed in 1997 for the benefit of a neighbouring property known as Highlands ("the restrictions").
The restrictions prevented the Applicants from erecting anything more than a one storey bungalow on the application land without approval of the transferees (or their successors-in-title), such consent not to be unreasonably withheld.
The Applicants bought the application land in October 2012, with planning permission to demolish the existing bungalow and erect a two-storey dwelling ("the proposed development").
The Applicants sought to discharge or modify the restrictions under grounds (a) and (aa) of section 84 LPA 1925. The owners of Highlands objected to the application.
- Whether the restrictions should be discharged, or modified in the alternative, on ground (a) set out in s84(1) LPA 1925, i.e. on the basis that they ought to be deemed obsolete.
- Whether the restrictions should be discharged, or modified in the alternative, on ground (aa) set out in s84(1) LPA 1925, i.e. on the basis that they impede a reasonable user of land. (Under s84(1A), discharge or modification is permitted where the Upper Tribunal is satisfied that: (a) the person who is entitled to the benefit of the restriction does not secure any practical benefits of substantial value or advantage from it; or (b) that the restriction is contrary to the public interest. For the purposes of section 84(1A), consideration also has to be given as to whether money is adequate for the loss or disadvantage to the beneficiary as a result of the discharge/modification of the restriction.)
- The original covenantee had insisted upon the restrictions so that any development on the application land would not affect the spacious feel of the garden at Highlands and so that Highlands would not become overlooked. The restrictions continued to fulfil a major part of this original purpose and ought not to be deemed obsolete. The application therefore failed on ground (a).
- The application failed on ground (aa) also. The Tribunal accepted that the proposed two-storey house would be reasonable use and that this was impeded by the restrictions. (The fact that the application land could still be used reasonably by erecting a single-storey house was regarded as irrelevant since the "reasonable user" referred to in ground (aa) is intended to cover the proposed use rather than the existing use.) However, the restrictions were found to confer practical benefits of substantial value or advantage on the objectors, as they prevented the construction of a significantly larger structure which could interfere with the objectors' enjoyment of Highlands. The Tribunal pointed out that, although there had been some increase in residential density in the area and a trend away from bungalows to larger houses, the basic character of the neighbourhood had not changed: "The setting of Highlands is sylvan, peaceful and not dominated by adjoining dwellings."
The Tribunal noted that the planning authority had accepted that the amenity of Highlands would not be adversely affected by the Applicant's proposed development. However, it pointed out that this was not decisive in this context:
"...this is not a planning application but an application to discharge or modify restrictions which afford proprietary protection to the objectors' amenity and that of their successors. What matters is the effect of the persons with the benefit of the restrictions and a test of amenity is not one determined by planning policy."
The Tribunal rejected the Applicants' contention that the restrictions were contrary to the public interest because of the increasing need to maximise the use of available land.
It highlighted that public interest arguments require an interest which "is so important and so immediate as to justify the serious inference with private rights and the sanctity of contract". (Re Collins' Application  30 P&CR 527 applied).
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