20 June, 2019
A restrictive covenant over land is a contract which runs with the land, and prevents that owner from doing certain things (usually relating to development or use).
Aside from agreement between the parties, the only way to release or modify a covenant is to apply to the lands tribunal under section 84 of the Law of Property Act 1925. The lands tribunal can remove or modify a covenant if it is obsolete or is contrary to the public interest.
Millgate, a housing developer, built affordable housing on land which was burdened by a restrictive covenant preventing any development. The neighbouring children's hospice held the benefit of the covenant. After practical completion, Millgate applied to the lands tribunal to modify the covenant, allowing the development to stand.
Millgate argued that the area was in need of affordable housing and that is was contrary to the public interest to force the demolition of the houses. Money was adequate to compensate the hospice.
The children's hospice argued that the terminally ill children needed peace and quiet and a nice view. Their outside space had been designed with that in mind.
The lands tribunal found that, while Millgate acted terribly, the public interest in affordable housing was stronger than the hospice's need for peace and quiet.
On appeal to the Court of Appeal this was overturned and the hospice won. The public interest was served by developers seeking to modify the covenant before carrying out building works.
The Upper Tribunal's power to release or modify a restrictive covenant is discretionary. If you want the tribunal's assistance you should apply long before a spade hits the ground.
Not all restrictive covenants are enforceable, so the first step is to take expert legal advice.
For more information contact Stephen McArdle in our Business Dispute Resolution department via email or phone on 0333 207 1142. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
Learn more about our Business Dispute Resolution department here