The recent case of Martin v Lipton has illustrated that it could be justifiable to allow an application to modify an existing restrictive covenant prohibiting further development of a residential property situated on an established housing estate, but that this should not be allowed without payment of due compensation to any objectors and compliance with strict conditions.
What are Restrictive Covenants?
Restrictive covenants are binding conditions that are written into a property’s deeds or contract by a seller to determine what a homeowner can or cannot do with their house or land under particular circumstances.
They can cover a wide spectrum of issues, but most commonly include:
- restricting or preventing owners from making alterations to a property (such as building a conservatory, garage or extension or converting a house into multiple flats, for example);
- restricting or preventing buildings or other substantial structures (such as home offices, annexes etc) from being erected on a section of land; or
- restricting or preventing trades or businesses from operating on the land.
However, it can sometimes be difficult to know the full extent of any restrictive covenants unless it is expressly stated in the document which imposes such restrictions. Should a deed or document that imposes such restrictions be missing or unable to be located, it can often cause developers and homeowners alike a headache and is not without its pitfalls.
Martin v Lipton
This case related to a dispute between Mr Martin (M) who owns ‘Oak house’ situated on the Oakfield Estate in Surrey and various neighbouring property owners collectively known as Lipton and others (L). The case analysed whether M could apply to the Upper Tribunal to make an order to modify an existing restrictive covenant which burdened M’s land to the benefit of L, in order to allow the further development of one detached dwelling to be erected in the garden of M’s land, which was strictly prohibited by the existing restrictive covenant.
M’s house was one of 44 properties situated on the residential Oakfield Estate which was laid out in 1928 and developed in the following years. Its original form had largely been preserved by restrictive covenants requiring that not more than one dwelling house be erected on each plot situated on the Oakfield Estate.
M, the applicant, wished to build a detached two-storey house in its garden, while retaining the existing dwelling. Planning permission for the new house was originally granted on 13 December 2017. A second planning permission was granted on 18 July 2018 for a house of the same size and layout but with a modified façade to tie in with the appearance of the estate.
L, the objectors, were all owners of other houses on the estate making up 26 persons in total each of whom was entitled to the benefit of the restriction imposed on the first sale of each property, which prohibited the building of more than one house on any plot situated on the Oakfield Estate.
Upper Tribunal Ruling
The court stated that M’s further development plans should be allowed despite the existing restriction being in place, and that by allowing such further development in the circumstances it would not interfere with L’s use and enjoyment of their own properties on the estate.
The court was clear in that the building of an additional house in the garden grounds of Oak House was a reasonable use of that land and was becoming quite common practice in more recent times, and that such development was impeded by the existing restriction. The court was however mindful of L’s concerns, namely the long-term impacts on surrounding views from their own properties, the protection of natural greenery and habitat, maintaining the existing character of the estate and overcrowding of properties to name a few.
The decision was granted in favour of M but only subject to strict modification of the existing restriction by the courts and with development conditions attached further to those already laid down by the Local Authority in the Planning Permission, to ensure that the restriction still purported to protect and benefit L as far as was practicably possible.
The courts also required M to make compensation payments to those objectors living in properties within a close proximity to Oak House for short term disruption caused by such further building works.
Modifications: Application under Section 84(1) Law of Property Act 1925
This recent case law has paved the way for further Section 84(1) applications to be made where existing restrictions might be outdated or no longer fit for modern purpose and use rendering them in need of modification.
Although this case relates directly to development of property, it is clear that modifying restrictive covenants of any nature or kind is possible if deemed reasonable in the circumstances by the courts, which will of course be determined on a case-by-case basis.
Care must be taken when making applications to modify an existing restriction, as they are not without their pitfalls and will often come up against much objection, especially where such restrictions benefit neighbouring and nearby properties whom will no doubt be keen to keep the ‘status quo’ and rely on the benefit of existing restrictions.
Prior to buying a property which is burdened by an existing restriction or restrictive covenant, or prior to applying to the courts to modify an existing restriction, it is highly recommended you seek legal advice on the impact these restrictions and covenants may have on your ownership or future plans of the property.
Get in touch
Luke Smith is a Solicitor in our Commercial Property team. If you require any advice in relation to the topic discussed in this article, please contact Luke or another member of the team on 0115 910 0600 or via the online form.