Tribunal Refuses Application to Discharge Restrictive Covenant Because of Practical Benefits

The case concerned a proposal to demolish four suburban houses and replace them with a block of 33 flats, standing up to five storeys high. Given the acute need for more new homes, planning permission was granted for the project.

Standing in the developer’s way, however, were restrictive covenants enshrined in the title deeds of three of the houses. One of them, dated 1963, forbade construction of more than one detached house on one of the plots. Another, dated 1993, required that two of the properties only be occupied by single households.

The developer applied to the Upper Tribunal (UT) under the Law of Property Act 1925 to modify the covenants so as to permit implementation of the planning permission. However, fierce objections were raised by neighbouring property owners who it was accepted enjoyed the benefit of the covenants.

The company argued that any diminution in the value of the objectors’ properties arising from the development would be modest and offered them a total of about £33,000 in compensation. The objectors, however, argued that the construction of the block would devalue their homes by 10-15 per cent, or a total of more than £380,000.

Ruling on the matter, the UT noted that, planning permission having been granted, it was difficult not to regard the development as a reasonable use of the relevant land. It was not in dispute that the covenants impeded that use. The crucial question was whether the covenants continued to secure practical benefits of substantial value or advantage to the objectors.

In ruling that it had no discretion to modify the covenants, the UT found that one objector’s property would be significantly overlooked by the proposed block. The very large and overbearing building would transform the outlook from that property, dominating views of the western sky. It would also be visible from the second-floor office and garden of another objector’s home.

Quantum (Barrowsfield) Limited v Bell & Ors.