Take restrictive covenants seriously

Jun 4 2008 by Graeme King, The Journal

Richard Freeman-Wallace is head of property at Watson Burton LLP

OLD laws may still restrict new uses for land, however outmoded the legislation appears. Some restrictive covenants created well over 100 years ago have the power to stop new housing going ahead.

The defendants in Turner and another v Pryce and others (2008) would ruefully agree. They are neighbours on a Birmingham estate who decided to band together to develop the plots behind their properties by building three new houses for which they had obtained planning permission.

Objections were raised, however, by the people who lived across the road from the proposed new houses. They were aware that restrictive covenants from 1890 prohibited each plot from having more than one or two dwellings on it and prescribed a building line 12ft from the footpath.

Once the defendants started building, the claimants applied for an injunction. The court agreed with the claimants that the restrictive covenants were still valid. Despite their venerable age, the covenants were as applicable today as they were when first put in place.

The defendants argued that the covenants were obsolete due to changes in the character of the neighbourhood, but that was also rejected. They also pointed to other significant breaches of the covenants in the neighbourhood, carried out many years ago, but the court decided that such examples did not preclude the claimants from being able to enforce the covenants in 2007.

The court granted the claimants a permanent injunction and the defendants had to stop building the three houses they had planned.

Restrictive covenants have to be taken seriously. However historic they appear, the court will not look favourably on developers driving forward schemes when they are aware of their existence. Turner v Pryce means the outcome of such activity could be seen by some judges as being cavalier.

The court in the Turner v Pryce case told the defendants they would have been better advised if they had applied to the Lands Tribunal for the covenants to be released or modified. The High Court, unfortunately for the defendants, had no jurisdiction to do so.

There is one area in which restrictive covenants may soon come to an end. The Government is considering removing restrictive covenants on land that has been compulsorily purchased, because such covenants can seriously hamper regeneration projects planned for the land.

Consultations were completed in October 2007 on the Government’s proposals to strengthen section 237 of the Town and Country Planning Act 1990.

The moves to remove restrictive covenants on compulsorily-purchased land are beneficial for developers, as much more land should become available for development.

The changes are likely to be added to the forthcoming Planning Bill.

The ongoing power of restrictive covenants, however, requires serious thought by those intending to buy or build on land that includes covenants. Their interpretation has to be considered carefully to avoid costly disputes.

Restrictive covenants from 1890 prohibited each plot from having more than one or two dwellings