In our August 2017 Bulletin we looked at the modification of restrictive covenants under section 84 of the Law of Property Act 1925 ("LPA 1925") in the context of facilitating social housing: Millgate Developments Limited v Smith [2016] UKUT 515. The present case looks at the issue from a private landowners' perspective and focuses on arguments relating to public interest from a different angle.
Background
The Deans applied to the Tribunal under grounds (aa) and (c) of section 84(1) LPA 1925 for the modification of restrictive covenants burdening their land at their large four bedroomed house in a small estate of eight houses named River View Close in Chilbolton, Hampshire.
Due to an 'unexpected change in their financial circumstances', they wanted to demolish a large indoor swimming pool building attached to their house and replace it with a detached two-storey dwelling house.
The Dispute
Several local people took exception to The Deans' plans. The objections were tinged with acrimony due in large part to the fact that the Deans had sought and gained planning permission for the development despite being aware that there were restrictive covenants. The Deans had previously received a convivial letter from one of the objectors outlining the restrictions. The objectors also believed the Deans to be "opportunistic profiteers" who had sought to build on their plot of land from the outset.
The restrictive covenants, amongst other things, stated that no buildings could be erected other than the original eight buildings at River View Close which would have effectively spelt the end to the Deans' plans, if maintained.
Judgment
Under s. 81(1)(aa) LPA 1925 a restriction may be modified if it hinders reasonable use of the land. Modification will be considered by the Tribunal provided the restriction is not one that: i) gives those with the benefit of the restriction practical benefits, substantial value or advantages; and ii) where the modification would not be contrary to the public interest. Further, s. 81(c) LPA 1925 provides that the proposed discharge should not injure the person with the benefit of the restriction. The first two points were dealt with as follows:
- The Tribunal pointed out that there was already a not unsubstantial building on the site in the form of the pool house. Additionally planning permission had been granted. For the Tribunal it was therefore 'beyond question' that the proposed development was reasonable;
- The Tribunal also found it was without a 'shadow of a doubt' that the restrictions were of no substantial benefit to the objectors. There would be no adverse effect on the objectors' houses and any change in view that would occur was, on the facts, minute, as explained in the expert Surveyor's evidence.
The more interesting question arose from what the Tribunal described as the objectors' 'real concern': that 'lifting the restriction and allowing development' may form the 'thin end of the wedge' and open the floodgates to further developments.
The Tribunal found the objectors' arguments tenuous. A key reason for this was that there had been two previous developments in River View Close which had effectively 'destabilised the integrity of the protection which the restrictions afforded.' An objector had argued that the circumstances surrounding one of the developments varied from the present case, but the Tribunal rejected this. Another objector had allowed a similar building to be built, consequently accepting the sort of change the restriction was designed to prevent.
To allow the application for the Deans' 'inoffensive' development would not form the "thin end of the wedge", because any application would be determined on their own merits and the beneficiaries of restrictions would be able to rely on the principle that allowing an application which does not cause injury to the objectors should not be used in future to support an application that does cause injury.
Comment
The Tribunal confirmed that its attitude towards private matters of this nature would depend on the individual facts presented to them in each case. The objectors' argument was rejected because the Tribunal was of the opinion that the floodgates would not open. The Tribunal would apply a common sense approach to each new case as it arose.
Here common sense was not on the side of the objectors, who effectively objected to something which would have limited, if any, material impact on their lifestyles and which they had approved on another occasion in a very similar format for a different plot.
This article first appeared in our Real Estate Bulletin - January 2018.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
