Restrictive Covenants – what are they and why should you care?

Daniel Edwards, senior solicitor in the property litigation department of Lupton Fawcett's York office.
Daniel Edwards, senior solicitor in the property litigation department of Lupton Fawcett's York office.

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Lupton Fawcett

Restrictive covenants limit the ways a landowner can use their property.

Covenants may, on the face of things, be binding between the parties. But even then they can be varied or removed all together by a court.

This may occur where, for instance, changes to the property and/or the local area render the covenant obsolete, or if the party with the benefit of the covenant has previously agreed to vary or remove it.

It is also possible for the courts to take action where the covenant impedes some “reasonable use” of the land in question. This can only be where the covenant either does not secure a practical and substantial benefit to the person with the benefit of the covenant, or where it is contrary to public interest. In these circumstances, if an award of money would be adequate compensation for the loss suffered, the court may vary or remove the covenant if it deems it suitable to do so.

In a recent court case this discretion was exercised even though:

• The covenant was for the benefit of a hospice for terminally ill children;

• The owner of the adjoining land had knowingly acted with disregard for the terms of the covenant; and

• The hospice suffered very real and significant detriment as a result.

The applicant had constructing 23 “social housing” properties as part of a larger development. This land was immediately next to the hospice and some of the new houses directly overlooked the hospice.  The land which the housing was built on was subject to a restrictive covenant which meant it should not be used for anything other than a car park. 

The developer subsequently applied to court to vary the covenant. The court decided that:

• The covenant did secure a practical and substantial benefit to the hospice, in that it provided them with an increased amount of privacy;

• The covenant was contrary to public interest, given it would prevent the use of 23 social housing properties, at a time where there was a general shortage of such properties; and

• Money was adequate compensation for the disadvantage suffered by the hospice.

The court decided an award of £150,000 was appropriate compensation for the loss suffered by the hospice. This sum would enable them to undertake some “privacy planting” along the boundary of the two parcels of land and still leave them with a surplus of funds. 

Any owner of land that is subject to a restrictive covenant should remember the court will always have a discretion to vary or remove a covenant. There is never certainty that a covenant will be altered or removed upon application. 

Any landowners concerned with issues such as this should contact Daniel Edwards on 01904 561424 or daniel.edwards@luptonfawcett.law.