Restrictive covenants – identifying the land which benefits from a covenant is key to its enforceability

Key point

• In an application to modify or discharge a restrictive covenant, only the advantage secured by the covenant to the benefiting land will be relevant

Perkins v McIver

In the July 2011 edition of Property Update, we considered the decision of the Upper Tribunal in Re Perkins to refuse a developer's application to modify a restrictive covenant. The developer was seeking to build a second house on a plot that was burdened by a covenant not to build more than one dwellinghouse. The site comprised a corner plot on a small suburban square which had central communal gardens. The developer appealed, and the case (now known as Perkins v McIver) has recently been heard by the Court of Appeal.

One of the main grounds for the tribunal's decision was the disturbance that would be caused during construction works. The roads around the square were narrow and would not easily accommodate construction vehicles. The tribunal held that while the primary consideration was the value of the covenant in providing protection from the effects of the ultimate use of the land (i.e. as a plot with two houses), the facts of the case were exceptional in terms of potential disturbance during the construction period.

Decision of the Court of Appeal

The developer pointed out that the disturbance identified by the Upper Tribunal was to parked cars, roadways, verges and planting on the square. This was not disturbance caused by construction operations on the development site itself (which was the land burdened by the covenant), but on the public highway leading to it.

The Court of Appeal accepted that increased traffic to and from a site was capable of being relevant for the purpose of an objection to a modification of a restrictive covenant. However, it ruled that the focus of such an objection must be the impact of any disturbance on those whose land has the benefit of the covenant. In this case, the land affected was the square itself, and no objection had been raised by the owners of the square.

Things to consider

In last month's Property Update we reported on the case of Re Stanborough. In that case the court confirmed that the only benefits secured by a covenant which can be taken into account are those which are attributable to land which has the benefit of the covenant.

In Perkins v McIver, the land with the benefit of the covenant comprised a number of houses around the square. However, the alleged disturbance would affect the square itself, which did not have the benefit of the covenant.

These cases emphasise the importance of clearly identifying which land has the benefit of a covenant, and examining carefully whether the alleged benefits do indeed benefit that land. If not, the covenant will be unenforceable.

The above analysis was written by Sarah Dawe, associate in Wragge & Co's Real Estate group.

Wragge & Co's real estate specialists provide an analysis of the latest developments in car parking easements, development, land registration, contract, Green Deal, planning and tenant insolvency.