When it comes to real estate, the concept of restrictive covenants plays a significant role in shaping land use and property development. These legally binding promises between landowners can have a lasting impact on what can and cannot be done with a piece of land. In this comprehensive guide, we will delve into the essential aspects of restrictive covenants, including what makes them enforceable and the processes involved in modifying or discharging them.

Understanding Restrictive Covenants

A restrictive covenant, in essence, is a commitment made by one landowner to another, prohibiting certain activities or actions on their property. Common examples include promises not to build more than one dwelling on a specific plot of land. However, not all promises between landowners qualify as restrictive covenants. To be enforceable, several key criteria must be met.

Enforceability of Restrictive Covenants

Restrictive Nature: The first and foremost criterion is that the covenant must genuinely restrict the use of the land in question. This requirement focuses on the substance of the words used in the covenant rather than its precise wording. For example, a covenant stating "not to build more than one dwellinghouse on the land" qualifies as a restrictive covenant. Conversely, a covenant demanding that the landowner "not allow the house to fall into disrepair" does not meet the restrictive criteria, as it necessitates action rather than restriction.

Registration: To be enforceable, the covenant must be registered. In cases involving registered land, the covenant should be registered via a notice in the Charges register of the registered title.

Identification of Benefitted Land: It is crucial to identify the land that benefits from the covenant. The covenant must provide some benefit to the land, and this benefit must be easily identifiable. The wording of the covenant must "touch and concern" the land, meaning that any breach of the covenant should adversely affect the value or amenity of the land. While it is not mandatory for the land to be explicitly defined in the relevant conveyance documentation, it must be easily identifiable. For a covenant to be valid, there must be a specific area of land that benefits from it, as well as a corresponding area of land burdened by the covenant.

Applications to the Upper Tribunal

Landowners burdened by a restrictive covenant have the option to seek modifications or discharges through the Upper Tribunal (Lands Chamber). This legal avenue is governed by Section 84(1) of the Law of Property Act 1925, which outlines specific conditions that must be met for a successful application.

Grounds for Modification or Discharge

Section 84(1)(a): This provision allows for modification or discharge if changes in the character of the property or the neighbourhood, or other circumstances of the case, render the restriction obsolete or unachievable in its original purpose.

Section 84(1)(aa): This section, added by the Law of Property Act 1969, provides grounds for modification or discharge when:

• The continued existence of the covenant obstructs reasonable land use.
• The covenant does not offer substantial practical benefits to those with the benefit of the covenant or is against the public interest.
• Compensation in monetary terms would suffice to compensate for the loss or disadvantage if the covenant is modified or discharged.

Section 84(1)(b): Modification or discharge can also be sought if the person with the benefit of the restriction agrees to such a change.

Section 84(1)(c): The proposed modification or discharge should not cause injury to the person with the benefit of the restriction.

Restrictive covenants are essential elements in property law, regulating land use and development. To be enforceable, they must meet specific criteria, including their restrictive nature and proper registration. Landowners burdened by these covenants can seek modifications or discharges through the legal process outlined by Section 84(1) of the Law of Property Act 1925, under various grounds depending on the circumstances. Understanding these aspects is crucial for anyone involved in property transactions or real estate development.

Whether you are enforcing, challenging, or working with restrictive covenants, our Property Litigation teams have a wealth of experience that can help you simplify this complex system.

To find out more about what we can do to help, get in touch.