If your property development is being affected by restrictive covenants, taking action to deal with them early can allow you to explore a number of potential solutions, allowing your development to proceed swiftly and without delay.
What is a restrictive covenant on land?
A restrictive covenant, in simple terms, is a restriction on land that states what an owner can and cannot do with it. Essentially, a restrictive covenant burdens the land it restricts.
To be enforceable against a successor in title to the original covenantor, there must be land which has been given the benefit of the restrictive covenant.
If you breach the restrictive covenant, the owner of the land, with the benefit of the covenant, may be able to stop you from building out your development and make a claim against you for damages.
How do you know if your development land is affected by a restrictive covenant?
The legal title to the property should show the restrictive covenants that affect your development land.
If you are unsure as to how to check your legal title, a solicitor from our expert Commercial Property team will be able to assist.
What type of restrictive covenants can affect the development of land?
There are many different restrictive covenants that affect land, common examples include:
- Not to use the land other than private garden land.
- Not to use the land other than for a private residential dwelling.
- No building or other structure shall be erected on the Property without the previous written consent of the Vendors and in accordance with the plans and elevations and specifications which shall be approved by the Vendors.
What if your development is in breach of the covenants?
As mentioned, taking action early is the best course of action and a recent case highlights this. The case of The Alexander Devine Children’s Cancer Trust v Millgate Developments Ltd and others [2018] EWCA Civ 2679 (LC) highlights the dangers of ignoring and deliberately breaching a restrictive covenant without following the necessary procedure.
The developer (Millagate) in this case, obtained planning permission and built residential dwellings on its development site. Part of the site was burdened by a restrictive covenant which prohibited the land from being used for building or for any purpose other than as a car park.
The developer was aware of the covenant, but ignored it and carried out the development.
The Trust, which had the benefit of the covenant, was initially unaware that it had the benefit of the restrictive covenants and did not object to the planning permission.
Once the developer obtained planning permission, it commenced work. The Trust, on becoming aware of the restrictive covenant, objected to the works on the basis that it had the benefit of the restrictive covenant, but the developer did not stop the works.
The developer then made an application to the Upper Tribunal for the covenant to be modified on the ground that the covenant impeded reasonable use of the land (as it had obtained planning permission).
At first, the Tribunal allowed for modification, but the Trust took the case to the Court of Appeal. The Court of Appeal decided that, because the developer had deliberately acted in breach of the restrictive covenant, it should not be modified.
This case highlights the risk of developing a site in breach of a restrictive covenant, even if the party with the benefit of the covenant did not object to the planning application for the development.
If there is a good case for modification of restrictive covenants, then developers would be well advised to apply to the Upper Tribunal before developing a site, rather than deliberately breaching the restrictive covenant.
How can Nelsons help?
At Nelsons, we have a team of development specialists who can assist you with all your development needs, whether you are a developer or a land owner looking to sell your land for development.
With regards to restrictive covenants, we can check your legal title to check the covenants and other matters which could affect the development potential of your land.
We can check your legal title and provide you with initial advice on restrictive covenant grounds. If you require any further advice on our commercial property services, please contact a member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.