Owner of listed building able to operate B&B business

Where a building is listed, the planning system can fulfil the same function as a restrictive covenant seeking to prevent significant change. The Upper Tribunal (Lands Chamber) considered an application under section 84(1) of the Law of Property Act 1925 in Kay v Cunningham and another [2023] UKUT 251 (LC). The case concerned Lea Hurst in Holloway, Derbyshire, the former home of Florence Nightingale and a substantial Grade II listed property within an estate of 19 acres. Peter Kay acquired the property in 2011 and renovated it. He decided to let rooms in the house on a bed-and-breakfast basis to defray the annual upkeep of the property of around £50,000. Such use breached a covenant imposed in a 2005 transfer in favour of Lamp Cottage, formerly part of the estate, “not to use Lea Hurst other than a single private residence”. Kay applied to modify the covenant on grounds (a), (aa) and (c) of section 84(1) to allow the business to continue. He intended to use no more than five rooms and to run the business himself with his wife. He wanted to feel like the house was their family home. Joanne Cunningham and Barry Nix, the owners of Lamp Cottage, objected to all grounds. The tribunal decided that there were no changes to the character of the neighbourhood which rendered the covenant obsolete. Use of the property as a bed and breakfast was allowed under permitted development rights – which indicated that it was a minor alteration – and was reasonable. The likelihood of the occupants of Lamp Cottage being disturbed by guests at Lea Hurst was negligible. The properties were 75 metres apart and their gardens separated by another property, the Coach House, two boundary walls and planting. The owners of the Coach House had given tacit approval to the modification. The modification would not alter the built environment so it was difficult to see how the objectors’ ambience would be affected. As for their ability to control the use of Lea Hurst, the listed status of the property placed strict limits on the use of the house and wider estate which rendered the protection of the covenant less important than it would otherwise be. The practical benefits of the covenant were not substantial in value or advantage. Grounds (aa) and (c) were made out and the tribunal exercised its discretion to grant the modification, with guest access restricted to a driveway away from Lamp Cottage. There was no credible evidence that modifying the covenant as sought would have an impact on the objectors’ interests. Louise Clark is a property law consultant and mediator