PP 2010/126

Conveyancers are often asked to advise on the enforceability of restrictive covenants.  Particular problems arise when covenants prohibit a landowner from carrying out work or from engaging in a specified activity without permission or approval where the covenantee has disappeared. Practitioners will need to consider whether: (i) the covenantee imposed the requirement to obtain consent exclusively for its own benefit; or (ii) the requirement was imposed for the benefit of subsequent landowners as well.  If the covenantee reserved the right to grant or withhold consent to itself, has the death or dissolution of the covenantee discharged the covenant, or made development impossible because consent cannot be obtained? The courts will decide each case on its facts and by reference to the specific wording of the covenants in question. In Bell v Norman C Ashton Ltd (1957) 7 P&CR 359 and Re Beechwood Homes Ltd’s application [1994] 2 EGLR 178; [1994] 28 EG 128, the court decided that the covenants had become absolute. By contrast, in Crest Nicholson Residential (South) Ltd v McAllister [2008] 1 All ER 46 and Margerison v Bates [2008] EWHC 1211 (Ch); [2008] 3 EGLR 165, the court ruled that the covenants had been discharged.  At the opposite end of the spectrum, in Mahon v Sims [2005] 3 EGLR 67; [2005] 39 EG 138 the court held that the covenantor needed the consent of the covenantee’s successors in title because it was unlikely that the covenantee, as the owner of a private residence, had intended to retain exclusive control over future development after moving away from the area. In Re Woodhouse [2010] UKUT 235 (LC); [2010] PLSCS 237, the applicants asked the Upper Tribunal to discharge certain restrictions contained in a conveyance to their predecessors in title. The tribunal noted that the restrictions formed part of a series of covenants affecting the dominant land.  Some of the restrictions were qualified by the need to obtain the seller’s consent for certain activities. Others were expressed in absolute terms. The tribunal accepted that there is a strong argument for construing covenants requiring approval of building plans as covenants that become spent where no provision was made for the seller’s death or dissolution and the power to consent was reserved to the seller alone: Crest Nicholson.  However, the covenant in question restricted the use of the land by prohibiting the applicants from using their property as anything other than a private dwellinghouse without the seller’s consent.  In addition, the consent provisions in the covenants were worded differently.  The power to approve plans for new buildings on the applicant’s land was reserved to the seller or its successors in title.  By contrast, the power to grant or withhold consent for changes of use was reserved to the seller alone.  The president of the tribunal said that it would be surprising if the absolute prohibitions imposed in the conveyance lasted indefinitely, but that the qualified prohibition restricting the use of the servient land terminated on the death of the seller. Consequently, he concluded that the prohibition on changes of use applied in perpetuity, subject to a dispensing power that ceased to apply when the seller died. Allyson Colby is a property law consultant