Practitioners are often asked to draft restrictive covenants or to advise whether covenants remain enforceable, and, if so, by whom. Problems arise where covenants prohibit a landowner from carrying out work or from engaging in specified activities without permission or approval and the original covenantee has disappeared.
Advisers will need to consider whether: (i) the covenantee imposed the requirement to obtain consent exclusively for its own benefit; or (ii) the requirement was also imposed for the benefit of subsequent landowners. If the former, has the death or dissolution of the covenantee discharged the covenant or has it rendered development impossible because consent cannot be obtained?
In Churchill v Temple [2010] EWHC 3369 (Ch); [2010] PLSCS 327, the High Court had to answer all these questions in respect of covenants that prevented landowners from making structural alterations or additions to their home except in accordance with approved plans and specifications.
The judge compared and contrasted the interests of the parties to the original conveyance that divided the land and imposed the covenants. The sellers’ aim would, no doubt, have been to sell the building plot for the best possible price, while preserving the value of their home. By contrast, the purchasers’ aim would have been to secure as much freedom as possible. It was therefore difficult to believe that they would have agreed to a restriction in perpetuity in favour of successors in title whose identity and attitude would have been impossible to predict.
The structure of the provisions also suggested that the parties had agreed that the sellers would have short-term control over the building plot to prevent the construction of an inappropriate house or, once built, to prevent it from being altered inappropriately to circumvent some earlier objection. Consequently, the right to approve the plans for structural alterations and additions was vested in the original sellers alone.
What then was the position when the sellers died? The judge decided that the owners of the land burdened by the covenants would be in an impossible position if the covenants had become absolute because it would prevent them from making any alterations or additions. He applied the decision in Crest Nicholson Residential (South) Ltd v McAllister [2002] EWHC 2443 (Ch); [2003] 1 EGLR 165, ruling that the covenants had been discharged.
However, the restrictions were so widely drafted that the sellers would have been entitled to exercise control over their neighbours’ land while they were alive, even if they had moved away. The judge remarked that the sellers might still have been alive but be untraceable – or they might have been traceable but physically or mentally unable or unwilling to consider a request for approval or consent.
Such a result can be avoided by drafting covenants in terms that allow construction or alterations where plans have been submitted to the covenantee at its last known address, in the absence of objections within a specified period.
Allyson Colby is a property law consultant
