Not in my back yard!

Derreb Limited v Blackheath Cator Estate Residents Limited, Prof Martin Prince and Mrs Mie Prince, and Mr Paul Harpin and Ms Clare White (Case No. LP/27/2014) [ 2017 ] UKUT 209 (LC) Upper Tribunal (Lands Chamber)

The Applicant developer owned some derelict land which was the site of a former sports centre. The Applicant wished to develop the land for residential purposes comprising detached / semi-detached / terraced houses and flats. However, the land was subject to a restrictive covenant in the Objectors’ favour restricting any use of the land as a sports centre and any other development could be for detached houses only.

The Applicant applied to the Tribunal to discharge/modify the restrictive covenant so that the development could go ahead.

After considering the evidence, the Tribunal did modify/discharge the restrictive covenant allowing the development to proceed. An interesting case for developers!

The facts

The development land in question was subject to the following restrictive covenant:

The property hereby conveyed shall not be used for any purpose other than as a Sports Ground or for the erection of detached houses for use as private residences only such buildings to be erected in such a position and in accordance with such plans and elevations including general layout and development plans as shall first be submitted to and approved at the Purchaser’s expense by the Vendor’s Surveyor as aforesaid.

The Objectors comprised effectively the residents of the adjoining estate which owned the freehold of the private estate roads between the existing residential estate and the development land. There were also two individual objectors who owned properties immediately in front of the development land.

The problem in this case was that the planning policy of the Royal Borough of Greenwich (“Greenwich“) was clear in that it would not permit a development of just detached houses given the demand for more housing. Although planning permission had not yet been granted, the Tribunal accepted that it would be granted in due course.

The law

The Tribunal’s powers relevant to this case are set out in Section 84 of the Law of Property Act 1925 and effectively allow the Tribunal to fully or partially discharge or modify any restrictive covenant if it is satisfied:

  • Ground (a) : that by reason of the changes in the character of the property or the neighbourhood (or other circumstances), the restriction ought to be deemed obsolete; or
  • Ground (aa) : the restriction impedes some reasonable user of the land for public or private purposes and
    • does not secure to those with the benefit of the restrictive covenant any practical benefits of substantial value or advantage to them; or
    • the restriction is contrary to the public interest

And in either case money would be an adequate compensation for the loss or disadvantage if the restrictive covenant was discharged or modified.

The findings

The Applicant argued that the planning position relating to the land was clear in that it was designated as an “area for intensification”. Having taken soundings from Greenwich, it was clear that a scheme for detached houses would not be approved. For that reason, the restrictive covenant effectively sterilised the land as it would never again be used as a sports ground.

When assessing whether there would be any loss in value to the Objectors’ properties if the scheme went ahead, the Applicant’s valuer did not believe there would be any such impact on value. The view expressed was that it was better for a development to go ahead rather than have the uncertainty of what might be built opposite your land in the future. As the hearing progressed, the Objectors’ approach seems to have softened and they all accepted that the development should go ahead but with the imposition of further restrictions and/or the award of monetary compensation. Nevertheless, it remained for the Tribunal to decide whether the grounds for the discharge/modification were made out.

It was also an interesting feature of the case that the restrictive covenant in question required the consent of the “Vendor’s Surveyor”. However, the vendor had since died and there was no clear successor in title given that the estate was now owned by so many different interests.

The Tribunal’s findings

The restriction to a development of detached houses only was not obsolete – it still enabled the beneficiaries of the restrictive covenant to have some control over what was built on the development land.

The restriction to the use of the development land as a sports ground was obsolete as it was not feasible that such a sports ground would ever be operated from the land.

The Applicant’s proposed use for the development land was a reasonable user and the restrictive covenant did impede that reasonable user.

There was substantial value/advantage to the residents of the estate in controlling the intensity of traffic on their estate roads. However, given they were prepared to agree to a provision which effectively restricted such traffic to bicycles and mobility scooters, then if the Applicant was prepared to accept such an imposition, the restriction did not offer any practical benefit of substantial value or advantage.

With regard to the personal objectors, the Tribunal imposed further conditions which met their concerns relating to the type of property and the extent of any balconies which could be built.

Consequently, a new restrictive covenant was effectively drafted which protected all the parties but allowed the development to go ahead.

Our comments

This case is a good example of the Upper Tribunal taking a pragmatic approach in resolving difficulties between developers and adjoining landowners. It also assisted in dealing with the country’s need for housing, but also, in doing so (as they expressed in their judgment), they perhaps benefitted the Objectors by having certainty in the future about the type of development that could be built.