In the matter of an application under section 84 of the Law of Property Act 1925 by Sunita Surana [2016] UKUT 368 (LC) 30th August 2016  

Restrictive covenants – modification 

The Upper Tribunal agreed to modify a restrictive covenant that “no building or erection of any description” should be erected on a close under s.84(1)(aa) Law of Property Act 1925 as the overall integrity of the scheme would not be jeopardised by the construction of two houses on an undeveloped plot of land adjoining Ms Surana’s home. The properties would be in keeping with the type, size, style and density of the existing houses. The benefit of retaining the land in its current state would not be substantial and the covenants did not secure to the objectors any practical benefits of substantial value or advantage.   Fairhold Freeholds No 2 Limited v Alistair C Moody [2016] UKUT 311, 31st August 2016 

Administrative charges - letters 

The Upper Tribunal considered the question of whether a landlord was entitled to charge £50 for a letter demanding payment of £50 ground rent arrears under a covenant on the part of the tenant “to indemnify the Lessor against all actions proceedings costs claims and demands in respect of any breach non-observance or non-performance” of the tenant's obligations under the lease. The ground rent but not the administrative charge had been paid by the tenant before solicitors were consulted. It was held that the freeholder was not entitled to do so. The clause was held to be a covenant of indemnity intended to protect the lessor from its liability to make a payment to a third party. The “actions, proceedings, costs, claims and demands” against which the lessor is entitled to be indemnified were actions, proceedings, claims and demands made against the lessor. The costs recoverable were not any costs but the costs of a third party as a result of the lessee's breach, for which the third party is entitled to look to the lessor for reimbursement. A covenant of indemnity is not as wide as one making the tenant responsible for all costs incurred by the landlord arising directly or indirectly out of a breach. The lessor’s obligations, in this case to make payment to its agents and solicitors, had arisen not as a result of the tenant’s failure to pay the ground rent but from the lessor’s own instructions. 

Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC), 6th September 2016 

Breach of covenant – covenant not to use premises for any purpose other than as a private resident – short term lets 

The Upper Tribunal ruled that a leaseholder who advertised and grants a series of short term lets of premises is in breach of the clause not to use premises other than as a private residence was in breach of the covenant. It was noted that the clause does not state that the premises are to be used as the private residence of the lessee or the occupier, and only required it to be used as “a private residence.” However, it was held that a person who occupies premises for a matter of days and then leaves it cannot be said to be occupying the premises as his or her private residence. Accordingly, a lessee granting very short term lettings (days and weeks rather than months) necessarily breached the covenant to use the premises as a private residence.   

Baker v Dunne [2016] EWHC 2318 (Ch) 26th September 2016 

Beddoe applications – vacant possession 

The case concerned an application for Beddoe relief by the trustees of the trust of the deceased’s will in which all her children were equal beneficiaries. The trustees obtained a possession order in relation to the principal asset under the will, a pub, which one of the deceased’s children ran as a business. It was held that the Trustees are authorised to proceed to obtain vacant possession of the pub against any persons in occupation and to sell the property and are entitled to an indemnity in respect of their costs from the trust.