The recent case of Livett v Hennings considered a landowner’s application to discharge a restrictive covenant that prohibited building more than one dwelling on their land. The decision is relevant to developers whose land is subject to covenants restricting what they can do on their land and those who wish to object to the discharge or modification of covenants. Shujeth Ahmed examines the decision.
The application was brought by Mr and Mrs Livett, who owned land in Petts Wood subject to a restrictive covenant not to build more than one dwelling on the land. Mr and Mrs Livett obtained planning permission to build two houses on their land and applied to the Upper Tribunal to discharge or modify the restrictive covenant so they could do this. Two of their neighbours objected.
The restrictive covenant was set out in a conveyance dated 22 October 1931 and made in favour of the ‘Vendor’s Estate’, meaning the unsold land still owned by the vendor at the time. The land owned by the objecting neighbours was sold off before the restrictive covenants created by the 22 October 1931 conveyance, so it did not form part of the ‘Vendor’s Estate’. They did not, therefore, have the benefit of the covenant.
On what basis can someone apply to the Upper Tribunal?
To apply to the Upper Tribunal, one or more of the grounds set out in section 84(1) of the Law of Property Act 1925 must be fulfilled. An applicant must show that:
- the covenant is obsolete, or
- it would impede reasonable use of the land, or
- both the applicant and the person benefiting from the restriction have agreed to the discharge/modification of the covenant, or
- it will not injure the persons entitled to the benefit of the covenant.
Who can object to an application?
You can object to an application to discharge or modify a covenant if you are entitled to benefit from the covenant or if a building scheme is in place. In Livett v Hennings, the objectors had to show there was a building scheme in place as they did not benefit from the covenant (for the reason stated above).
How do you prove a building scheme exists?
To claim the benefit of a covenant by virtue of a building scheme, an objector must show that the scheme satisfies the following five requirements:
- The scheme applies to a defined area,
- The properties within that area were bought from the same owner,
- Each of the properties is burdened by covenants intended to be mutually enforceable.
- The limits of the defined area are known to each purchaser, and
- The common owner is bound by the scheme and is not entitled to dispose of plots within the area otherwise than on the terms of the scheme.
The effect of there being a building plot is that all future owners within the defined area are bound by it.
In Livett v Hennings, the tribunal found that the objectors had failed to identify the defined area as the 1931 conveyance did not have a plan showing the estate, nor did other title plans identify a defined area. As a result, the objectors did not have legal standing to object to the landlowner’s application to modify or discharge the covenant.
This case is important for developers as it highlights the possibility that those objecting on the basis of there being a building scheme in place may not be able to satisfy each of the five requirements. It is also relevant to those seeking to object to the modification or discharge of restrictive covenants.
Anyone seeking to apply for or object to an application to discharge or modify a restrictive covenant should seek early legal advice on the merits of their case.
If you require further information on this article, please contact Shujeth Ahmed at [email protected].
Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional advice before taking any action in relation to the issues discussed above.