There are many reasons why a restrictive covenant may be put in place; usually they are sought to protect an interest or asset – a retained property, for example.
A restrictive covenant is legally binding for all future owners and often the full effect of the restriction only comes to light many years later, perhaps when a new owner investigates a change of use and applies for planning consent.
Common examples of covenants include restricting any future development on a site or limiting the number of dwellings; preventing the erection of any further buildings or limiting the use of land for example to agricultural or equestrian.
Law of Property Act 1925
An application to the Lands Chamber is required to release or modify a covenant, which is dealt with under Section 84 of the LPA 1925, as subsequently amended. This assumes the parties cannot agree the matter between themselves.
The tribunal has the power to wholly or partially discharge or modify a covenant, and in doing so will consider various grounds or tests, although the decision of the tribunal is always discretionary.
Whilst the application process is a legal one, and will be made by a lawyer, the judgements that the tribunal make concern the extent of the potential impact on the beneficiary’s property and will rely on the expert evidence of surveyors and valuers to assess this. This relates to the applicant potentially being directed by the tribunal to pay consideration (i.e. a monetary sum) to the beneficiary of the restriction, if it is modified or discharged, and again a valuer’s expert opinion is key.
Expert advice and evidence
Parties affected must take extreme care when approaching the release or modification of a covenant to avoid prejudicing their position irrevocably should the matter proceed to the Lands Chamber. They should seek advice at the outset to understand the strength of their position.
Expert advice may be required for Lands Chamber proceedings for areas including:
- the valuation impact of the proposals
- the nature of the restrictive covenants affecting a property
- the likely impact on the property in question or neighbouring properties – by reference to considerations under S.84 of LPA 1925
- potential for negotiations between the parties for an agreed waiver of the covenant
- recommending a suitable mediator when required
When acting as expert, surveyors report in a format acceptable to the RICS and the courts, and it must be free from bias.
Whilst there are various published cases, it is important to remember that each case is unique and will turn on its own merits. There will be particular facts and a certain context, and understanding these along with the wording of the restrictive covenant is why expert evidence is so essential.
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