Posted on 6 December 2023
This week I have a legal update on restrictive covenant modification. The Upper Tribunal (Lands Chamber) recently released a decision in the following case: Kay v Cunningham & Anor (RESTRICTIVE COVENANTS – MODIFICATION – building scheme – covenant not to use historic house other than as a single private residence – Law of Property Act 1925, s.84) [2023] UKUT 251 (LC) (24 October 2023) (bailii.org) .
I’d like to draw out a few key points of interest to landowners and developers alike.
Case Summary
This case concerned Lea Hurst, the childhood home of Florence Nightingale in Derbyshire.
To cut a long story short, Mr Kay bought Lea Hurst and wanted to turn it into a B&B. This was despite a restrictive covenant placed on the land in 2005 “not to use Lea Hurst other than as a single private residence”.
Neighbours Mrs Cunningham and Mr Nix were not happy about this, and sought an injunction restraining the use. Mr Kay applied to the Tribunal for a modification of the restrictive covenant under S.84(1) Law of Property Act 1925 to read “not to use Lea Hurst other than as a single private residence with or without additional accommodation of paying guests”.
He won.
Restrictive Covenant Modification – Planning Permission
The Tribunal’s deliberations reveal some interesting pointers as to how they approach an application for restrictive covenant modification.
The Tribunal noted that the change of use did not require planning permission. The Tribunal considered that the fact it did not require planning permission was an indication that it was a minor alteration to the use of the premises and one that would not normally give rise to concerns, even where properties are conjoined.
Restrictive Covenant Modification – Rationale For Change
The Tribunal has a discretion as to whether to modify a covenant or not. In this case they exercised it. Against Mr Kay was the fact that he continued to proceed with advertising on his website and Tripadvisor etc, when it was self-evident this activity was in breach of covenant. However, in his favour (and which ultimately weighted more heavily with the Tribunal) was his apparently sincere desire to preserve a heritage asset and make it available for use, albeit on a small scale to the paying public. The Tribunal found that Mr Kay had spent a considerable sum to put Lea Hurst into a state whereby it can be enjoyed as a family home and small scale bed and breakfast. The Tribunal was inclined to believe that his motivation was, in part at least, altruistic and not entirely pecuniary.
Or, to put it another way, he wasn’t just moneygrabbing. His partial motivation for the breach and modification request was to allow Miss Nightingale’s former childhood home to be seen by the public.
Implications
Well, if you are a property owner or a developer looking to do something different with your land, and there are restrictive covenants on the land preventing that, it might not be the end of the road. The case is a useful reminder that you can make an application to the Tribunal for a restrictive covenant modification order using S.84, and you might be successful.
Equally, if you are the beneficiary of such a covenant, it is a reminder that you cannot assume that covenant will remain forever. They can be changed.
It is interesting that the Tribunal placed weight on the planning position. What was permitted under planning law was considered to be less offensive by virtue of that. Looking at the planning position on your site as well as the restrictive covenants may assist in deciding whether an application under S.84 is worth it.
Motive played quite heavily in the Tribunal’s thinking. I doubt most landowners have a heritage asset to play with, so this case is partly limited to its facts. However, the Tribunal didn’t automatically rule against the applicant because he knew (or should know) that he was in breach. They weighed his motives, and particularly the fact that he was not entirely motivated by money. If you are considering this sort of application, be prepared for your motives for doing so to be scrutinised by the courts. A good “pitch” in a sense is important here.
Conclusion
Nothing is set in stone. Section 84 is important to remember whether you are looking to breach a covenant or enforce it. The Tribunal has discretion, and exercises it. Although please note that there are various hoops they must jump through first in order to do so. Section 84 contains certain conditions that must be satisfied – I’ve not gone into the full detail here. The planning position and motive are key factors.
If you are faced with an issue like this, whether you are wondering if you can “breach” a covenant (or apply to get it modified), or whether you can enforce one, get in touch on 01384 872069 . I can connect you with the right solicitor to help you out.
Contact Me
As always, if you have any queries, then do get in touch for a no-obligation, free, quotation via enquiries@mcleanlegal.co.uk or on 01384 872069 or via my Free Enquiry web page. All work is carried out through Nexa Law Limited, which is authorised and regulated by the SRA.
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Finally, the above article is for general information purposes only. It is not intended to be, and is not, a full case summary. Neither is it a detailed examination of the law involved in an application to modify restrictive covenants. It is not legal advice, and should not be relied on as such. You should take proper legal advice before taking any action on any points mentioned above. The law also changes. Whilst the above article is accurate based on my reading of the case report in December 2023, the law (and judicial interpretation of the law) can change. So, take legal advice.
I look forward to seeing you next time!
Thanks
John
Picture Credit: Dominique Vince, Pixabay
