Restrictive covenants and enforceability

Restrictive covenants are binding conditions between landowners that ensure that certain acts are not carried out on their land. These can range from altering or creating new buildings to preventing pets from being kept on the property.

There are certain conditions in which a restrictive covenant could be argued to be unenforceable or enforceable, and this blog will look at these as well as the recent Upper Tribunal case of Livett & Anor v Hennings & Anor [2022] UKUT 325 (LC) and the High Court case of McDonagh & Anor v Reeve [2023] EWHC 933 (Ch).

Conditions for restrictive covenants to be enforceable

It would firstly be important to discuss what conditions need to be satisfied before a restrictive covenant would be considered enforceable in the first instance, the case of Tulk v Moxhay [1848] EWHC J34 (Ch) covered four conditions:

• Covenant must be negative;
• At the date of the covenant, it must be made to benefit the dominant land;
• Covenant must touch and concern the dominant land; and
• Covenant must be made with the intention to burden the servient land.

There are also certain conditions where a restrictive covenant was created before 1 January 1926, and the case of Sutton and East Surrey Water Plc v Kilby and others, Re Woodcote Reservoir [2017] UKUT 248 (LC) helpfully highlighted the rules relating to pre-1926 restrictive covenants:

• The covenant must touch and concern the land of the original covenantee;
• The land to which it relates must be identifiable; and
• The benefit must have passed to the original covenantee’s successors in title by annexation, assignment or by virtue of a building scheme.

Transfer of covenants made after 1 January 1926:

After 1 January 1926, s.78 of the Law of Property Act 1925 states that there is a statutory presumption that unless there is an intention to the contrary, a covenant will automatically pass to successive benefitting landowners.

Recent developments regarding restrictive covenants

Livett & Anor v Hennings & Anor [2022] UKUT 325 (LC):

In this case, Mr and Mrs Livett’s property was subject to a covenant requiring them not to build more than one dwelling house on their land and not to cause a nuisance to their neighbours. They, however, received planning permission to demolish a house and build two new dwellings, and therefore their neighbours objected to the build.

The covenant was made for the benefit of the residue of the Vendors’ Estate, meaning the unsold land still in the Vendors’ hands. As the conveyance relating to the covenant was dated 22 October 1931, and the land owned by the neighbours was sold off prior to this date, it did not form part of the ‘Vendors’ Estate’, therefore, the neighbours did not have the benefit of the covenant. As such, the neighbours had no standing to object unless they could demonstrate that there was a building scheme, which has the effect that all landowners within a defined area are able to enforce covenants, regardless of the date the land was sold. The characteristics of a building scheme were set out in Birdlip v Hunter [2016] EWCA Civ 603:

• It applies to a defined area;
• Owners of properties within that area have purchased their properties from a common owner;
• Each of the properties is burdened by covenants which were intended to be mutually enforceable as between the several owners;
• The limits of that defined area are known to each of the purchasers;
• The common owner is himself bound by the scheme, which crystallises on the occasion of the first sale of a plot within the defined area, with the consequence that he is not entitled to dispose of plots within that area otherwise than on the terms of the scheme; and
• The effect of the scheme will bind future purchasers of land falling within the area, potentially for ever.

The Upper Tribunal concluded that the neighbours were not able to prove that there was a building scheme and, as such, did not have the right to bring an objection. This was decided as it was deliberated that there was no defined estate and that there was no evidence that the covenants were intended to be mutually enforceable between the several owners.

McDonagh & Anor v Reeve [2023] EWHC 933 (Ch):

This more recent case concerned the Claimants, Mr and Mrs McDonagh, who sought to demolish the building known as Rose Cottage and construct a much larger property. Planning permission was obtained; however, the 1958 conveyance included a restrictive covenant that ‘no additional buildings whatsoever’ should ‘at any time be erected’.

The Court had the task of interpreting the actual meaning of the covenant, with Deputy Master Bowles deciding that what was meant at the time the covenant was made was that no additional buildings aside from Rose Cottage be erected, and as such, a replacement of Rose Cottage was not precluded. This was decided after considering the circumstances at the time the covenant was entered into, namely that it was intended to protect the sea views of the neighbouring land.

The Court also decided that the Claimants would not be limited in the size and footprint of their replacement building, as clear and specific words to that effect would have been used within the covenant.

Conclusion

Restrictive covenants are a complex area of law with multiple conditions that need to be satisfied before they can be enforced, and the recent cases highlighted play a vital role in solidifying this. In particular, both cases highlight that objecting to new builds through the arguments of restrictive covenants is not straightforward, and careful consideration is needed by both those applying and objecting in order to succeed at litigation.

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