Restrictive Covenants: Modifying covenants and Class Q

In the case of Jackson v Roselease Limited [2019] the Upper Tribunal was asked to consider an application to modify a restrictive covenant preventing any external alterations or extensions of existing buildings or their occupation for residential purposes. 

The Jacksons planned to convert a derelict dutch barn and disused farm outbuildings into 2 houses and garages under Class Q, but could not proceed unless Roselease Limited ("Company") gave consent or agreed to modify this covenant. 

Grounds for lifting

The Jacksons relied on two limbs of s.84 Law of Property Act 1925:  first, that the lifting of the covenant would not cause injury to the Company.  They succeeded on the facts on this point as the buildings could barely be seen from the neighbouring property and the Company had at one time expressed an interest in developing the buildings themselves. 

The second limb was that the continued existence of the covenant would impede some reasonable user of the land and the covenant was either contrary to the public interest, or didn't secure an advantage to the Company. 

There was no planning permission in this case because it fell under Class Q and so no presumption that the proposed use was reasonable.  However, the Tribunal approached this on a common sense basis and considered the use of derelict buildings for housing appeared reasonable, as did the conversion of unsightly structures into new buildings, in keeping with their surroundings.  They found that the use impeded by the covenant was therefore a reasonable use, even though there was no planning permission.  Further, there was no practical benefit to the Company from the covenant, so the Jacksons succeed on the second limb.

Compensation for lifting of covenant

The Tribunal considered whether compensation should be awarded if the land's value had been reduced previously due to the covenants.  However, the Company had not sold the land for a reduced sum reflecting the covenants, so no compensation was awarded.

The Upper Tribunal has taken the view that permitted development is a reasonable user of land and that may assist others looking to develop under class Q.