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Did you know that if you are a land owner considering development or a developer looking to purchase land that you can make an application to remove or modify a restrictive covenant?
A recent decision by the Upper Tribunal (Lands Chamber) (Millgate Developments Limited v Smith (2016)) highlights the ability of the Tribunal to remove or modify a restriction on land on application to the Tribunal. The decision in this case was made on the basis that they thought the restrictive covenant was contrary to the public interest and stopped the use of the land for social housing.
Restrictive covenants impose restrictions on the way in which land may be used by one land owner for the benefit of another person’s land.
In this case, the developer Millgate, had built social housing in the knowledge that it was in breach of the restrictive covenant not to build on the land. The neighbouring land owners who had the benefit of the covenant were the trustees of a charity and they were building a hospice for terminally ill children on their adjoining land.
The Upper Tribunal took the decision to modify the restrictive covenant on the basis that although the covenant gave the neighbouring trustees privacy and seclusion for the hospice, there was an overriding benefit in the public interest to enable the use of the development land for social housing stating that they “considered the public interest outweighs all other factors in this case and that it would be an unconscionable waste of resources for the houses to continue to remain empty.” The Tribunal decided that the trustees could be compensated by money (£150,000.00) and if trees were planted this would provide adequate privacy to the hospice.
This is a positive decision for developers demonstrating that an application to the Upper Tribunal to remove or vary a restrictive covenant may be successful if it is in the public interest particularly if the development includes social housing or some other public benefit.
Should you be considering developing land that is subject to a restrictive covenant that you need to be modified or removed, then please contact a member of our commercial property team.
If you wish to speak to the writer of this article please contact Sara-Jane Newell on 01952 810307 or email Sara-Jane firstname.lastname@example.org
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