Freehold Covenants: Discharge

Question 1

How can restrictive covenants interfere with development plans approved by local planning authorities?

Answer 1

Even if planning permission is granted, existing restrictive covenants can prevent development if there’s land benefiting from those covenants.

Question 2

How can restrictive covenants be legally modified or removed, and what are the two primary methods for achieving this?

Answer 2

Restrictive covenants can be altered or removed through an
1. Express release, where the covenantee agrees to the modification or removal, typically requiring a deed and often involving payment, and
2. Application to the Lands Chamber under Section 84 of the Law of Property Act 1925, which allows for the release or modification of restrictive covenants under specified conditions when direct agreement is not feasible.

Question 3

What happens to a restrictive covenant when the burdened and benefited lands come under common ownership?

Answer 3

The restrictive covenant is extinguished when the burdened and benefited lands come under the same ownership.

Question 4

What issue might arise when attempting to seek an express release from a restrictive covenant?

Answer 4

The covenantee may not be located or may not be willing to release or modify the covenant

Question 5

On what basis can the Lands Chamber release or modify a restrictive covenant?

Answer 5

The Lands Chamber can do so on limited grounds, such as the covenant becoming obsolete due to changes in the character of the property or neighbourhood.

Question 6

What are some downsides to making an application to the Tribunal under Section 84?

Answer 6

The process can be lengthy and expensive, making it not always a worthwhile option.

Question 7

How can breach insurance be a solution for covenantors worried about violating a restrictive covenant?

Answer 7

Breach insurance covers losses from enforcing a breached covenant, protecting against risks if development proceeds and the covenantee cannot be located.

Question 8

What advantage does breach insurance offer for development projects facing old restrictive covenants?

Answer 8

It transfers the financial risk of covenant enforcement to the insurance company, allowing development to proceed despite potential covenant breaches.

Question 9

What are the key facts, legal issues, and decision in the case of Re Vince’s Application [2007]

Answer 9

Facts:
In 1978, Mr. Nangle sold Old Pinfold House, imposing three restrictive covenants to protect the enjoyment and value of his retained property, Pinfold House. By 2007, the property was owned by Mr. and Mrs. Vince, who wished to develop it into five apartments. To facilitate their plans, they applied to the Lands Tribunal for modification of the covenants, arguing that the restrictions were preventing a reasonable use of the property. This application was contested by Mr. Marshall, the current owner of Pinfold House, who sought to enforce the original covenants to preserve his property’s value and prevent nuisances.

Issues:
Whether Mr. Marshall could enforce the 1978 covenants as the benefit holder against Mr. and Mrs. Vince.
The transmission of covenant benefits to Mr. Marshall under common law and equity.

Decision:
* Mr. Marshall held the covenant’s benefit, fulfilling the automatic passage requirements at common law and the criteria for equity—no need for express assignment.
* Refused to modify the restrictive covenants under section 84 of the Law of Property Act 1925, concluding the intended development would significantly impact Mr. Marshall due to increased noise, traffic, and some loss of light, thus maintaining the covenants in their original form.