When considering the effects of a restrictive covenant, it is crucial to establish who is the beneficiary, particularly where a consent or approval of a particular person is required to discharge any obligations under the covenant. A landowner may apply to have a covenant discharged or modified under the provisions of section 84 (1) of the Law of Property Act 1925 (LPA 1925) on a number of grounds, one of which is that the covenant is obsolete. In Ball & Another v Fulton, the Upper Tribunal (UT) considered whether covenants are obsolete if they are personal to an individual who is no longer able to enforce them.
The case concerned covenants restricting building works contained in a 1962 conveyance. The covenant provided that the landowner was "not to erect…any building other than a dwellinghouse… in accordance with plans as shall be submitted to and received the reasonable approval of the Vendor." The owners of the land affected by the covenant, made an application under section 84(1) of the LPA 1925 for the discharge, or alternatively the modification, of the covenant. They argued that the covenant required the personal approval of the original vendor and, since they were now deceased, the covenant was rendered obsolete.
The owners of the land benefitting from the covenant objected, claimed that the covenant was intended to benefit successors in title and that, as the original vendor's successors, their approval was required to any building works on the property.
The UT said it was "well established that a restriction is obsolete if its purpose can no longer be achieved and that where a personal covenant can no longer be complied with because the person to whom it was given is dead, or, in the case of a company , no longer exists, the tribunal will discharge the covenant on the basis that it is obsolete."
Further, it was "important to start from the plain words…and to give them their natural meaning." The judge found that there was no reference to the original vendor's successors in title within the covenant however there were instances where its successors were expressly mentioned elsewhere in the conveyance, where they were intended to be included. They found that if it were intended that successors be included in respect of the covenant the conveyance would have said so.
They therefore held that the particular covenant was personal to the original vendor and should therefore be discharged because it was obsolete, within the meaning of section 84(1) of the LPA 1925.
It can be challenging to interpret the intended effect of historic covenants, but this decision is an important reminder of:
- The need for very clear drafting when imposing new covenants which should explicitly state whether they are intended to benefit successors in title to avoid ambiguity and potential legal disputes, and
- The usefulness of section 84 LPA 1925 to developers seeking to challenge covenants which are no longer relevant or enforceable
The navigation of such matters will require careful consideration, and we would always advise parties to take legal advice before pursuing any particular course of action.
