Two recent cases have dealt with different issues in relation to restrictive covenants. The first related to an applicant having difficulty registering their disposition of a registered title because of a restriction (a common frustration for many people making Land Registry applications). The second dealt with the interpretation of a restrictive covenant against additional buildings.
In this case the applicant was faced with a restriction on the title of a leasehold flat. The restriction was on the following terms:
“Except under an Order of the Registrar no transfer or lease is to be registered without the consent of the Lower Lessee or other registered proprietor for the time being of title number SY245193.”
The applicant’s solicitor had twice written to the Lower Lessee but had received no reply so an application was made to the Upper Tribunal to discharge the restriction.
The application was brought under section 84(12) of the Law of Property Act 1925, which allows leasehold covenants to be modified or released where the lease is for a term of 40 years or more and more than 25 years have expired. Crucially though this only applies to restrictions “as to the user [of land] or the building thereon.” Because the restriction related to registration of a disposition (as opposed to the use of the property), the application was dismissed.
Restrictions requiring consent from some third party in order to register a transfer or lease are not unusual. So what is the correct course of action if that consent is not forthcoming? An application could be made to the court for a declaration that consent has been unreasonably refused. A cheaper and quicker option would be to apply for the restriction to be disapplied in respect of the particular application to register a disposition. Evidence would be required to show that the applicant has used best endeavours to comply with the terms of the restriction. If the Registrar is willing to disapply the restriction based on the evidence presented then the disposition in question can be registered without the consent, but the restriction will remain on the title.
This case dealt with the interpretation of a restrictive covenant imposed in a 1958 conveyance of a property known as Rose Cottage. The covenant prohibited the erection of “any additional buildings whatsoever” on the land.
Mr and Mrs McDonagh sought a declaration that their proposed demolition of Rose Cottage and construction of a much larger replacement building (for which they had obtained planning permission) would not breach this restrictive covenant.
They argued that, since the covenant would bind the land in perpetuity, it would be absurd to say that in the event that Rose Cottage was destroyed by fire or otherwise came to the end of its natural life a replacement or substitute dwelling would be prevented from being constructed. They argued that this could not have been what the original parties intended when entering into the covenant in 1958. They further argued that, assuming the covenant permitted a replacement dwelling and was only concerned with additional buildings, there was no reason why the replacement dwelling should be limited in extent, size or footprint.
The court agreed with this interpretation. A great deal of consideration was given to the circumstances that existed at the time the covenant was entered into –such as the covenant being intended to protect the sea views of the neighbouring land which was being transferred out of the land on which Rose Cottage sat. The court also observed that in this context it would be unlikely that the seller would voluntarily have restricted its ability to extend or alter its existing dwelling.
If you have any questions relating to this article, please contact Graham Jones at [javascript protected email address].
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