Covenants restricting development on land are a perennial thorn in the side for housebuilders. They can either restrict development entirely or restrict its extent. One way that housebuilders can challenge a restrictive covenant is by challenging its enforceability under s.84 of the Law of Property Act 1925.
Rugby fans may be aware that Bath Rugby Club is in dispute with some of its neighbours in respect of plans to develop land around its ground at The Rec in Bath.
The neighbours rely on a restrictive covenant contained in a 1922 conveyance of the land. It provided that “no workshops, warehouse, factories or other buildings for the purpose of any trade or business… shall be hereafter erected on the said land.”.
This restrictive covenant was stated to be for the benefit of “the adjoining premises or the neighbourhood”.
A number of neighbouring property owners claimed that they had the benefit of the restrictive covenant. Bath Rugby Club challenged the enforceability of the covenant under s.84(2) of the Law of Property Act 1925.
A declaration was made under s.84
Another interesting aspect of this case is that Bath Rugby Club sought a declaration under s.84 that the restrictive covenant was not enforceable by anyone. Usually, such applications are made against specified people, because there are only a very limited number of people that could benefit from the restrictive covenant. However, here, the land that originally benefited from the restrictive covenant was an estate owned by a large landowner, which was subsequently split off into hundreds of different ownerships. Section 84 allows the applicant to claim for a declaration against anyone that might benefit, however the hoops that the applicant must jump through are numerous. Although an applicant does not have to notify all potential beneficiaries, they must make every effort to contact them. In this case, Bath Rugby Club had to send over one thousand letters to different people, hold several public consultations and meetings and send hundreds of emails.