Tribunal refuses to modify restrictive covenant to prevent setting precedent to others
In Cross v Coach House Mews (Highbury) Ltd [2022] UKUT 20 (LC) the Upper Tribunal (Lands Chamber) considered the frequently rehearsed "floodgates" or "precedent" argument in respect of an application to modify a restrictive covenant preventing the erection of an extension, pursuant to section 84(1) of the Law of Property Act 1925 (LPA 1925).
Mr and Mrs Cross wished to construct a single-storey extension to their three-storey freehold mews house in Coach House Lane, London, and obtained planning permission. However, the planned extension would be in breach of a restrictive covenant benefiting the 21 freehold owners of properties in Coach House Lane and the management company owned by them. The covenant prohibited the erection of, or material alteration or addition to the external appearance of, any buildings, walls, fences or other structures.
Mr and Mrs Cross applied to the Tribunal to modify the restriction on the grounds contained in section 84(1)(aa) of the LPA 1925: that the continued existence of the restriction impedes some reasonable use of the land and the tribunal is satisfied that it does not secure any practical benefits or advantages of substantial value or advantage to those entitled to its benefit; or (c) that the proposed discharge or modification will not injure those entitled to the benefit of the restriction.
The management company and three residents of Coach House Lane objected to the modification of the covenant on aesthetic grounds, namely, that the proposed design was not in-keeping with the visuals of the Lane and would be visible from other properties. One resident also argued that it was a "point of principle" that it should not be allowed, as this was likely to encourage others in the Lane to apply to extend their properties in a similar way, with other objectors making similar points.
The Tribunal member sitting found in favour of the objectors, holding "modification of the covenant to allow the extension would encourage others to seek to extend their properties and increase the prospects of them being successful" and further noted that this would risk a significant loss of amenity, affecting the visual amenity for owners and possibly harming the character of the estate. The covenant provided certainty as to development and prevented disturbance to outside space and light, which were attributes to be preserved in a densely developed estate. Because of this, the practical benefit conferred by the covenant was of substantial advantage and so the requirements of section 84(1)(aa) were not satisfied, and the application was dismissed.