In Muskwe & Another v Cochrane [2023] UKUT 00262 (LC), the Upper Tribunal (Lands Chamber) has modified a restrictive covenant not to use the property other than as a single private dwelling house, such as to enable the property to be used as a residential care home.
Background
The Applicants were the freehold owners of a residential property in Braintree, Essex. They worked within the childcare sector and wanted to use the property as a residential care home for up to four children/young persons.
The property was subject to two restrictive covenants, one from 1997 not to use it "other than as a single private residence", and one from 2000 not to use it "other than as a single private dwellinghouse with usual outbuildings".
In 2020, Braintree District Council granted planning permission for a change of use from residential dwelling (C3) to a residential care home (C2) for up to four children/young persons and the Property was used as a care home for two children from January 2022 until November 2022 in breach of the restrictions.
The application and grounds
In November 2022, an application was made to the Upper Tribunal for modification of the restrictive covenants under grounds (aa) and (c) of section 84(1) of the Law and Property Act 1925. The Applicants argued that the restrictions impeded a reasonable use of the land (ground aa) or, in the alternative, the proposed modifications would not injure the person entitled to the benefit of the restriction (ground c).
The Respondent, who lived next door, objected for the following reasons:
(1) during 2022 when the Property was being used as a care home, there were numerous visits from the police and visits from ambulance staff, a window had been smashed and there was shouting and banging coming from the Property late at night which impacted the neighbours;
(2) the Respondent had young children and was concerned about the impact of the disturbances on them; and
(3) a concern that the value of her property and saleability would be affected. If modification was granted, the Respondent sought compensation in the sum of £40,000.
The Upper Tribunal heard evidence that a large number of properties in that part of Essex are used as dwellings for assisted living for adults and children and it is not uncommon for properties to be used in the area as care homes, some without the need for a planning application. The Tribunal also heard expert valuation evidence that changing the Property to Class C2 use would have no impact on the value of the respondent's property. The Respondent had no expert evidence and did not attend the hearing.
The Decision
The Upper Tribunal found that ground (aa) was made out and the Tribunal exercised its discretion to modify the restriction as it impeded a reasonable use. The Tribunal also found that ground (c) was made out because the proposed modification would not injure the Respondent or the neighbourhood. The restrictive covenant was modified to enable use of the property as a residential care home within planning use class C2 for up to four children/young persons subject to the conditions attached to the planning permission, or any subsequent renewed planning permission.
Encouragement for care home operators
This case will be of particular interest to those who operate residential care homes, as it is often the case that properties that may be otherwise suitable for such use are subject to restrictive covenants not to use the property other than as a single private dwellinghouse. Whilst any application will always be treated by the Upper Tribunal on its own merits, and the respondent in this case did not submit expert valuation evidence or attend the hearing, it demonstrates that the existence of such restrictive covenants can be overcome in certain cases to enable the use of the property as a residential care home.
Despite the Applicants using the property in 2022 in breach of the restrictions, and the Tribunal having sympathy for the Respondent's concerns, the Upper Tribunal appears to have been ultimately persuaded by the fact that it was not uncommon for houses in residential areas around Braintree to be used as residential care homes, and by the unchallenged expert valuation evidence. For prospective applicants, the key lesson is that when seeking to modify or discharge a restrictive covenant it is crucial to submit persuasive factual and expert evidence.
