Hiccups On The Way To Development

Restrictive covenants can prevent certain things from happening on land.

Often the covenants were imposed in the relatively dim and distant past and if they could potentially stop a development from happening there are three possible ways round the restrictions:

• You can buy insurance to protect against a claim being made;
• You can negotiate with the entity that has the benefit of the restriction to release the restriction in return for some payment;
• You can apply to the Upper Tribunal to modify the restriction to enable your proposed development.

Recently a developer attempted to go down route 3 but only after the development had actually been built.  The case went to the Court of Appeal and decided against the developer.   If you wish to apply to the Upper Tribunal you must do so on the basis that the restriction impedes the reasonable use of land and is contrary to public interest.

The developer thought that the mere fact that planning permission had been granted was sufficient to show that.  The Court of Appeal disagreed and considered that the builder’s conduct – in deliberately not engaging with routes 2 or 3 beforehand was also relevant.

It seems likely that the builder thought he could take a shortcut but the outcome at the Court of Appeal highlights that when considering development projects, you take a big gamble if you take a short cut.  It is better to resolve issues at an early stage.

It may appear to waste time and money to resolve them but it will undoubtedly be less money and less time than if you have to deal with them after you’ve already bought the land and carried out the development.

If you need any advice contact our Specialist Team