The importance of identifying land benefiting from a restrictive covenant

In the recent case of Bath Rugby Ltd v Greenwood and others, the Court of Appeal found that a restrictive covenant that pre-dated the Law of Property Act 1925 had not been annexed to benefiting land, because the extent of that land had not been identified.

The case concerned a restrictive covenant created in 1922, which could affect the redevelopment of a rugby ground. The claimant appealed against the High Court’s decision that the covenant remained enforceable by the current owners of various parts of the benefiting land.

The appeal court explained that for the benefit of a covenant to be annexed to land, it must be taken for the protection of defined lands so that it passes with ownership of the land. No particular form of words has to be used, but there must be a clear intention to benefit the land. If that intention exists, you may consider extrinsic evidence to ascertain the scope of that land.

In this case, the covenant was for the benefit of the “neighbourhood” and this was insufficient. While it is common for covenants preventing nuisance to refer to a “neighbourhood”, that term did not identify the property to which the benefit of the covenant was intended to be annexed, meaning that the benefit of this covenant had not been annexed to land.

It is good practice to clearly identify any land that is to benefit from a restrictive covenant to avoid disputes on that point in the future, but there are still many properties affected by pre 1925 covenants where this decision may be relevant.

Our residential conveyancing and commercial property teams at Wilson Browne regularly encounter restrictive covenants when dealing with property transfers, and in the case of dispute, our commercial litigation team can assist property owners.