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Restrictive covenant - clearing off Print

How do you get rid of a troublesome restrictive covenant? The first thought may be to apply under s84(1) LPA 1925 to the Lands Tribunal, for the discharge or modification of the covenant. But, that is a relatively expensive (and time consuming) process. Moreover, the tribunal will not be sympathetic to an application that does not have planning consent, since otherwise it will not be able to see precisely what is proposed and the effect on other properties (see re Davies [2006]).

Plus, of course, the covenants may be of dubious enforceability (eg it may be unclear who actually has the benefit of the covenants). In that situation, there is a little-used remedy in s84(2) LPA 1925 that allows the court to make a declaration as to whether a covenant is still binding, and also, as to the nature and extent of the restriction.

The point about s84(2) is that it is of use when a covenant is of dubious enforceability. If someone clearly can enforce the covenant, then you must use s84(1) – unless, of course, you can negotiate a release with the other side. Under s84(2) the court will need to be satisfied that all those who might oppose the declaration have had the chance to do so, and that is why it is important to circulate a pre-claim letter to everyone who might possibly have the right to enforce the covenants. Once that is done, the legal process is not particularly lengthy (most s84(2) cases are heard in one day – and in London the delay for getting a hearing of one day will usually be about 3-4 months from the first CMC). Usually, the successful claimant has to pay the defendants’ costs, up to the time when the defendants were able to decide whether or not to oppose the claim on the evidence supplied. Obviously, if the claimant loses, then it will be normal for the claimant to have to pay all the defendants’ costs.

The point to appreciate is that s84(2) is relatively little known. If a client has land with development potential, then s84 is an ideal way of clearing-off covenants of dubious enforceability (and without having first to apply for planning permission). For an overview, see article in [2009] NLJ 1535.

December 2009
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