Summary
When investigating title, it is not unusual to find a
covenant restricting the use of the property and
providing that nothing is to be built without the
prior approval of “the seller”. Whether that means
the person who originally imposed the covenant or
the present owner depends on the circumstances,
as a recent case illustrates.
The judge also,
unusually, implied that approval was not to be
unreasonably withheld.
Facts
The Houghtons sold part of their garden to
the Martins. The Martins covenanted “not to use the
property hereby transferred for any purpose except
that of a private garden and not to erect thereon any
building other than a greenhouse, garden shed or
domestic garage in accordance with plans which have
been approved previously by the transferors in
writing”. The Houghtons sold their property. Whose
approval was necessary to the plans: the Houghtons’,
as original transferors, or their successors in title?
And was there an implication that consent should not
be unreasonably withheld?
Decision
Although other leading cases have held that
it was the original seller’s consent which was necessary,
here the judge decided that it was the current owners.
The difference was that, in previous cases, the original
seller had been developing an estate and therefore had
a continuing interest in controlling building even after selling the immediately neighbouring land. In this case,
the original transaction had been a sale between
neighbours. It would have been odd for the original seller
to want or need to exercise control after selling his house.
The person with the real interest in control was the new
owner of the house.
However, it was appropriate to imply that consent could
not be unreasonably withheld. The covenant
contemplated that certain buildings could be
constructed. The court would not allow that underlying
assumption to be frustrated by permitting the current
owners to act unreasonably when faced with an
application for approval. It is important to remember
that, if there is a dispute about whether consent has
been refused unreasonably, the court could not simply
substitute its view for that of the current owners: it would
have to be shown that no reasonable person would
have refused approval in the circumstances. That
would allow issues of taste and amenity to affect
the decision.
Comment
In considering the meaning of this sort of
covenant, much depends on the exact drafting and the
surrounding circumstances in which the covenant was
imposed. There is a welcome element of common
sense in the decision on that aspect of this case.
However, the finding that consent must not be
unreasonably withheld should be treated with caution
by those planning to build. The normal view is that, in
the absence of either express words or a statutory
implication preventing a party withholding consent
unreasonably, that person has an absolute discretion.
Source
Sims and anor v Mahon and anor [2005] All
ER(D) 169 (Jun)
In re Beechwood Homes Ltd’s
application (1994) 2 EGLR 178
Briggs v McCusker (1996) 2 EGLR 197
Crest Nicholson Residential
(South) Ltd v McAllister [2002] EWHC 2443
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