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Restrictive Covenants not Written in Stone

In a case which reveals that covenants restricting development are not written in stone, the Upper Tribunal (UT) has opened the way for a couple to build their dream home in a London suburb – although they must pay £75,000 in compensation to a neighbour who fiercely objected to their proposals.

The couple had demolished a cottage which had stood upon their land since the 18th Century before winning planning permission for a larger, strikingly modern, house on the plot. In seeking to block the development, their neighbour pointed to a restrictive covenant, dating back to 1942, which banned erection of any new building on the site without his prior consent.

The neighbour argued that the proposed new house would ruin the bucolic views he enjoyed from his £1.5 million home and interfere with his privacy through over-looking. He described the couple’s plans as ‘over-sized’ and said that the value of his home would be substantially diminished.

However, in effectively re-writing the covenant so as to enable the development, the UT noted that the roofline of the new house would be no higher than the cottage it replaced. Its design had been approved as ‘simple and contemporary’ by a planning inspector who said that it would ‘not look out of place’ in the area.

The UT found that impeding the development in reliance on the covenant would not secure practical benefits that would be of substantial value or advantage to the neighbour. The couple’s plans for the residential site were reasonable and, in the circumstances, money would provide adequate compensation to their neighbour.

The UT ruled that a fresh clause should be inserted into the covenant, allowing the development, dependent upon the couple paying their neighbour £75,000 in compensation. That was on the basis that construction of the new house would lead to a 5 per cent diminution in the value of the neighbour’s home.