In a recent case, the tribunal assessed the enforceability of a restrictive covenant. The covenant required the applicants to gain approval of plans to build or alter the exterior of their property and pay a fixed fee. The power to approve such plans vested in the sellers’ surveyor.
This raised the question as to whether the benefit of the restriction had passed to the successors in title or had lapsed upon the sellers’ deaths.
In this case, the applicants owned a bungalow which had previously formed one third of a freehold property. When the property was divided in 1961, the buyers agreed to the following restrictive covenant (among others) being included in the conveyance:
“A restriction on building or altering the exterior of the property without the prior approval of the sellers’ surveyor.”
The restriction also required a fixed fee payment of two pounds and two shillings, regardless of whether approval was given for the proposed works.
The legal issue for the tribunal to decide was whether this restriction had become obsolete and should therefore be discharged. The applicants argued that it should be discharged owing to material changes in the character of the neighbourhood and property, the impediment of the reasonable use of their land and that discharging the restriction would not cause injury to the beneficiary.
The applicants also submitted evidence that the three original sellers, party to the original conveyance, had died. They emphasised that this was significant as the option to have plans and specifications for work approved was limited to approval by the original sellers’ surveyor, not passing to their successors in title. As a result, they argued that the deaths of the sellers caused the restriction to expire and should therefore be discharged
The Tribunal concluded that the power to approve plans and specifications was no longer exercisable owing to the deaths of the original sellers. To give effect to the underlying and true intentions of the original sellers in 1961, the tribunal also held that that the restriction should be discharged to prevent the restriction from becoming absolute. The tribunal highlighted that other restrictions on the title were drafted to be absolute and this had to be taken into consideration when reviewing the intentions behind this particular restriction. Moreover, the fixed fee (of two pounds and two shillings), specified in the restriction failed to account for inflation; this suggested that the restriction was limited to the lifetime of the original sellers. The death of the original sellers caused the power to approve the building and alteration plans to expire. The expiry of this power made the restriction obsolete resulting in the decision for it to be discharged.
This case is a reminder of the importance of clearly drafted restrictions. Where there is uncertainty, the courts will infer the intention of the parties by scrutinising the wording of the agreement. For assistance in relation to any commercial property transactions do not hesitate to contact Patricia Kempson on 01604 463352 or click here to email her.