Restrictive covenants and holiday homes, a precarious mix
In Stafford Flowers v Linstone Chine Management Company Ltd
 EWCA Civ 202, the Court of Appeal ("CA") has considered
whether to discharge a covenant which restricted the use of holiday
lettings to certain periods of the year.
A number of bungalows were built in the 1980s for holiday use in
the Isle of Wight and each bungalow was subject to a
restrictive covenant that prevented its use to certain periods of
the year only. This reflected a condition of the original
planning permission. Mr Stafford Flowers ("the Applicant")
and his wife bought one of the bungalows in 1998 and continue to
live there all year round, in breach of the covenant.
In 2012, the Applicant applied for and obtained a Certificate of
Existing Lawful Use ("CLEUD"), which confirmed that the use of the
property was lawful for planning purposes. The Applicant then
made an application to the Upper Tribunal (Lands Chambers) ("UT")
to discharge the covenant from the registered title.
The UT has discretion as to whether to discharge or modify a
covenant if an applicant can make out one of the grounds set out in
section 84 of the Law of Property Act 1925, which include that the
covenant is obsolete or impedes some reasonable use of land.
The Applicant argued the covenant was indeed obsolete and or
impeded reasonable use of the land however to succeed in this
argument, the UT must also be satisfied that the covenant does not
secure any practical benefits to the beneficiaries of the covenant
or any substantial value or advantage.
The UT originally modified the covenant to limit the restriction
to overnight use during the restricted weeks but would not
discharge the covenant, as by doing so, it considered that it may
result in a change in character of the development. This was
notwithstanding that others were also occupying bungalows on the
same development all year round similar to the Applicant.
On appeal, the CA considered that by allowing the discharge of
the covenant, current and future owners of properties may make
similar applications to discharge the covenants which affect other
properties on the development and this would undermine the
protection offered by the covenant. Whilst the Applicant had
been successful in showing the covenant impeded the reasonable use
of the land, he had failed to show that the covenant did not secure
any practical benefits or advantages to the beneficiaries of the
covenant. There was a benefit to being able to enforce the
covenant in order to protect the character of the site.
As anticipated, the case further highlights the uncertainties in
such applications and will focus the minds of land owners to
consider their obligations to comply with restrictive
covenants. The fact that use of a property is lawful from a
planning perspective will not of itself result in an application to
discharge a covenant being successful. Whenever a covenant is
stated to affect land, careful consideration of its enforceability
Posted on: 06/04/2017
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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