Category Archives: Restrictive Covenants

Very short term lettings breached “private residence” covenant

A long lease contains a covenant “not to use the leased property (or permit it to be used) for any purpose whatsoever other than as a private residence.”

If the long leaseholder advertises the property (a flat) for short term lets and grants a sequence of such lettings, is the leaseholder in breach of the covenant?

In Nemcova v Fairfield Rents Ltd [2016] the United Kingdom Upper Tribunal (Lands Chamber) said to avoid breaching the covenant, there must be a connection between the occupier and the residence such that the occupier would think of it as his or her residence albeit not for ever. “The occupier for the time being must be using it as his or her private residence.”

If the occupier is in the property for a matter of days (rather than weeks or months or years) that is a material pointer to the fact that the occupier is not using the property as a private residence.

To be used as the occupier’s private residence, there must be a degree of permanence extending beyond “being there for a weekend or a few nights in the week.”

Where a person occupies for a matter of days and then leaves the property it cannot be said that whilst occupying they were using the property as their private residence.

The occupation there would so transient that the occupier would not consider the property they were staying in as being their private residence even for the time being.

Each case is depends on it’s facts, relying upon the interpretation of the particular covenant against it’s factual background.

Based on the context in which this lease was granted, and the nature of the proposed relationship between the long lessor and long lessee and taking account the obligations entered into, the appellant had inevitably breached the private residence covenant by granting very short term lettings (days and weeks rather than months).

The tribunal said it was not possible to give a definitive answer to the question posed at the beginning of this piece save to say that ‘It all depends’.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Dispensation for restrictive covenants futile: the dispenser had no power to dispense

There is no point negotiating a dispensation for restrictive covenants on land if the dispenser has no powers to dispense.

In the Upper Tribunal (Lands Chamber) case of Derreb Ltd v White & Ors Re The Huntsman [2015] the property was subject to the following covenant in a 1956 Conveyance:

“The property … shall not be used for any purpose other than as a Sports Ground or for the erection of detached houses for use as private residen[ces] only such buildings to be erected in such a position and in accordance with such plans and elevations including general layout and development plans as shall first be submitted to and approved …. by the Vendor’s surveyor …”

However Clause 2 of the 1956 Conveyance contained a power of release (“power of release”):

“… it shall be lawful for the Vendor (which expression shall be taken to include the estate owner or owners for the time being of property for the time being remaining subject to the trusts of the present settlement or any future re-settlement of the Cator Estate at Blackheath) … [within the current time period] to release any property which has already been sold from all or any of the stipulations or regulations to which it is now subject.”

Derreb relied on a deed dated 27th September 2013 (“the Deed of Release”) whereby the executors of the Vendor described in the 1956 Conveyance tried to release Derreb from the burden of that restriction. The respondents contended that the restriction had not been validly released.

The Tribunal cited the Supreme Court in Arnold v Britton & Others (2015). When interpreting a written contract the court had to infer “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them … to mean” by using that language in the context. The court could only take into account factual circumstances which existed at the time that the contract was made, and which were known or reasonably available to both the parties. The Court must ascertain what a reasonable person, with all the background knowledge then reasonably available to the parties would have understood the parties to have meant. If there are two possible interpretations, the court was entitled favour the interpretation which was consistent with business commonsense.

The key words were those which defined “the Vendor” in the restriction in the 1956 Conveyance. It was an inclusive definition, and not an exhaustive one. In this case, anything falling within the natural meaning of the term “Vendor” in the relevant context could also fall within that definition.

The words “for the time being” in the power of release pointed to the future. The Tribunal interpreted “for the time being” to mean “from time to time”. However the many plot owners deriving title from the Vendor clearly could not exercise the power of release.

“Vendor” did not include the personal representatives who had tried to give the Deed of Release. The express words of the power of release made it clear that the parties to the 1956 Conveyance only intended the power of release to be exerciseable for as long as the trusts of the then current settlement of the Cator Estate (or any successor re-settlement of them) remained in existence. That purpose had ceased to be effective when the Trust ended.

So the restriction remained in place and enforceable by the respondents despite the personal representatives entering into the Deed of Release.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Presence of right of way ruled out any discharge of anti fencing covenant

Clarke & Ors Re 5 and 7 Hillend Lane [2015] was an application under sub-paragraphs (a), (aa), (b) and (c) of Section 84(1) of the Law of Property Act 1925 (“the Act”) to discharge a restriction preventing the erection of fences and other structures on part of amenity land, owned by the applicants, on a small housing estate in Cheshire.

The applicants erected fences in 2012 and enclosed the parcels of land into their domestic gardens. They said that the relevant part of the amenity land had fallen into neglect, and was unused.

The majority of the other residents entitled to use the land objected saying that the amenity land should be kept in common use and that in any event they had a right of way over the land which they had been prevented from exercising by the erection of the fences.

The Upper Tribunal (Lands Chamber) said in the background to the individual considerations under grounds (a), (aa), (b) and (c) was the effect of the easement.

Even if the restriction should otherwise be discharged under an individual ground of Section 84(1) of the Act, that would have been negated by the existence of the easement which would have remained in place even if the restriction had been discharged. The presence of the easement would have led the Tribunal to refuse to exercise its discretion to discharge the restriction in favour of the applicants.

The discharge of the covenant would remove one impediment to the enclosure of the amenity land, but it would not legitimise interference with the objectors’ easement.

In those circumstances it would be inappropriate to discharge the restriction.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Property buyer bore restrictive covenant losses incurred after ignoring solicitor’s belated advice

In Darby & Darby (A Firm) v Joyce [2014] Mrs Joyce bought a house subject to covenants “Not to make any alteration or addition to the exterior or external appearance of the Property [Tamarisk] or the buildings thereon nor to erect any walls, fences or buildings (whether temporary or otherwise) without first obtaining the written consent of the Transferor [the Hoyles]”

Darby & Darby solicitors did not advise her, during their handling of her purchase, as to the existence of the covenants and she began internal and external alterations. Only when the Hoyles had indicated the imminence of injunction proceedings the following December did Darby and Darby tell Mrs Joyce to stop work.

Mrs Joyce ignored the advice suspending work only on the patio causing further wasted expense and her having to pay the costs of injunction proceedings.

Darby and Darby denied liability for those further expenses and costs.

The Court of Appeal agreed.

Whilst Mr Darby had not previously given comprehensive advice as to the effect of the covenants, she had understood the advice he had given her on 10 January. She was being advised to stop work and settle or else face litigation. Albeit he should have sent her away to get independent advice, the advice was good. She elected to reject it. So she was the cause of the injunction proceedings and, their costs.

So the Court of Appeal upheld the solicitors’ appeal against the lower court’s order that they compensate for those further expenses and additional costs.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.