Legal: Restrictive covenants preventing sale of property

Brickwork decoration on older propertyThe neighbouring properties of 141 and 141A Dunstans Road in East Dulwich, London, originally formed a single double fronted Victorian home. In October 1983, the home’s owner split the property into two self-contained freehold homes by dividing the building vertically with access through the front garden to the single central front door. The communal hallway then led to the internal access to the two resultant properties.

When one of the properties, 141A, was sold in 1984, its original owner remained in 141 and retained the title to the hallway with its restrictive covenants, which maintained that 141A be: (1) used as a private dwelling house for a single family; (2) allow a maximum of one pet; (3) not to play musical instruments or loud music after 11pm; and (4) not to alter the structure or external appearance of the property or erect walls, fences, hedges or garages without the consent of the owners of 141.

The applicants, Mr and Mrs Richards, purchased 141A in 1999, but claim not to have known about the existence of any covenants. They first became aware of them in 2017, when their existence and ‘unduly restrictive and onerous nature’ caused two attempted sales of their property to fall through, when they were discovered by prospective purchasers who consequently pulled out of the property purchase.

The objectors, Mr Stinson and Ms Hamblin, purchased 141 in September 2017 but say that they too were unaware of the covenants at the time of the purchase and found out about them from Mr and Mrs Richards after the failed sale of their property, 141A.

The objectors originally agreed to release the covenants but, after legal advice, found that there were benefits in having some control over the activities of their neighbours and that they would need to obtain agreement from their mortgage lender. 

Both properties had undergone alterations with planning permission over the years although the changes made to 141A would have been in breach of the convenant. The applicants felt that some of the changes to 141 had adversely affected them, and said they had installed sound-proofing to mitigate noise that intruded upon their enjoyment of their property.

Speaking on the applicant’s behalf, an estate agent maintained that the restrictions on the property had a negative impact on its value and saleability, particularly as the loft space could not be converted into a three bedroom house, as was typical of other similar properties in the area. 

The applicants applied for the discharge or modification of the restrictive convenants on their freehold property imposed by the transfer dated July 1984 under s. 84(1)(a) and (c) of the Law of Property Act 1925.

The objectors argued that the covenants protected them from ‘increased noise, odours and flow of people’ that could result in their annoyance or disturbance, as well as the possibility that the property might become a house of multiple occupation.

The Tribunal disagreed with the applicants’ claim that the fact the original owner no longer owned the property made the restrictions obsolete, or that the neighbours would not suffer any injury if they were discharged. However, it concluded that there would be no injury to the neighbours if it allowed the majority of the covenants to be modified so that the neighbours’ consent to the various restricted activities should not be unreasonably withheld, and ordered restrictions (2), (3) and (4) to be amended.

If you’re thinking of purchasing a home that has been subject to modification, ask a Chartered Surveyor for advice, and clarify via your conveyancer that no restrictions are in force that may adversely affect either your property purchase or its later saleability.

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