The right moral outcome or legal – restrictive covenants

When restrictive covenants are in place, there can be challenges around land development projects or even just small changes.

Housing Solutions sought the development of 13 new affordable houses. The children’s charitable trust wanted to ensure terminally ill children could enjoy privacy and use of the hospice’s own grounds.

The case (Alexander Devine Childrens Cancer Trust -v- Housing Solutions ltd [2020] UKSC45.02.011.2020 Supreme Court) was regarding ‘restrictive covenants’ over land.

In 1972 a farmer sold his agricultural land to a company. This was the ‘application land’ and the company already owned the adjoining land ‘unencumbered land’, which, together formed a single rectangular plot to be used as a  ‘housing site’.

The restrictive covenants on the Housing Solutions’ land are:

1. No building structure would be built on the application land; and 
2. the application land would only be used for car parking

However, complications arose when the farmer’s son later inherited the land adjacent to the housing site and in 2012 he gifted part of his land to the children’s hospice trust

The developer, Millgate, then acquired the housing site in full knowledge of the covenants and applied for planning to build 23 affordable houses, 13 of which would be built in breach of the known restrictive covenants. Some of the houses would overlook the trust’s planned gardens and wheelchair walk.

Planning permission was obtained several months later. Mr. Smith wrote to Millgate objecting to their plans, however, Millgate continued regardless.

Millgate agreed, on completion of the development, to sell the land to Housing Solutions. Millgate then applied to the upper tribunal to modify the restrictive covenants.  Mr. Smith and the Trust objected and the Supreme Court unanimously agreed therefore housing solutions were not able to proceed to modify the restrictive covenants and were bound by them.

The decision provides interesting commentary weighing public interest, on the one hand preventing the development of 13 affordable units, with the need for the hospice to provide a sanctuary for children dying with cancer, and the restrictive covenants that protected this.

If you are purchasing land for development,  please get in touch with the Hibberts team for the best legal advice