The recent case of Bath Rugby Ltd v Greenwood & Ors v Bath Recreation Ltd saw Bath Rugby Club (the Club) successfully appeal a longstanding restrictive covenant that could have prevented their highly anticipated redevelopment plans.
The Club has a long lease of part of the land known as the ‘Rec’ where the Club’s stadium is located. The Club wished to redevelop the site for the purposes of creating a larger stadium with an 18,000-seater capacity and improving their facilities.
However, the Club’s plans for redevelopment were seemingly thwarted when it became apparent that the original conveyance of the land in 1922 contained a restrictive covenant as follows:
“nothing shall be hereafter erected placed built or done upon the said hereditaments and premises including such part thereof as last aforesaid which may be or grow to be a nuisance and annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood”.
In order to begin the development of the site, the Club set out to obtain a declaration from the court, pursuant to s84 of the Law of Property Act 1925, that the covenant was unenforceable and not binding on the Club. This was because they argued that the land intended to benefit from the covenant was not certain and so the covenant was not binding via annexation. As the covenant was made prior to the Law of Property Act 1925, it meant that it had to be shown that the covenant was annexed to the land through the wording of the covenant itself in order to be binding on successors in title.
To the dismay of the Club, owners of the neighbouring premises argued that their property had the benefit of the restrictive covenant by annexation. The High Court agreed and found that there was an intention to benefit the particular land and the land was identifiable due to being sufficiently described. The High Court held that the local residents were entitled to the benefit of the covenant as the land in question could be classed as “the neighbourhood” in accordance with the wording of the restrictive covenant.
However, the Club decided to appeal the decision and the High Court’s decision was overturned. The Court of Appeal decided that the wording of “adjoining premises or the neighbourhood” did not sufficiently identify the land that was to benefit from the covenant. The term “neighbouring” was not a conveyancing term and the court felt it impossible to determine the properties that constituted “neighbourhood” as it was “inherently imprecise.” As a result, the requirements for annexation had not been met and the covenant was, therefore, unenforceable.
This case highlights the importance of seeking expert legal advice when making changes to property such as to its use or development work. If there is an enforceable restrictive covenant affecting the property in question and development work has commenced then a developer could be prohibited from continuing with the work or even required to demolish the work by order of the court, which can be costly and time consuming.
If you require specialist legal advice on restrictive covenants which affect land that you intend to purchase or develop, please contact our experienced commercial property team on 0845 287 0939, by email or via our online chat below.