Restrictive Covenants: Modification of restriction where objectors had concerns about future loss of amenity (Hodgson and another v Cook and others – 2023)

Where a landowner wishes to modify a restrictive covenant affecting their property for the purposes of running a business from home, could the application succeed where objections were raised regarding potential future loss of amenity and the loss of certainty in respect of the remainder of the development?

The background

In Hodgson and another v Cook and others [2023], the applicants owned a property on a residential estate and wished to set up a beauty business in a cabin in their rear garden. A retrospective planning application was made for change of use to mixed use residential after the cabin had been installed and the business commenced trading.

The transfer for the property contained a restrictive covenant that “no trade business or profession is to be carried out upon the plot, and the plot is not to be used for any other purpose other than as one private dwelling”.

Neighbours objected to the planning application, arguing that the proposed use was unreasonable and stating that they enjoyed the benefit of the restrictive covenant in maintaining the amenity, prosperity and ethos of the wider estate. Objectors claimed that any suggestion they had agreed to the modification of the covenant was untruthful and misleading, that modification of the restriction would injure those parties with the benefit of it, and stated that the business had already resulted in a great deal of stress citing loss of privacy, traffic and parking issues.

A recommendation was made that permission be granted, subject to restrictions. The Upper Tribunal was asked to consider whether the restrictive covenant should be modified.

The decision

The Upper Tribunal dismissed the application, concluding that the restrictive covenant should not be modified.

The Tribunal considered the intention behind the covenant. Whilst the restrictive covenant did not prevent a homeowner working from home on their own in the property on occasion, in circumstances where commercial activity was generally carried on elsewhere, in this case the applicant’s business was conducted entirely from the cabin. The restrictive covenant prohibited this activity.

In considering the loss of amenity, the parties differed considerably. While the applicants considered the noise and parking of vehicles arising from their business use to be within expectations for a residential housing estate, this was a key area of concern for the objectors and had caused much animosity. The applicants had not requested that clients park on their driveway, but the planning officer anticipated that this would be the case and did not consider issues relating to parking on the pavements or roads of the estate.

The restrictive covenants imposed on properties on the estate were intended to support consistent estate management. By controlling these changes, restrictive covenants which prevented commercial uses secured the estate’s appearance and prevented issues raised by the presence and parking of too many vehicles.

The Tribunal concluded that business use had not been intended for properties on the estate, and that all homeowners benefited from the restrictive covenant by way of certainty over future development or usage. By modifying the covenant, this precedent may lead to concern over further loss of amenity in future. The applicants had accepted the restrictive covenant less than ten years beforehand; any argument for modification of such a recent covenant must be strong, but this was not the case here and the Tribunal dismissed the application on public interest grounds.

Advice and action for landlords

A helpful judgment for landlords and managing agents of newer housing developments, this decision supports consistent estate management practices by way of restrictive covenants on transfer.

Relied upon by others on an estate with the benefit of the restrictive covenants, modern developments are often controlled in such a way as to preserve the appearance, amenity and value of properties on the estate. To modify such a recent restriction sets a potentially risky precedent across the estate, conflicting with developer intentions, potentially in breach of a developer’s planning permissions for the construction of the estate, and removing the reassurances and benefits of the covenant enjoyed by other homebuyers.