What is a Restrictive Covenant?
Restrictive covenants are binding obligations that are written into a property’s deeds that determine what an owner is or is not able to do to their property. They can cover a wide range of issues, but the most common examples tend to include:
- preventing the covenantor from making alterations to a property e.g. building an extension or converting a house into flats, or
- preventing buildings or other substantial structures from being erected on a piece of land.
These covenants often make provision for the covenantee, who has the benefit of the covenant, to consent to the proposed work and often such consent cannot be unreasonably withheld.
What considerations is the covenantee able to take into account when considering whether or not to give consent?
Withholding approval on grounds that the proposed works will damage the structure or integrity of the covenantee’s property, or that the proposed works will amount to a loss of privacy or light are fairly common, but what about aesthetics?
Can a covenantee refuse consent on the basis of aesthetics?
The Court of Appeal has provided some useful clarification in the case of 89 Holland Park (Management) Limited -v- Hicks  EWCA Civ 758.
The Respondent, Ms Hicks, is an award-winning architect and owns a plot of land (‘the plot’) at the rear of 89 Holland Park on which she wished to build a house. The plot is however bound by a restrictive covenant which prohibits the making of any application for planning permission in respect of any plans, drawings or specifications until they have been approved by the freeholder of 89 Holland Park (‘the Company’). There had been previous litigation between the parties where the Court determined that the above-mentioned approval could not be unreasonably withheld.
She sought approval for the construction of a single storey entrance pavilion, which was described by the Company as being a glass cube structure, located at the eastern end of the plot, leading to a subterranean structure that covers most of the plot. Natural light was to be provided by a series of skylights and light wells. The design was uncompromisingly contemporary, and it was common ground that it shared “… none of the design language of the listed buildings of Holland Park …”. The planning inspector who granted planning permission described the entrance pavilion as being “more noticeable at night as a gently glowing glass box” that was “… a somewhat unusual feature”.
Consent was refused on 4 grounds: (1) “Architectural design, aesthetics and heritage”, (2) “Trees”, (3) “Loss of amenity during the Works” and (4) “Construction Issues”.
High Court decision
The judge held that the Company was only entitled to take into account matters that affected its own reversionary interest and that it was as such not entitled to take into account any interest of the leaseholders and it could not make aesthetic objections as the design albeit “uncompromisingly contemporary” had no impact on the Company’s reversionary interest in the flats. In light of this, the High Court did not consider whether refusal on aesthetic grounds was reasonable or not.
The High Court however held that the Company’s concerns with regards to the possible structural impact on the flats was legitimate and ordered that those issues had to be resolved before the Respondent could commence the building works.
Court of Appeal decision
The Company appealed the decision. The principal issue for the Court to determine in the appeal concerned the grounds that would be considered permissible on which the Company would be entitled to withhold consent.
The Court of Appeal held that the restrictive covenant also benefitted the leaseholders and that if the Company was not able to take their views into account it would render the covenant “almost worthless”.
The Judge went on to say at paragraph 49 of the Judgment:
“In my judgment relevant “property interests” in connection with a covenant of this kind go further than a mere interest in bricks and mortar or the capital or rental value of property. As well as trading interests, they would include the amenity value of the right to enjoy the property in question.”
The court decided that the Company could refuse consent on aesthetic grounds as it would be extraordinary if it could not take into account what a proposed building would look like. The Court of Appeal held that a refusal on aesthetic grounds was a potentially valid reason for refusing consent but that the reasonableness of the decision would need to be considered.
The Court of Appeal remitted the matter back to the High Court for the judge to consider whether the aesthetic reasons were reasonable ones.
It is clear from this case that it is might be possible to object to a neighbour’s proposed works on aesthetic and environmental grounds but that such refusal has to be reasonable and will no doubt be dependent on the facts of each particular case.
If you have any queries concerning restrictive covenants, problems with your lease or property disputes generally please contact our expert team on 0118 959 7711 who will use their in-depth knowledge to provide you with sound, pragmatic advice.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.