Lesley Hughes & Rachael Reynolds report on restrictive covenants & the power of the lands tribunal
Restrictive covenants affecting development land are common. For a developer, they are obstacles to maximising value—but they are rarely viewed as insurmountable. Money is set aside to buy off those with the benefit of the covenant where known, to obtain indemnity insurance where not or, as a last resort, an application is made to the lands tribunal for the modification or release of the covenant to allow the development to proceed. While developers are generally aware that this third option is dogged by the delay and costs involved, they often assume that once the procedural hurdles have been overcome they will get the order they seek. Is it safe to make this assumption? The recent lands tribunal decision in George Wimpey Bristol Ltd and Gloucestershire Housing Association Ltd [2011] UKUT 91 (LC) provides a clear warning for developers.
The law
The power of the lands tribunal to modify or release restrictive covenants is set out
