Two recent cases highlight the need for proper drafting when creating covenants that are restrictive in nature and are intended to bind land now and in the future, to ensure that those intended to benefit do indeed benefit.
In Seymour Road (Southampton) Ltd v Williams (2010), a building society originally owned a large area of land which it sold off in plots to various third parties around the time of 1896. One such plot was recently purchased by the claimant.
When the plot was originally sold in 1896, the building society sought to impose a restrictive covenant prohibiting the land from being used a roadway "without the consent of the vendor". Covenants such as this are fairly common, however what the covenant failed to specify was the area of land that was retained by the vendor. We can assume that it is this land that was intended to benefit from the effect of the restrictive covenant, both then and in the future, but in the absence of any reference to such land, the covenant was held to be fundamentally flawed and therefore unenforceable by the current owners of the neighbouring land. Their consent should rightly have been required for the current owner to use the land for anything other than a roadway, had the covenant been properly drafted.
A similar case was Southwark Roman Catholic Diocesan Corp v South London Church Fund (2009). A covenant, this time dating back to 1888, stipulated that the property is only to be used as a place of divine worship. Again, the wording of the covenant failed to accurately specify the land owned by the then owner which was intended to benefit from this covenant. The current owner of the property was therefore free to sell or use the property for any purpose, and the current owner of the land which was originally intended to benefit from the covenant was powerless to prevent such use.
Of course, depending on the content of the covenant, there can be much value in a property having the benefit of a covenant which binds other land detrimentally. This can take shape in a general sense where restriction on the use of neighbouring land can actually maintain or add to the intrinsic value of a property, or in a more literal sense whereby the existence of a troublesome covenant can be used as a bargaining tool for securing monetary gain for its release. What is clear is that it is important to ensure that when drafting new restrictive covenants which are intended to benefit a particular area of land for years to come that the benefiting land is clearly and correct identified to avoid any risk of the covenants being held as unenforceable in the future.
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