Clarion Housing Association Limited v VC Chitty & Ors

A restrictive covenant limiting land to an old persons’ warden scheme was not obsolete merely because that form of accommodation was no longer financially viable for the owner. Obsolescence under section 84(1)(a) of the Law of Property Act 1925 depends on whether the covenant’s objectively assessed purpose can still be achieved.

However, a restriction impeding reasonable general residential development may be modified under section 84(1)(aa) where it secures no practical benefit of substantial value or advantage for those entitled to enforce it. The relevant comparison is between development subject to the restriction and development free from it, rather than between development and an empty site. A consent covenant was obsolete where the original vendors were dead and its purpose could no longer be achieved.

Clarion Housing Association Limited, the owner of a cleared former warden-controlled housing site at Wrotham, applied under section 84 of the Law of Property Act 1925 to modify a use restriction and discharge a covenant requiring the original vendors’ written consent to building works.

The use covenant permitted only an old persons’ warden scheme. Clarion had planning permission for 38 general residential units. Local residents objected, principally on the basis that the covenant preserved accommodation for older people and protected neighbouring amenity and value.

The Tribunal considered whether the covenants were obsolete under section 84(1)(a), and whether the use restriction impeded a reasonable use while securing no practical benefit of substantial value or advantage under section 84(1)(aa).

1. Application allowed. The Tribunal discharged the consent covenant in clause 2(b) and modified the use covenant in clause 2(a), so that the land could be used only for residential and ancillary purposes. No compensation was awarded.

2. The use covenant was restrictive, not positive. Its negative language prevented use for purposes other than an old persons’ warden scheme; it did not oblige the owner to provide such accommodation. An expectation that the site would be used for older persons’ housing could not alter the covenant’s legal effect.

3. Applying the approach in Re Truman Hanbury & Buxton & Co Ltd’s Application [1956] 1 QB 261, a covenant becomes obsolete under section 84(1)(a) only when relevant change means that its original purpose can no longer be achieved. The purpose of clause 2(a), assessed objectively, was to prevent uses thought objectionable in the village centre. That purpose remained capable of achievement and the covenant remained enforceable. It was therefore not obsolete merely because a viable warden scheme was unlikely to be developed.

4. Clause 2(b) was obsolete. Its purpose depended on consent from the original vendors, who had died and could no longer give it.

5. The proposed general residential development was a reasonable use and clause 2(a) impeded it. The restriction secured no practical benefit of substantial value or advantage. The proper comparison was between housing for older people and the permitted general residential scheme, not between the scheme and the cleared site. The proposed buildings broadly replicated the former development’s scale and massing, and the evidence did not establish a material adverse effect on neighbours’ amenity or property values. The Tribunal therefore had jurisdiction under section 84(1)(aa) to modify clause 2(a).

not stated in the judgment.