[2023] UKUT 189 (LC)

Clause 2(ii) prohibits building over a public sewer, a gas main and a service duct containing electric cables running under the Site, without the Council’s consent; the covenant also prohibits doing anything which may cause damage to those installations. In 2019 the applicant reached agreement with United Utilities for the diversion of the sewer but it still needs the Council’s consent; its scheme involves building over the service duct, for which it also requires the Council’s consent.

Clause 2(iii) prohibits building without the consent of the Council over more than two thirds of the Site or within 10 feet of the side or rear boundaries. The applicant’s proposed development would encroach over that building line. Although the development would just come within the permitted maximum site coverage, the margin is so small that the applicant also wishes to obtain a modification acknowledging that the proposal will not breach the restriction.

Clause 2(viii) is a restriction on use, rather than on works. It prohibits the use of the Site other than for “the said buildings” (meaning, initially at least, the two warehouses); it also prohibits the use of the buildings, without the consent of the Council, other than as light industrial buildings or wholesale warehouses or repositories for any purpose. Although by section 19(3), Landlord and Tenant Act 1927, a qualified leasehold covenant restricting use is subject to an implied condition that consent may not be unreasonably withheld, that condition does not apply where the proposed change of use will also involve structural alterations, as in this case. The applicant therefore needs the consent of the Council to use the Site for its residential tower blocks.

Clause 2(xiii) is a covenant against damaging or removing any trees or shrubs growing on the Site without the consent of the Council’s Estates and Valuation Officer. 49 trees or shrubs will be removed as part of the applicant’s works. It is intended that some of these will be replaced on site and that the applicant will pay a sum to enable more to be planted elsewhere. The intended landscaping scheme has been approved by the Council in its capacity as local planning authority, on the advice of its arboriculturist.

Clause 2(vii), which prevents the applicant from making additions, alterations or improvements to the existing warehouses, or erecting any other buildings, without the consent in writing of the Council, which is not to be unreasonably withheld. If consent is given by the Council the covenant obliges the applicant to carry out the permitted work in accordance with plans and specifications prepared by, and under the supervision of, a registered architect and with materials previously approved by the Council.

Clause 2(x) prohibits the use of any open area of the Site at any time for the open storage of goods or materials without the consent of the Council (not to be unreasonably withheld) and requires the applicant to comply with any conditions subject to which any such consent may be given. It is anticipated that goods will be stored on the Site during the construction of the new buildings, for which the Council’s consent will be required.

Clause 2(ix) is a covenant against the use of the buildings in any manner which the Council may deem to be “a nuisance damage grievance or annoyance” to it or its tenants, or to the owners or occupiers of other property in the neighbourhood, or to the neighbourhood itself. The applicant intends to abide by the usual planning conditions which will regulate the development of the Site but anticipates that its works will be likely to cause some level of inconvenience to those covered by the wide terms of this restriction.

Clause 2(xii) prohibits the deposit or storage of waste material or receptacles for waste so as to be visible from any public footpath street or road. The anticipated planning permission will provide for a comprehensive scheme of waste management while the proposed works are being undertaken and once the new buildings have been completed areas for the storage of waste will be provided within the new buildings. The applicant nevertheless asks for this restriction to be modified.

Clause 2(xvi) prohibits the posting of bills or advertisements on hoardings or on the walls or fences surrounding the Site. It is proposed that, in the short term, site safety notices and marketing advertisements will be displayed which will breach this restriction.

Clauses 2(xxi) and (xxii) are covenants dealing with alienation appropriate to a commercial building but not commonly found in leases of residential buildings. The Tribunal’s jurisdiction to modify these restrictions is in issue, and depends on whether they are restrictions “as to the user” of land. The first prohibits assignment, sub-letting or parting with the possession of the whole or part of the demised premises without the consent in writing of the Council, which is not to be unreasonably withheld or delayed. It also requires that every permitted underlease should contain a similar covenant requiring the consent of the Council to any such dealing. The second requires notice in writing to be given to the Council within one month of any assignment, sub-letting or devolution of any part of the demised premises. Mr Hutchings KC acknowledged in opening the application that this covenant was not restrictive in nature and that the Tribunal had no jurisdiction to modify it, but he maintained that the covenant against subletting without consent was a restriction “as to the user” of the land.