Discharging or modifying a restrictive covenant

Introduction

To discharge or modify a restrictive covenant, there are two main options:

1. express release (non-statutory route)
2. application to the Tribunal (statutory route) – the focus of this factsheet

 

Eligibility

1. Freehold owner
2. Leasehold – for leases originally granted for minimum 40 years, of which at least 25 have expired
3. Other contractual interest

 

Type of covenant

This procedure can only be used for restrictive covenants – restricting the landowner's use of the land / buildings.
It cannot be used for positive covenants, such as those requiring action or expenditure.

 

Section 84(1) Grounds

There are specified grounds in section 84: 

• Ground (a) - the restriction ought to be deemed obsolete
  Due to changes in the character of the property or the neighbourhood or other material reasons.

• Ground (aa) - reasonable use of the application land that is impeded by the restriction
  The restriction impedes the reasonable use of the property for public or private purposes:
  • where it does not secure practical benefits of substantial value or advantage to those entitled to benefit; or
  • it is contrary to the public interest; and
  • money is adequate compensation for any suffering from the discharge or modification.

• Ground (b) - express agreement to discharge the restriction
  Need to demonstrate that the beneficiaries of the restriction have agreed.

• Ground (c) - any matters relied on as showing that there would be no injury
  Need to demonstrate that the proposed discharge or modification will not injure beneficiaries of the restriction.

 

Tribunal's powers

In addition to discharge and modification, the Tribunal may add new restrictions on use, if agreed by the applicant.

 

Court declaration

Separately, a court application can be made for a declaration under section 84(2) if a restriction is ambiguous or to declare who may enforce a restriction.

 

Application – Evidential Burden

The following documents are required for an application:

• address, description and plan (where possible) of both: (1) the land subject to the restriction which the application relates to; and (2) the land which enjoys the benefit of the restriction
• identity (if known) of the beneficiaries
• 84 grounds relied on by the applicant, with reasons
• if modification is sought, to what extent, or if discharge is sought
• whether any planning application has been made in the last five years and the result
• copy of the instrument imposing the restriction

We are happy to advise further on any particular matters where you are interested in seeking discharge / modification of restrictive covenants.