Upper Tribunal overturns restrictive covenant in planning agreement
Can a developer overcome a restrictive covenant contained in a planning agreement made under Section 52 of the Town and Country Planning Act 1971 (now repealed)?
In the case of Payne and others v Maldon District Council  UKUT 335 (LC), the Upper Tribunal held it could.
The Upper Tribunal decided that a restriction contained in a Section 52 Agreement (the predecessor to Section 106 Agreements entered into pursuant to the Town and Country Planning Act 1990) which prevented the erection of any permanent buildings or structures at any time could be modified to allow a development for which planning permission had been granted to erect 30 dwellings.
This was on the basis that Section 84(1) (aa) of the Law of Property Act 1925 applied – i.e. the restrictive covenant would impede some reasonable user of the land for public or private purposes and did not secure any practical benefits of substantial value to the council.
Developers should note the following key points:
- the Upper Tribunal only has jurisdiction to discharge or modify a restriction made pursuant to the Town and Country Planning Act 1971 made before 25th October 1991
- an application to the Upper Tribunal cannot be made for positive covenants
- whilst helpful the grant of a planning permission is not conclusive that the Upper Tribunal will find in a developer’s favour (any application could cost thousands) and thorough due diligence to flush out any restrictive covenants is paramount
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