One good reason why professional conveyancing is always required is that lurking in the title deeds of a great many properties are clauses that may heavily restrict their development or any future use to which they can be put. One such clause came under close analysis in a High Court case.

A couple had obtained planning permission to demolish their cottage and replace it with a substantially larger home. Their neighbour, however, pointed to a restrictive covenant in the cottage’s title deeds which dated back to 1958, long before the couple purchased the property. The covenant, for all time, forbade erection of any additional building on the relevant land.

The neighbour contended that, on a true interpretation of the covenant, it precluded the couple from erecting any building on the land, whether in addition to or in replacement of the existing cottage. On that basis, she asserted that the planning permission could not be lawfully implemented.

For their part the couple argued that the covenant did not restrict construction of a building to replace the existing cottage but extended only to the erection of buildings additional to the cottage. The neighbour’s reading of the covenant would have the absurd result that they would never be permitted to replace the cottage even if it burnt down or reached the end of its working life.

Ruling on the matter, the Court noted that the law will not rewrite imprudent or ill-advised agreements that have been voluntarily entered into. The couple were bound by the covenant notwithstanding that it was not entered into by them but by a previous owner of the cottage. The first step in interpreting the covenant was to consider the natural meaning of the words used. Surrounding circumstances and commercial common sense were, however, also relevant.

Rejecting the neighbour’s interpretation of the covenant, the Court found it highly unlikely that the former owner who signed up to it in 1958 would have agreed to such a major interference with his rights in respect of his own land. There was a clear expectation that, had such extensive interference been intended, explicit and specific words would have been used.

Preferring the couple’s arguments, the Court found that the natural meaning of the covenant, read in context, was that the former owner promised no more than that he would erect on the land no buildings in addition to – in the sense of ‘as well as’ – the existing cottage. It was not intended to preclude either him or his successors in title from replacing the cottage by way of a substitute building.

In concluding that the covenant was no impediment to the couple’s implementation of the planning permission, the Court also found that it did not prevent alteration or extension of the cottage nor did it place limits on the scale of any replacement building. The Court emphasised that its conclusion did no more than reflect the proper construction of the covenant, having regard to its language and context.

Source: Concious