Looking to build a house or stop someone else building? Think about the ‘Rec’!

Bath Rugby Club’s famous ‘Rec’ stadium may not be the first thing you think of when planning a building project, but a recent court case has thrust it into the spotlight and made it essential knowledge for anyone who is seeking to develop land or is affected by a proposed development nearby.

The Club holds a long lease of the Rec site that is subject to covenants imposed by a transfer of the land back in 1922. A restrictive covenant bound all successors to the land not to build or do anything which ‘may be or may grow to be a nuisance and annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood’. As restrictive covenants prevent landowners from acting in a certain way on their land, if that covenant is enforceable, the Club would not be allowed to build their ambitious new stadium and their regeneration plan could be completely blocked.

Who should be concerned about restrictive covenants?

Any land might still be burdened by restrictive covenants, no matter how old those covenants are. They always bind the original parties who agreed them, but can still bind successors in title many years in the future if they are annexed to the relevant land so that both the burden and the benefit of the covenant pass on every sale.

In practice, that means anyone trying to claim the benefit of a restrictive covenant has to show that the covenant has (i) bound successors in title on both sides; and (ii) clearly identifies the land to be benefited, in a way that means it can be identified now. Anyone trying to develop land burdened by restrictive covenants has to argue the covenant has not bound successors or that the benefiting land cannot be identified if they want to prove the covenants are unenforceable.

Why is the Bath Rugby case important?

The Bath Rugby case has clarified the law on identifying benefiting land. The Club applied for a declaration that the 1922 covenant was unenforceable because the benefiting land could not be identified and the Court of Appeal agreed.

As the transfer did not include any plan showing the land that was to benefit, the wording of the covenant was crucial and it wasn’t specific enough. The defendants argued that it had to be intended to benefit other land still owned by the seller in 1922, but the Court looked at the whole of the transfer document and said it did not support such a wide interpretation of the wording ‘adjoining land and neighbourhood’. There was no evidence that it was meant to include the seller’s other land or anything to indicate what constituted the ‘neighbourhood’. Without any means of identifying the benefiting land, no-one can enforce the covenant and the Club is free to progress its new stadium.

The decision underlines the importance of the specific context and evidence.

Practice points

Many historic restrictive covenants are potentially still enforceable. Do not overlook them because of their age. If you are planning a development (however small) check your title carefully and scrutinise the wording of covenants and historic transfers to see if any restrictions might still be enforceable. Much will depend on the facts, so seek legal advice early to avoid wasting time and costs. If you are looking to object to a local development, it may be worth checking if you might benefit from any restrictive covenants.

If covenants are still enforceable, there is no need to panic. You can apply for restrictive covenants to be modified or discharged on several grounds, including that they are contrary to the public interest and would stifle reasonable use of the land. Again, each case will turn on its facts, so seek professional advice early to ensure your development plans are not derailed.