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Modifying Restrictive Covenants Leads to Unlocking Value

Andrew Francis, Barrister, Serle Court Chambers, Lincoln Inn, Comments

One of the skills which any investor in real property must have is the ability to see the potential in land. Such potential may be present in a number of ways, but this article focuses on the potential to change the use of land despite the presence of restrictive covenants which would otherwise inhibit change.

The law of restrictive covenants is a complex one, inhabiting an uncomfortable berth between land and contract law, rules of equity and legislation which is nearly 100 years old. This article cannot explain that law. It will be assumed that the hypothetical investor will have been advised that there are binding covenants on the land which are enforceable by neighbouring land owners. But the covenants prevent the proposed development, which has planning consent. If it can be carried out, the net development value will be in the millions of pounds. How can that value be unlocked?  

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