This case concerned the jurisdiction of the Upper Tribunal to modify restrictive covenants in leases under section 84 of the Law of Property Act 1925. Under this section, the Tribunal can modify freehold covenants and also restrictive covenants affecting leasehold property where the term of the lease was for more than 40 years and 25 years of that term have expired.
The applicants owned two flats in a block of four flats. One of their flats was above the other flat and the applicants wanted to combine the two flats into a single, larger property. The applicants wanted to modify two covenants in their leases – one was a covenant not to permit any encroachment or easement to be made on the demised premises and the other was a covenant to use and occupy the premises solely and exclusively as a self-contained residential flat. For the development to proceed, the applicants needed both these covenants to be modified and a neighbour in the block objected.
Another issue was that, at some time between 1980 and 1988, the ground floor flat had been extended through the addition of a kitchen and a conservatory. In 1998, the lease of the ground floor flat was varied to give the leaseholder a right to park at the front of the block. The deed of variation included a new plan showing the area over which this parking easement could be exercised and the extension to the flat and it was also provided that this newer plan should replace the plan attached to the lease.
The neighbour’s objection was two-fold. By extending the demise of the flat, through the inclusion of the new plan, the 1998 deed of variation had brought about a surrender and regrant of the lease bringing a new tenancy into existence, of which fewer than 25 years had expired. Secondly, the user covenant was positive (as opposed to a negative covenant) It was argued that these reasons meant that the Tribunal did not have the jurisdiction to modify the clauses.
The Tribunal rejected both these submissions. The deed of variation simply added a right to park and did not extend the demise of the flat. Accordingly, there was no implied surrender and regrant of the lease so the time requirement affecting leasehold covenants was still met. The Tribunal also found that the user covenant was a negative obligation and so fell within the ambit of section 84.