At the third time of asking, the Upper Tribunal (UT) has granted an application to modify a restrictive covenant to permit a second dwelling to be built on a plot of land.

The land, on which a small partly thatched cottage had originally stood, had been subject to a restrictive covenant since 1987 which largely prevented further building on it. The cottage had been badly damaged by fire in 2007 and much of it had since been demolished. The current owner of the land had twice applied to the UT under Section 84(1) of the Law of Property Act 1925 to modify the covenant, but those applications had been successfully opposed by the owner of a neighbouring house. He made a third application for modification, to which his neighbour and his neighbour's wife, who had become a joint owner of the house since the previous application, also objected.

The neighbours said that when they had chosen to buy their house in 2014 it was obvious that the adjoining derelict property would need to be redeveloped, but they had taken comfort from the existence of the covenant and the protection it offered. The owner of the land had repeatedly sought their agreement to modification of the covenant and they had made clear throughout that they would not want to see two dwellings on the land, nor any larger dwelling that would have an impact on their enjoyment of their house. Their overriding concern was that two houses, of a larger scale than the original dwelling, would more than double the activity on the land and impact heavily on the privacy and tranquillity of their secluded garden.

The UT noted that one of the two proposed dwellings was a single-storey dwelling, screened by a two-metre-high fence and sufficiently separated from the neighbours' house that the impact of noise and intrusion would not be a serious concern. While the change would be noticeable and unwelcome for the neighbours, their garden already had houses on its other two sides, which seemed not to have affected their enjoyment of it. The other proposed dwelling was very close in size to the original dwelling, and its southern elevation had been designed to address the issues of proximity and bulk which were problems with the previous proposals. The absence of basement accommodation on the boundary with the neighbours' house removed another concern raised in the previous decision. The UT concluded that, in preventing the proposed development, the covenant secured practical benefits of value to the neighbours, but not sufficient to be described as benefits of substantial advantage. It considered that the loss in the value of the neighbours' house if the covenant were modified to permit the development would be no more than 7.5 per cent, or £56,250.

The UT was satisfied that the owner of the land had established that the covenant impeded reasonable use of it under Section 84(1)(aa) of the Act, but not that modification would not injure the persons entitled to the benefit of the restriction under Section 84(1)(c). The UT therefore allowed the application for modification of the covenant to permit the proposed development. It assessed the compensation due to the neighbours at £56,250.