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A limited company is the owner of a strip of land (A) within…

A limited company is the...
A limited company is the owner of a strip of land (A) within England. This land is potentially restricted by covenants dating to the 19th century. The covenant requests that no excavation is made within land (A) so to not dimish service supply to what was once a functioning piece of industrial machinery on another strip of land not owned by our limited company.These covenants serve no use or function as of 2017, nor have done for over 50 years, due to the industrial machine have been demolished/closed within the past 100 years.Upon application to cancel the restrictive covenant to HMLR, we are informed that the application cannot be entertained as applied for due to the following reasons:A. It is insufficient on its own to remove the covenants due to the machinery which had the benefit of the covenant being demolished.
B. HMLR can only entertain the application if one can precisely identify all of the benefitting land and then get the respective owner to join in a Deed of Release.HMLR acknowledges that due to the date of the deed, this may be difficult to do (1800-1900).HMLR suggests we may also want to consider to apply for an order of the Upper Tribunal (Land Chamber).-My questions therefore are:
A. Why is the fact that the machinery for which the covenant was invented/applied, that now no longer exists, not considered to be sufficient in itself to nullify it?
B. Is there an alternative method to cancelling it that may be a suitable and cost effective path to achieve the same measure?We do not believe this will stop development for reasons that are quite obvious to those familiar with the case. But in light of good practice we are hoping to cancel said restrictive covenants regardless.Kind regards.
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Customer reply replied 10 months ago
Please note that i believe the property which benefits from the covenant, is now owned by 1 person or company, but I am keen - whereever possible - to avoid ringing a bell to attract attention to the removal of said covenant as development can often kick up unwarranted negative coverage.
Answered in 1 day by:
9/11/2017
Joshua
Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 26,070
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

Do you have a copy of the title document you can upload?

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Customer reply replied 10 months ago
Hi Joshua,Yes, I do, will it only be visible to the two of us though (contrary to the general public)?

This thread is not secure so privacy is not guaranteed. I can let you have my email address if you prefer? The only downside is that communicating by email is treated as a "premium service by the site" but I can specify the minimum fee which is about £3 so as not to substantively increase the cost to you. Do let me know if I can assist any further.

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Customer reply replied 10 months ago
That is fine, I'm able to pay the £3 fee.

I'll send over an offer in a few moments...

Joshua
Joshua, Lawyer
Category: UK Property Law
Satisfied Customers: 26,070
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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Customer reply replied 10 months ago
Just went from £3 - £5, but in light of time I have sent it regardless.Emailing you now, thanks.

Many thanks - my email address should be visible. If you can kindly drop me an email with the document attached?

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Customer reply replied 10 months ago
Hi joshua, I have sent you an email with 2 x attachments. Best

Many thanks. For the avoidance of doubt, the covenants you refer to are those set out in entries 1 and 2 of the charges register?

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Thanks. There are only a number of ways in which restrictive covenants can be removed. The only relevant ways here will be by way of an express release from the beneficiary of the covenant or by way of an application to a Upper Tribunal under the Law of Property Act 1925 for an order that the covenants are released on the grounds they are obsolete because of a change n character of the burdened land and/or that they are impeding the reasonable use of the land.

However such application can take upwards of 3 months even if uncontested and much longer if they are contested.

The wording of the covenants does not satisfy the test laid down in Crest Nicholson v McAlister so as to give rise to statutory annexation. In other words the wording of the coventnats at entries 1 and 2 does not appear sufficient to bind you as a successor in title because in particular it dos not identify the land which is to benefit from the covenant. Accordingly they are unlikely to bind any persons beyond the original parties at this point because the above decision decided that in order to bind successors i title, amongst other things the wording of the covenant had to identify the benefiting land. Acordingly an application to the Upper Tribunal is unlikely to be worthwhile as the covenants are no likely to be enforceable.

If you are considering significant development at the property you may wish to consider a bespoke indemnity insurance policy from a broker such as CLI or GCS which will cover any potential minor risk and smooth out any issues a buyers solicitor may raise. Such a policy should be obtainable for a one off premium of low to medium triple figures for a single dwelling development with incrementally higher premiums for each additinal dwelling.

You will have noted there are further restrictive covenants contained in a deed at entry 3 of the charges register which would need to be examined to confirm what further covenants bind the land in addition to the above.

Is there anything above I can assist you with any further?

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Customer reply replied 10 months ago
Thanks Joshua,For the avoidance of doubt:
can you confirm that the beneficiary of the covenant is the current owner of the site plot which contained the former mill?"However such application can take upwards of 3 months even if uncontested and much longer if they are contested."
Is the right to contest, limited to the owner of the plot of land which contained the mill only, or is the general public able to contest?For the avoidance of doubt:
"it does not identify the land which is to benefit from the covenant. "
It identifies the name of a former local mill, since demolished/made redundant. I have little doubt in knowing that you noted this, therefore is the covenant not sufficient per Nicholson v McAlister because it does not refer to the original plot boundary but rather just the location of a mill?

Only parties who claim to benefit from the covenant can contest the claim. Members of the public can given evidence as part of any proceedings but the Tribunal cannot extend the covenant to benefit parties that do not already benefit from it.

The wording of the covenant does not coform to the tests laid down by Crest Nicholson. You are of course correct to sat that the Mill is mentioned, but it is not mentioned as being the land that benefits from the covenant. Rather it is referenced as being the subject of the covenant. In order for a covenant to be beinding upon successors in title the covenant has to be expressed to be for the benefit of land with a sufficient description to be able to readily identify it. Neither of these covenants contains such preambles. It would be a departure for any court to infer that the covenant suffices the tests laid down in Nicholson but there is always a risk with regard to any litigation, hence my suggestion that you consider an indemnity insurance policy which may be a better use of your time and money than an application to a Tribunal for removal of a covenant which action would likely preclude your being able to obtain indemnity

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Customer reply replied 10 months ago
Thank you, ***** ***** development figure will be circa 40. Therefore I expect the insurance costs will be significant. What are the approximate costs for a Tribunal?I am also weighing up proceeding with development and just acknowleding that no attention need be paid to cov.1 & cov.2 due to these discoveries and the redundant nature of them.I am happy to close the thread following this unless you have further advice which i would of course welcome.

May I clarify - £40K or £40m?

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Customer reply replied 10 months ago
40 units.

Do you have an estimate of development costs? I assume you have checked the other deed I refer to to confirm what further restrictive covenants are in place? Have you obtained a quote for indemnity insurance?

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Customer reply replied 10 months ago
1. Yes, £10m.2. I will forward you other covenants as fyi now. You can extend your quote if necessary.3. We have only tendered/requested basic derelict land insurance at present; very early in process still.
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