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Federated Homes v Mill Lodge Properties [1980] 1 WLR 594

By Oxbridge Law TeamUpdated 04/01/2024 07:18

Judgement for the case Federated Homes v Mill Lodge Properties

KEY POINTS

  • A party must demonstrate that they have the "benefit" of the restrictive covenant in order to have it enforced. This signifies that they must be the party who was originally intended to gain from the agreement.

  • The party against whom the covenant is enforced also bears the "burden" of the covenant, which necessitates that they be the ones who the covenant was meant to restrict.

  • As it will be noted, the plaintiff was a tenant of only one of the four dwellings that benefited from the covenant, therefore the covenant was impliedly applied to every portion of the land and not just to the whole.

FACTS

  • The Buckinghamshire County Council granted Mackenzie Hill Ltd. outline planning approval in 1970 to build a plot for homes and amenities, including the blue land. The planning license contained restrictions on the number of residences, time frames, and approvals.

  • In order to develop the land, Mackenzie Hill and the Newport Pagnell Urban District Council entered into a phased agreement that included provisions for the sale or transfer of the development rights.

  • Covenants pertaining to the rate of development were also a part of the phasing agreement. The blue land was subsequently sold by Mackenzie Hill to Mill Lodge per the terms of the phasing agreement.

JUDGEMENT

  • Appeal dismissed.

COMMENTARY

  • This case emphasizes the necessity of exact and unambiguous restrictive covenant drafting and the significance of comprehending the legal ramifications of such covenants in real estate transactions. To prevent legal conflicts, parties engaged in real estate development or purchasing should carefully assess the enforceability and applicability of restrictive covenants.

ORIGINAL ANALYSIS

  • Defendant purchased land from X subject to a covenant that “the purchaser” would not build above a certain density, so that X would still be able to build easily on the land that X retained.

  • X sold to Plaintiff who sought to enforce the covenant.

  • CA found for Plaintiff, saying that even in the absence of express words, s.78 LPA 1925 had the effect of annexing the benefit of the covenant to the land. 

Brightman LJ

  • Providing the covenant in question related to the covenantee’s land, the section annexed the benefit to the land. 

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987 total pages
1286 purchased

Land Law notes fully updated for recent exams at Oxford and Cambridge. ...