When faced with a restriction on freehold and sometimes leasehold land, there are certain circumstances in which the owner of the land may seek to have a restrictive covenant modified or removed. The process of modification or removal involves making an application to the The Upper Tribunal (Lands Chamber). The applicant must satisfy one of the statutory grounds on which a restrictive covenant may be discharged or modified. 

The statutory grounds for removal or modification are the following: 

  1. That the covenant is obsolete;
  2. That the covenant impedes the reasonable use of the land; 
  3. The modification or removal would not injure those who are entitled to benefit from the restriction; or
  4. Where all parties who benefit from the covenant give their consent to its modification or discharge. 

If the Upper Tribunal is satisfied that one of these grounds are met, the Tribunal must then decide whether they will exercise their discretion to make the change that has been requested. 

This process was examined in the recent case of Blackhorse Investments (Borough) Ltd v London Borough of Southwark [2024] UKUT 33 (LC). The applicant was the leaseholder of a pub which was to be closed down, demolished and re-constructed as a mixed-use building. The applicant applied to the Tribunal to vary the leasehold covenants that required the property to be kept open and to be used as a pub, and the restrictions against alienation and alterations. The applicant also wanted to be released from their obligation to use their best endeavours to renew licences. 

The Upper Tribunal initially ordered that the covenants be modified and the property was demolished on that basis. However, the respondent disputed the Upper Tribunal's jurisdiction on the grounds that the covenant in relation to alienation, keeping the pub open and the covenant to renew the licences were positive in nature and the Tribunal accordingly did not have jurisdiction to modify them. 

The Upper Tribunal issued a new order that modified the covenants only to the extent permitted. 

This case serves as a useful reminder that it is not always easy to establish whether a covenant is truly restrictive in nature and that a landowner cannot simply rely on the Tribunal agreeing to modify the covenants that affect their land.