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At the beginning of the year, we wrote about the Hassan & Osman v Heath (2025) ruling, which demonstrated how restrictive covenants have the potential to prevent, or significantly impact, proposed developments or alterations to a property, even after planning permission has been granted.

A second ruling made by the Upper Tribunal last year, Farrell v Garforth-Bles and Bishop’s Mansions Limited, considered a different scenario. Rather than alteration works to a residential property, this case centred on a modification to a covenant that would allow a change of use for a mixed-use property. The application ultimately failed, again reiterating how difficult it can be to relax or amend a restrictive covenant once it has been written into a title, even where the request might, on the face of it, appear reasonable. It also shows how much weight the Tribunal gives to factors such as the privacy and security of the beneficiaries and the risk of nuisance when deciding whether to allow a modification.

Café culture

The case itself concerned a detached property in Fulham, which was subject to a restrictive covenant imposed in 1983 for the benefit of the neighbouring mansion block. It limited the first floor to residential use only, and the ground floor premises to use as professional offices (while also specifically prohibiting various 'undesirable' uses, which included retail, a restaurant or a snack bar). The ground-floor offices had been let to an estate agent, but the commercial tenancy had come to an end and the property had been vacant since 2023.

Since the restrictive covenant was imposed, not only have coffee shops become more prevalent (and much less 'undesirable'), but a new, more flexible class of use had been introduced, so the property owner applied to the Upper Tribunal for a modification of the covenant to allow a wider range of uses for the property. In the application, they explicitly excluded certain uses which might generate significant noise or nuisance for neighbouring residents, but proposed that the sale of hot and cold non-alcoholic drinks and light food should be permitted between 8am and 7pm.

The modification was objected to by the residents of the mansion block, on the basis that the use of the premises for a coffee shop or café would result in an increase in noise and disturbance, and a decrease in privacy for the residents.

The Upper Tribunal accepted that on a busy mixed-use road in southwest London, one more coffee shop was unlikely to cause significant extra traffic or noise, particularly if the outdoor seating area faced the road. However, the property had a private garden, and following a site visit, the Tribunal felt it would inevitably become a busy space if the property were used as a coffee shop. The property also had a right of way over the communal gardens within the grounds of the mansion block, which could potentially be used by customers, who would then have access to the residents’ private courtyards and sheds. As a result of these factors, the Upper Tribunal concluded that the covenant did in fact protect the residents of the mansion block from nuisance, lack of privacy and security concerns, and did "provide a practical benefit of substantial value or advantage”. The application to have the covenant modified failed.

It's a reminder that even reasonable-sounding modifications can fail if a covenant protects privacy or security, rather than just assuming that noise or the character of the neighbouring area would be the deciding factors.

The benefit of a policy

With so many properties subject to an incredibly wide variety of restrictive covenants, and the use and footprint of properties changing over time, it’s no surprise that they represent one of the most requested legal indemnity policies. As this case shows, the process of modifying a covenant can be protracted, costly and extremely difficult to achieve. Whether your transaction involves an existing property where covenants will be breached by a proposed change of use or development, or have already been breached by a past change of use, our policies can help the matter proceed as an alternative to making an application to the Lands Tribunal (or indeed approaching the benefiting parties to request a deed of release).

Our restrictive covenant policies cover the costs of defending any legal claim against the policyholder in relation to the breach of covenant, and negotiating for a release or modification of the covenants if they are deemed legally enforceable. If the legal defence and any negotiations fail, the policy will also cover the expense of complying with an injunction, any subsequent reduction in market value of the property/land following enforcement of the covenants, and any abortive costs that may be incurred (such as surveyor or architect’s fees).    

Whatever kind of restrictive covenant issue you’re facing, on any type of property transaction, call our underwriters on 01603 617617, email enquiries@cli.co.uk, or sign in to cli.co.uk.