Federated Homes Ltd v Mill Lodge Properties Ltd
Section 78 of the Law of Property Act 1925 automatically annexes the benefit of a restrictive covenant to the land it benefits.
Facts
A developer sold part of a site to Mill Lodge Properties, which covenanted not to build more than 300 houses on it, so as not to reduce the planning permission available for the remaining land retained by the developer. The retained land was later sold to Federated Homes. Mill Lodge then obtained a new planning permission and proposed to build more than 300 houses. Federated Homes sought an injunction to enforce the covenant.
Legal principle
The Court of Appeal held that Federated Homes was entitled to enforce the covenant. Brightman LJ said that section 78 of the Law of Property Act 1925, which provides that a covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title, has the effect of annexing the benefit of the covenant to the land, so that it runs with every part of it. It was not necessary for the covenant to state that it was for the benefit of the land, or for the benefit to be expressly assigned. The decision was controversial, but has been followed.
Related cases on freehold covenants
- Alexander Devine Children's Cancer Trust v Housing Solutions Ltd [2020] UKSC 45, [2020] 1 WLR 4783
- Austerberry v Oldham Corporation (1885) 29 Ch D 750
- Re Ballard's Conveyance [1937] Ch 473
- Bath Rugby Ltd v Greenwood [2021] EWCA Civ 1927
- Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410, [2004] 1 WLR 2409
- Elliston v Reacher [1908] 2 Ch 374
- Halsall v Brizell [1957] Ch 169
- Haywood v Brunswick Permanent Benefit Building Society (1881) 8 QBD 403
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