Holiday Homes

20 March, 2015

A recent case has highlighted that when looking at restrictive covenants, local authority planning decisions are a separate regime and may come to a different conclusion to a court or tribunal.

The applicant owned a holiday chalet bungalow on an estate in the Isle of Wight. Occupation of the chalets on the estate was limited, by (1) a planning permission and (2) a restrictive covenant. The covenant stated that the properties could only be used for leisure purposes and could not be occupied between mid-November and mid-December or between January and mid-February. Holiday homes often come with such restrictions to prevent them from being used as a full-time home. However, the local authority gave the applicant a certificate of lawful use as he had occupied the bungalow continuously for 10 years in breach of the planning permission.

The applicant then applied to have the restrictive covenant discharged/modified under section 84(1) of the Law of Property Act 1925, which requires the case to be made that owing to changes in the character of property/neighbourhood (or other circumstances) the covenant is deemed obsolete, that the covenant impeded a reasonable use of the property with no practical benefit/advantage to the persons with the benefit of the covenant and that a discharge/modification would not injure the persons entitled to the benefit of the restriction.

Objections to the application were received from both the manager of the estate and from other chalet bungalow owners. Although they did not object to daytime use of the bungalow during the restricted periods they said night time use should be restricted so that the estate’s character did not change from holiday homes. They offered to modify the restrictive covenant to only prohibit use of the chalets during the restricted periods between 5pm and 10am. The applicant continued with application.

The Upper Tribunal (Lands Chamber) decided that there was no change in the character or the property/neighbourhood or other change of circumstances to render the covenant obsolete It was still a holiday park for second homes and it would change for the worse if it became an estate with people living there full time. The chalets were not suited to full time occupation and the freehold plots were small so there was no room for development to make them suitable. As long as properties couldn’t be occupied overnight, even lengthy occupation would not undermine the character of the estate. The Tribunal concluded that the estate’s ability to restrict use was of practical benefit. If that practical benefit was removed others would follow suit and the estate would lose its character as a holiday/second home estate.

The Tribunal decided to modify the restrictive covenant so as not to allow the bungalow to be occupied between 5pm and 10am on any day during the restricted periods, and the local authority’s provision of a certificate of lawful use had no bearing on that decision.You can read the full case report by clicking here: