Commercial Property Updates from July and August 2024

Application to modify restrictive covenant rejected

Briant v Baldacchino [2024] UKUT 164 (LC)

Grant of planning permission for a scheme which would be prevented by a restrictive covenant helps to establish that the proposal is a reasonable one, but is not conclusive as regards modification of the covenant. On the other hand, absence of a detailed current planning permission makes it impossible to assess what benefit the objector derives from the covenant, and is likely to lead to rejection of the application to modify.

Scope of ‘sweeper’ clauses in service charges

Tower Hamlets LBC v Lessees of Brewster House and Maltings House [2024] UKUT 193 (LC)

A landlord’s attempt to recover the costs of work to remedy structural defects through the service charge failed. It was not work of repair, since there was no deterioration in the condition of the building. Neither was it work of maintenance, since the meaning of the word “maintain” also connoted some degree of physical deterioration. The landlord’s obligation to carry out work required for the safety of the building was effectively a sweeper clause, as was some wording contained in the definition of service charge expenditure, on which the landlord also sought to rely. The parties could not have contemplated that such general wording could have extended to the significant costs of putting right inherent structural defects.

Consequences of unlawful forfeiture

Tanfield v Meadowbrook Montessori Ltd [2024] EWHC 1759 (Ch)

The lease of a school did not exclude the common law requirement that rent must have been formally demanded before forfeiture can be effected for non-payment, hence the peaceable re-entry in this case had been unlawful. The resulting potential damages claim outweighed the claimed arrears, and the landlord’s winding-up petition was therefore dismissed.

Contested prescriptive easements – two cases

Nicholson v Hale [2024] UKUT 153 (LC)

Sagier v Kaur [2024] UKUT 217 (LC)

A sign reading “This staircase and forecourt are private property. No public right of way” was sufficient to contest usage by a neighbour and thereby prevent the acquisition of a right of way by prescription. On the other hand, a sign simply stating “No public right of way” was not sufficient to exclude the acquisition of a private right of way.

Learning Objectives:

To cement learning of new developments in the past month, and/or gain awareness of others that busy practitioners may have missed.