English law has a “complex web of rights and obligations” which link parcels of land. Such rights and obligations have developed over centuries, well before the complex and sophisticated planning control system of today was first implemented in 1948. 

Private property rights encompass restrictive covenants and easements, which will affect a “burdened” property for the benefit of specific “benefiting” property. Once created, these rights exist indefinitely. Unlike the planning system, private property rights exist to benefit a specific property, rather than addressing a wider public interest. Provided that a private right has been validly created, then there are few limits on the nature or content of restrictive covenants or easements. 

If these private rights cannot be accommodated within a proposed development scheme, then a developer will need either to negotiate a “release” of the rights; take steps to mitigate the risk of breaching the covenants or easements (for example through title insurance if the breach is deemed to be insurable); or not proceed at all. It is not uncommon for land to be considered, in whole or part, incapable of development as a result of particularly onerous private rights, for example a restrictive covenant preventing use of land for anything other than an agricultural purpose. 

Of course, private property rights are often created as part of disposals where the seller wants to limit the future activity of the buyer or to establish the ongoing relationship between neighbours on newly developed estates. For example, private property rights are used to provide homeowners with rights of way over private estate roads and to establish service charge regimes. The importance of private rights for developments will become even more acute as the industry moves away from relying on long leasehold structures for residential developments. As such, private rights are a core part of the essential legal infrastructure needed for new development schemes.

A restrictive covenant is a contractual promise which can (assuming certain criteria are met) bind successors in title (i.e. future purchasers of land).

Restrictive covenants can used as a way of controlling the use or changes to the affected or burdened land. For example:

1. restrictions on using the burdened land for a specific use (e.g. a restriction not to use it for more than a single dwelling or as a public house);
2. restrictions against carrying out alterations to existing buildings on the burdened land; and
3. restrictions against erecting new buildings or structures on the burdened land (a “no build” covenant). 

Restrictive covenants are therefore used to benefit nearby benefitting land. For example, a covenant that prevents the construction of additional buildings or tall buildings on burdened land is likely to have been created to benefit the amenity and enjoyment of neighbouring or nearby land (preventing increased density, overlooking, traffic etc).

In practice, this means that if a restrictive covenant is drafted as a promise not to do something and a successor in title (i.e. a future purchaser of the burdened land) has notice of the covenant, the restrictive covenant is said to “run with the land”. The effect is that the future purchaser will have to adhere to the requirements of that restrictive covenant from the point at which it purchases the burdened land. If the burdened land is registered at the Land Registry then the covenant should be apparent from the title register for that land and a future purchaser would be put on notice as a result. Where restrictive covenants bind successors in title, the covenant can be enforced by the owner of the benefitting land against the owner of the burdened land. 

As we have highlighted above, the ability for restrictive covenants to run with the land means that they can exist in perpetuity, unless released or modified as we discuss below. The contents of restrictive covenants may inhibit or delay development by preventing development of the burdened land expressly or more indirectly. This may be entirely appropriate in the context of a particular site and its neighbouring land such as an area of outstanding natural beauty. However, the content and effect of restrictive covenants may be at odds with the wider public interest in development and sometimes the historic nature of restrictive covenants can raise practical problems. For example: 

1. Over time it may become difficult to identify the land which benefits from the restrictive covenant. This can make it difficult or impossible to know who to approach to agree deeds of release or variation to accommodate a development. It may also suggest that the restrictive covenant is no longer of meaningful amenity and benefit to the benefiting land, for example when the benefiting land is divided up and some parts of the benefiting land are no longer adjoining or even proximate to the burdened land.
2. The restrictions themselves imposed by restrictive covenants may become outdated or less relevant given changes or other development to the benefitting land. This can be seen with common historic covenants preventing the use of land for the sale of alcohol or as a public house, which arguably made more sense in an era before modern licensing laws.   

Easements are legal rights benefitting certain land, which are enjoyed over other land: for example, a right of way. So, if a landowner enjoys the right to cross a development site along a particular route, then a developer will often need to accommodate this right within the development scheme. This has a similar effect to a “no build” restrictive covenant, with additional concerns about the ongoing upkeep and maintenance of such access route. 

Just as for restrictive covenants, easements can become problematic over time. For example, rights of way may cease to be used in practice, but remain live legal rights that continue to affect the burdened land and would be breached by constructing a new home over that part of the burdened land. 

Rights of light are a category of easement that are of particular note in the context of development. In our experience, rights of light are a key concern, especially in urban, densely-built areas such as Greater London. Critically, rights of light can be acquired after 20 years’ “long use” through particular windows or apertures. As such, neighbouring property owners can acquire rights of light – legal rights which last forever - entirely passively and arbitrarily. Much depends on what happens “next door”.   

Unlike most rights of way or restrictive covenants, rights of light may not be obvious from the registered title. As a matter of course, developers will carry out a complex legal and surveying exercise to assess the risk that their proposed scheme will “interfere” with any private rights of light which may exist. 

It is important to emphasise that rights of light are entirely distinct from the planning consideration of the impact of loss of light to surrounding properties. Whilst there is judicial commentary suggesting that the courts should not grant an injunction to prevent an infringement to rights of light when planning permission has been given to the offending development, the “injunction” threat persists.  

We have set out below the choices open to developers in relation to private rights which have either been established or which are likely to have been. Of course, the very first step will be to interrogate whether private property laws have actually been acquired, and/or if they are binding. 

In reality, most complex schemes will need to consider a mixture of approaches to different private rights or different elements of the same private right. For example, a developer may seek a release from a known beneficiary of a restrictive covenant, with insurance to cover the risk of additional unidentifiable land benefiting from the right. There are also specific strategies for dealing with rights of light, which we will not cover in this article. 

Compliance

The simplest way to deal with private rights that affect development land will be to accommodate the rights within the proposed scheme. For example, any new estate roads can be designed to accommodate and align with existing rights of way. It is key to identify and assess private rights at an early stage in a development, so that this can be considered as part of the design. In some cases, however, it simply isn't possible to accommodate the right (i.e. due to viability or planning reasons) in which case alternative solutions will need to be considered.

Release

1. Through private agreement

It is always open to the developer to negotiate a release or variation of the private right with the landowner who has the benefit of the rights. For example, a developer may reroute a right of way to align within the proposed design with its neighbour’s consent and engagement. 

The key issue preventing the developer from negotiating releases may be that the benefiting land cannot be identified. This is a common issue with historic private rights or where the benefitting land has been broken up into many separate titles over time. This highlights the real challenge presented by the perpetual nature of private rights, despite almost comprehensive land registration in the UK. 

Even if the beneficiary can be identified, there are no general legal requirements for the beneficiary to respond or act reasonably in relation to any discussions in relation to the private right. 

2. Obsolescence/modification/discharge

The Upper Tribunal has the power to discharge or modify on certain statutory grounds: i) freehold restrictive covenants; and ii) leasehold restrictive covenants imposed by leases for more than 40 years after the expiry of 25 years of the term. In practice, the current scope for discharging and modifying restrictive covenants is extremely limited. 

In essence, and failing an agreement between the parties, the principal grounds require a party to show that a restrictive covenant: 

• is obsolete; and/or 
• does not benefit those with the benefit of the covenant; and/or
• impedes a development which would not substantially harm those with the benefit of the covenant. 

In some cases, the Upper Tribunal can have regard as to whether the continued existence of the restrictive covenant would impede some reasonable use of the land for public or private purposes. However, the courts have interpreted this provision very narrowly. 

The Upper Tribunal’s jurisdiction also does not extend to easements.

Breach

Private property rights have historically been treated as different and special. There is a long-held view that monetary damages will not be adequate for compensating those whose property rights have been infringed. Therefore, the party with the benefit of a private property right can apply for an injunction to prevent interference with that right. Accordingly, well advised landowners and developers are hesitant knowingly to breach private rights. However, in certain circumstances developers may have no option but to proceed with a development that will potentially breach private rights. This may be the only viable route forward for historic private rights, e.g. where the benefiting land cannot be identified or the covenant is not properly registered at the Land Registry. 

Generally, developers and their funders will require indemnity insurance to mitigate the risk that a third party brings a claim for breach of covenant. Title insurance policies can be cost effective or costly depending on the risk underwriting.

Insurance is generally unavailable if the developer is in contact with the beneficiary, so it is normal for developers to elect either to insure, negotiate in relation to particular private rights or agree certain negotiation carve-outs with an insurer to allow a dual-tracked approach. Early legal advice can be crucial for navigating a pragmatic and workable route through private rights. 

The Law Commission in each of its 2011, 2013 and 2014 papers suggested a raft of reforms. Extensive work and consultations have been carried out in this area. The Law Commission annexed a 2011 Law of Easements Bill to its 2011 paper; and a Law of Property bill was announced in the Queens Speech of 18 May 2016. However, momentum has been lost in recent years. 

The statutory vehicle for property law reform already exists as the Planning Reform Bill (announced in the Kings Speech of 17 July 2024), which could be used as a vehicle for some targeted property reforms. 

We anticipate that the following reforms could potentially become part of the agenda: 

1. abolish the future acquisition of rights of light through prescription; and/or
2. abolish or restrict the grant of injunctions to prevent an infringement to right of light; and either cap damages or confine damages to be assessed on a strictly compensatory basis; and
3. widen the scope for discharging/modifying obligations (including restrictive covenants and easements) based on the public interest. 

Such reforms would not be entirely free from controversy, particularly number 3 above, which would serve to give considerably more power to the Upper Tribunal to assess the content and nature of restrictive covenants. 

Existing landowners are likely to have concerns about how broadly legislation could be drafted and the extent of discretion afforded to the Upper Tribunal to discharge or modify restrictive covenants and easements. Equally, any wider power to modify covenants would inform how we draft new restrictive covenants for future disposals, so that we can manage this increased risk. 

Any reform in this area will need to be weighed against the importance of certainty of law, which is crucial to the asset value of real estate.