What is a view worth?

What is a view worth?

“We have had several instructions recently where clients have been looking to discharge or modify a restrictive covenant that affects their property. A recent decision of the Upper Tribunal (Lands Chamber) (UT) has raised some interesting and useful points in considering such cases”, says Mark Sanders of Acorn Rural Property Consultants.

“The case concerns a residential property in the South Hams that benefits from a covenant, negotiated by the owners when they purchased the property in 2003, which restricts the use of the adjoining field to the grazing of sheep and horses and to arable use of all types. The owner of the field obtained planning permission for the construction of a menage, which would have been visible from the residential property and applied to the UT to discharge or modify the restrictive covenant to allow them to construct it”, explains Sanders.

“Section 84 of the Law of Property Act 1925 sets out the grounds on which the UT may discharge or modify a restrictive covenant and, where appropriate, make an order for a payment to be made when, in the words of the Act, money will be an adequate compensation for the loss or disadvantage (if any) which will be suffered from the discharge or modification”, continues Sanders.

The UT heard expert evidence on the value of the restrictive covenant. There was a divergence of opinion with one valuer saying that the value was around 1% of the value of the residential property and the other saying it was up to 10%, which provided a range of between £12,250 and £122,500. In deciding not to discharge or modify the restrictive covenant, the UT held that, in addition to any financial value, the practical benefits of it are of substantial advantage and value and that its modification would diminish the rural setting which underlies the identity of the residential property.

“It is also relevant that the UT attached weight to the fact that it was the current owners of the residential property who had negotiated the restrictive covenant when they bought it”, concludes Sanders.

For further information please contact Acorn Rural Property Consultants on 01884 212380

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