Developments: When A Neighbour Can Unreasonably Withhold Consent

Summary and implications

Where a property is sold subject to a covenant stating that the buyer must obtain consent from the seller for any proposed development, but there is no express provision that consent cannot be unreasonably withheld, it is likely that the court will imply such a provision, as it did in a recent High Court case*.

Developers will welcome the decision. Provisions for consent in freehold covenants are often silent as to whether consent can be unreasonably withheld. The inference that consent cannot be unreasonably withheld may provide a bargaining position.

The claimants all had interests in 89 Holland Park

The claimants comprised the freehold owner of 89 Holland Park and six of the long leasehold owners of the flats in the building. The defendant was the owner of the adjoining land.

The claimants wanted to enforce restrictive covenants

The claimants were seeking to enforce the benefit of certain covenants contained in a 1968 deed (the Deed) (see the box below) which related to the development of the adjoining property.

The covenants required the claimants' approval of any plans, drawings...