Federated Homes Ltd v Mill Lodge Properties Ltd

Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594

Property law – Restrictive covenants

Facts

A company owned a site which included three parcels of land. They gained planning permission to build on the site and sold one patch of land of to the defendant with the condition that they build no more than 300 properties on the land, as any more would impact the company’s ability to build their own properties under the planning permission that had been granted. The plaintiff became the owners of the other two patches of land. One of the two patches carried the restrictive covenant, the other did not. The defendant carried out development on the first patch of land, which had been granted the planning permission. The plaintiff sought to restrict them from doing so and the High Court judge prevented the defendant from doing so. The defendant appealed.

Issue

The court was required to establish whether the land, which was being disputed, held the same covenant which the other parcels of land were subject to. If this was the case, the plaintiff would be able to prevent the defendant from building upon the land. It was also important to consider whether this right would move with the land in a future conveyance.

Decision/Outcome

The defendant’s appeal was dismissed. The court held that the land was sufficiently described in the conveyance of the property and that, in line with the Law of Property Act 1925, section 78, the benefit could be annexed to every part of the land. Therefore the benefit ran with the land which was built upon and the plaintiff could enforce the covenant to restrict the building upon the land.