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Federated Homes v Mill Lodge Properties [1980]

Facts

  • There existed some land labelled red, green, pink and blue, along with planning permission for 1250 homes
  • The defendant purchased the blue land, and covenanted not to build more than 300 homes on that land
  • The claimant purchased the green land with express assignment of the benefit of the defendant’s covenant, and the red land with no such assignment
  • The defendant obtained planning permission for more than 300 houses to be built on the blue land (332 houses)

Issue

  • Could the claimant enforce the covenant by virtue of owning both plots of land?

Decision

  • Yes

Reasoning

  • Section 78(1) provided that the benefit of a covenant would be annexed to land if it was intended to run with that land (not personal), and that land was touched and concerned
  • It is not difficult to satisfy the requirement that the benefit be intended to run with the land
  • Unlike in common law, the benefit of a covenant may pass to benefitted land even where that land has been subdivided. The benefit will pass to each part of land subdivided
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