Property litigation weekly update - 22 October 2020


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This week's bulletin looks at a High Court ruling on the enforceability of restrictive covenants, government consultation on energy efficiency in the private rented sector and a Supreme Court decision on discrimination in the allocation of social housing.

Bath Rugby Club miss their tackle on century old restrictive covenant

In Bath Rugby Ltd v Greenwood and Others [2020] EWHC 2662 (Ch) the High Court has upheld the enforceability of a restrictive covenant which pre-dated the Law of Property Act 1925.

Bath Rugby Limited held a long lease of an area in the centre of Bath used for playing rugby and football, known as "the Rec" and was planning to develop the land. The rugby club sought a declaration that a restrictive covenant in a 1922 conveyance, which had the potential to interfere with redevelopment of the land, was unenforceable and not binding against the club.

The key issue was that the covenant would only be enforceable if it was found to have been annexed to the benefitting land. For post-1925 covenants, section 78 of the Law of Property Act 1925 means that covenants relating to land are deemed to be made with successors in title. However, for pre-1925 Act covenants, it depends on the wording of the covenant.

The Judge considered the wording of the 1922 conveyance and found that the reservation in favour of the vendor and his "successors in title" suggested an intention to annex the benefit of the covenant. Secondly, the Judge found that the 1922 conveyance sufficiently identified the land that benefitted the covenant. The Judge held that the correct test to apply is to look at the conveyance itself, judged in light of the surrounding circumstances when the covenant was created, and decide whether it sufficiently identifies the land to be benefitted by the covenant. It is not necessary for the benefitting land to be easily ascertainable at any time.

As such, as the benefitting land could have been identified at the time the covenant was created and the defendants were able to show that they had sufficient interest in the land which in 1922 formed part of the land adjoining or near the Rec, it followed that they had the benefit of the covenant by annexation. The covenant was therefore still enforceable and Bath Rugby's claim was dismissed.

Consultation on improving the energy performance of privately rented homes

As of 1 April 2020, it has been unlawful (with a few exemptions) for landlords to let domestic private rented property with an Energy Performance Certificate (EPC) rating of F or G. The Government's aspiration is to see as many homes as possible move to an energy performance rating of C by 2035.

In line with that aspiration, the Government has opened a consultation for views on proposals to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 in order to improve the energy performance of private rented sector homes.

The proposals have a number of stated goals including: to reduce carbon emissions, to decrease bills for tenants and to support investment in jobs and skills in the domestic retrofit supply chain.

The consultation is split into three chapters. Chapter 1 outlines the Government’s proposed approach for improving the energy performance of privately rented homes:

  1. raising the energy performance standard to an EPC rating of C;
  2. a phased trajectory for achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
  3. increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap; and
  4. introducing a ‘fabric first’ approach to energy performance improvements.

Chapter 2 considers the wider context for the proposals and tests an alternative stricter policy proposal and seeks views on ensuring the quality of any energy performance improvement works undertaken and on the action required for the future.

Chapter 3 seeks views on how the Government should support landlords through encouraging compliance with the Regulations and on strengthening enforcement options.

The consultation closes on 30 December 2020 and the Government’s response to the consultation is due in Spring 2021 and amendments to the Regulations planned for Autumn 2021.

Supreme Court rules on whether a charitable housing association's allocation policy was discriminatory

In R (on the application of Z & Anor) v Hackney London Borough Council & Anor [2020] UKSC 40, the Supreme Court determined whether a charitable housing association's policy of allocating its social housing stock to members of the Orthodox Jewish community was unlawfully discriminatory.

The appellant Z, had been identified by Hackney London Borough Council as having the highest level of housing needs and was referred by it to Agudas Israel Housing Association to be housed. The housing association's allocation policy provided that housing stock was to be allocated to households of Orthodox Jewish community first and then to others in need, if there was any surplus.

In October 2017, the association made an offer to Z to give her the next available property. Despite several properties becoming available and being allocated to members of the Orthodox Jewish community in the intervening period, Z was not offered a property until February 2019. Z subsequently issued proceedings against the Council and the association alleging she had suffered unlawful direct discrimination on the grounds of race or religion contrary to the Equality Act 2010.

The Supreme Court ruled that the allocation policy did not breach the Equality Act 2010 and that it was lawful under sections 158 and 193(2)(a) of the Act, as it constituted positive action that proportionately addressed needs or disadvantages connected to a protected characteristic, and restricted benefits to those with protected characteristics as a proportionate means of achieving a legitimate aim.

The Supreme Court therefore determined that the association was entitled to implement its allocation policy to ensure its charitable activities focused on the Orthodox Jewish community and that by doing so it was acting proportionately and lawfully under the statutory exemptions.

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