When Does a Covenant Lapse?


When a property has a restrictive covenant placed on it, the covenant may run without cessation, or it may lapse when some event occurs or after a set period of time. The precise effect of the covenant will depend on the wording in each case.
In a recent case, the interpretation of a covenant was at issue. The covenant prohibited the use of a property ‘for any trade, manufacture or business’…and prohibited at any future date the erection of any advertisement except an advertisement for sale of the property. The covenant could be breached only with the ‘previous consent of the vendor’.
The original vendor of the property, who had conveyed it subject to the covenant, died. The purchasers went to court to obtain a discharge of the covenant on the basis that it had lapsed on the vendor’s death.
In making its decision, the court considered the wording of another covenant contained in the documents of sale. This prevented building from being carried out on the property without the approval of the vendor or ‘the owners for the time being of the vendor’s adjoining property’.
The court considered that it would be unusual for the covenant regarding the use for any trade to be limited to the vendor’s lifetime when the prohibition on building was absolute. It therefore ruled that the covenant had not lapsed, but had become absolute.
Partner Note
Re Hutchins Cottage, on the application of Woodhouse.

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