MDM Civil Engineering Limited v Scott Morgan [2026] UKUT 347 (LC)

MDM Civil Engineering is an Upper Tribunal decision about the relationship between planning permission and a restrictive covenant.

The site had planning permission for a third dwelling, but a 2019 covenant limited the land to two private dwellinghouses. The Tribunal modified the restriction so the permitted third house could be built, but required a payment of £37,500 to the party entitled to the benefit of the covenant.

The decision is a useful reminder that planning permission does not remove a private covenant. It can, however, be important evidence when the Tribunal considers whether the proposed use of land is reasonable.

Neutral citation

[2026] UKUT 347 (LC)

Court

Upper Tribunal (Lands Chamber)

Judgment date

10th September 2026

Judge

Peter D McCrea OBE FRICS FCIArb

Case number

LC-2025-372

The covenant limited the site to two houses

The land at Gray Lane, Witham St Hughs in Lincolnshire had once contained a community building known as The Ark. When the land was sold in 2019, a restrictive covenant limited its use to two private dwellinghouses.

Two houses were subsequently built. MDM Civil Engineering Limited later sought to build a third dwelling on the remaining land.

Planning permission took several attempts

The planning history was not straightforward. A proposal for a third dwelling was withdrawn in 2020. A later application was refused in 2021 and the refusal was dismissed on appeal. A further 2022 application was also refused and dismissed on appeal in January 2024.

A fourth attempt succeeded. North Kesteven District Council granted planning permission for the third dwelling on 16th July 2025.

That permission solved the planning issue, but the covenant still prevented the land being used for more than two private dwellinghouses.

Section 84 provided a separate route

MDM applied to the Upper Tribunal under section 84 of the Law of Property Act 1925 to modify the covenant.

For ground (aa), the Tribunal considered whether the restriction impeded a reasonable use of the land and whether it secured a practical benefit of substantial value or advantage to the person entitled to it. The statutory framework also requires consideration of the development plan, the pattern of planning permissions and refusals in the area, and the circumstances in which the restriction was imposed.

The Tribunal also found ground (c) made out because the proposed modification would not injure the person entitled to the benefit. Even where a statutory ground is established, the Tribunal still has to decide whether to exercise its discretion.

Planning permission was persuasive, not decisive

The Tribunal made the planning point particularly clearly. Obtaining planning permission did not guarantee that the section 84 application would succeed, but it was a persuasive indicator that the proposed use was reasonable.

That distinction matters. Planning permission and a restrictive covenant operate separately. The existence of one can be relevant to the other process without automatically determining the outcome.

The covenant was recent, but that was not decisive

The restriction was only just over six years old when the application was made. The Tribunal treated its recent age, together with the connection between the applicant and the original purchaser, as factors weighing against modification.

However, there is no absolute rule that a recent covenant cannot be changed. The Tribunal considered all the circumstances and concluded that the permitted third dwelling would finish the development and that the balance favoured modification.

The formal objector did not have the benefit of the covenant

The owner of one of the existing houses had objected to the application, but during the hearing accepted that his own title carried the burden of the restrictions rather than their benefit.

The Tribunal therefore found that he was not the person entitled to enforce the covenant. The party with the benefit was Rysa Lodge Residential Properties Limited.

This is a useful practical warning. Before assuming that a neighbour can enforce a covenant, the title position and chain of benefit need to be checked properly.

Modification came with a £37,500 payment

The Tribunal modified the covenant so that a third single-storey dwelling could be built in accordance with the July 2025 planning permission, or a later permission for a dwelling that was not materially different or higher.

Material before the Tribunal indicated that the 2019 sale price had been reduced because development was restricted to two houses. The Tribunal acknowledged that the relevant statements from Rysa and Mr Broddle had not been tested by cross-examination and were not formally in evidence. Even so, it said there were “clear reasons to believe” that the restriction had reduced the original purchase price and that the account of the negotiations had “the ring of truth”. The Tribunal considered it just to require MDM to pay £37,500 to Rysa.

The order was conditional on acceptance of the modification and proof of payment within three months of the decision.

Key point from MDM Civil Engineering

Planning permission does not override a restrictive covenant. In a section 84 application, however, permission can be persuasive evidence that the proposed use is reasonable. A successful application to modify a covenant can still involve conditions or compensation, and the person objecting must actually be entitled to the benefit of the restriction.

Read the MDM Civil Engineering decision

The approved Upper Tribunal decision is held in the Planning Geek case-law library. Gold Members can open the protected PDF below.

MDM Civil Engineering Case Law Page Created: 20th September 2026