Restrictive Covenants: Unlocking Opportunity

Introduction

In the fast pace of day-to-day legal practice, it is easy to overlook the practical tools available under the Land and Conveyancing Law Reform Act 2009 (the “2009 Act”). Periodic review of its provisions is worthwhile, particularly those that offer meaningful, real-world solutions.

A recent High Court decision, Guia Properties Ltd v The Paddocks Killeline Management CLG and Nautic Building Company Ltd (In Liquidation) [2026] IEHC 153, serves as a timely reminder of the utility of section 50(1) of the 2009 Act.

Background

Guia Properties Ltd owned lands at Rathnaneane, Newcastle West, Co. Limerick, comprising the servient land (land that serves or supports the dominant lands). The property was restricted by a restrictive covenant limiting its use to a single private or professional dwellinghouse with ancillary outbuildings. This covenant benefited The Paddocks Killeline Management CLG and Nautic Building Company Ltd (in liquidation).

Despite this restriction, Guia Properties Ltd successfully obtained planning permission (on appeal) for the development of 10 residential units along with associated infrastructure. The covenant, however, prevented the implementation of that permission.

A Practical Remedy: Section 50(1)

Section 50(1) of the 2009 Act allows a servient owner apply to court to discharge or modify a freehold covenant where continued compliance constitutes an unreasonable interference with the use and enjoyment of the land.

In determining such an application, the court must consider the factors set out in section 50(2) of the 2009 Act, including:

• The original purpose of the covenant and the passage of time

• Changes in the character of the lands or surrounding area

• Relevant planning policies and permissions

• The practical benefit (if any) to the dominant owner

• Whether obligations have become unduly onerous

• Any agreement (express or implied) to vary or discharge

• Any other relevant considerations

Additionally, section 50(3) of the 2009 Act allows the court to award compensation where discharge or modification causes loss to the dominant owner.

The Court’s Approach

In this case, several factors strongly favoured the applicant:

• No party actively sought to uphold the covenant

• The covenant provided no meaningful benefit to the dominant lands

• The surrounding area had undergone significant residential development

• The servient land had effectively become sterilised by the restriction

• Planning permission had been validly obtained for 10 houses and ancillary works

• Strategic planning policies supported residential development in the area

• Expert planning evidence confirmed that a single dwelling would not be permitted

• Development would not adversely affect neighbouring residential amenities

Justice Nolan also placed weight on broader public interest considerations, including national housing demand and planning policy objectives. He was satisfied that a fair balance had been struck between the rights of the dominant owner and the servient owner’s entitlement to reasonable use of its land.

Outcome

The Court held that the covenant constituted an unreasonable interference with the use and enjoyment of the servient land. An order was made discharging the restrictive covenant in full, with the Court also indicating a willingness to modify it if required. The order is to be registered in the Land Registry pursuant to section 50(4) of the 2009 Act.

Conclusion

For practitioners and their clients, the case is a valuable reminder: the 2009 Act is not merely reforming legislation; it is a practical toolkit. Section 50(1) of the 2009 Act, in particular, can be decisive where restrictive covenants no longer reflect planning realities, commercial needs or the public interest.

Further Information

For expert legal advice on Restrictive Covenants or any related Property matter, please contact Partner Denise Dockery or a member of our Property Team.