Court of Appeal success for holiday park owner

Court of Appeal success for holiday park owner

Published:

Author: Sian Walker

A Court of Appeal judgment has confirmed an important exception to the general rule that positive covenants do not bind subsequent purchasers of the freehold title.

As a general rule, positive covenants - which place an obligation on a party to do something, for example, a covenant to pay a service charge or a covenant to repair - do not run with the land.

Therefore, a subsequent purchaser of the freehold title is under no obligation to carry on performing that covenant.

However, there is an important exception to this general rule, and the Court of Appeal judgment in the case of Alan Wilkinson and Others v Kerdene Limited [2013] has reaffirmed this exception.

Broadly speaking, the exception provides that a party may not take the benefit of a covenant without taking the associated burden (often referred to as the 'benefit and burden rule').

Shoosmiths acted for holiday park owner Kerdene Limited, which owns the common areas (such as estate roads, pathways and playgrounds etc) of a Cornwall holiday park.

Kerdene argued that it was entitled to enforce a positive covenant against the owners of bungalows situated on the park to pay a service charge for the maintenance of the common areas, despite many of the bungalow owners being successors in title to the original party who entered into the covenants.

Kerdene argued that the chalet owners could not take the benefit of the rights granted in the deed - which included a right to use the park's roads and facilities - without also accepting the associated burden of paying a service charge for the upkeep and maintenance of these common areas.

The bungalow owners tried to argue that the original obligation to pay a service charge had been in respect of a plethora of facilities and services, some of which were no longer available, and therefore there was no connection between the benefit and the burden such that the positive covenant had not run with the land and was unenforceable.

The county court, and subsequently the Court of Appeal, rejected this argument, finding in favour of Kerdene that there was a real association between the rights granted and the service charge payments claimed.

Shoosmiths has in-depth knowledge and years of experience in acting for leisure and holiday park owners. To discuss similar issues with our Property Litigation team, please contact Patricia Mellody:

patricia.mellody@shoosmiths.co.uk