Property development and rights of way: a cautionary tale

Summary

• An oral agreement with a previous owner for the removal of a right of way will not bind successors in title to registered land.
• Proprietary estoppel will not assist a developer who has failed to take the necessary steps to record any agreement with a neighbouring landowner on the title to his property.
• The provisions of the Land Registration Act 2002 cannot be ignored.
• Act quickly if agreement is reached. The case of Pezaro v Bourne [2019] EWHC 1964 (Ch) provides a cautionary tale of how not to deal with the removal of a right of way that will prevent your intended development and the potentially significant implication in delaying taking action.

Background

• This case is essentially a neighbourly dispute. The essential facts are set out below.
• Mr and Mrs Pezaro’s property was burdened by a right of way. Mrs Pezaro agreed with the beneficiary of the right of way, Mr Ayers, that the right of way would be removed so that she could develop a part of her land that was burdened by the right of way. Oral agreement was reached for the removal of the right of way.
• However, Mr and Mrs Pezaro wanted to obtain planning permission first. That meant that before any formal steps were taken to record the agreement, Mr Ayers sold his property. It came to be owned by Mr and Mrs Bourne.
• Mr and Mrs Pezaro sought to rely on the doctrine of proprietary estoppel to bind Mr and Mrs Bourne by the oral agreement reached with Mr Ayers.
• Alternatively, to avoid the fact that the agreement was not registered on their title, they sought to rely on an exception in Schedule 3 of the Land Registration Act 2002 applying to persons in actual occupation.

What is proprietary estoppel?

• Proprietary estoppel is conventionally based on representations, by words or conduct, which amount (objectively) to a statement about the future enforcement of legal rights or an intention to confer on the representee an interest in property. The court has to determine whether the words used or acts done would reasonably convey to the other party an assurance which it was reasonable for that party to rely on (Lord Justice Patten).

What amounts to actual occupation of a right of way?

• The court held that it should be cautious before finding that persons are in actual occupation of the servient land.
• This is particularly so as the servient land is not part of the land that will be inspected or viewed before purchase.
• If a right of way has been built over, as a matter of plain English, there is likely to be someone in actual occupation.
• Where the right of way has not been built over but altered (e.g. fenced off; gated) the right of way has been obstructed rather than being occupied.
• Site notices notifying of planning applications do not amount to actual occupation. They may give notice of an intention to occupy. It is important to remember that the grant of planning permission does not of itself destroy or alter private property rights.

Decision

• Mr and Mrs Pezaro failed in their claim. The agreement with Mr Ayers was not binding on Mr and Mrs Bourne. They were not in actual occupation of the right of way. They could not rely on the doctrine of proprietary estoppel. The right of way continued to exist and burden their development site.

Practical implications

• Act quickly if agreement is reached regarding the removal of a burden from your title e.g. an easement or restrictive covenant. Until such time as that agreement is recorded on the title it will not be binding on successors in title. The doctrine of proprietary estoppel will not assist you.
• Do not ignore the registration requirements set out in the Land Registration Act 2002.
• It is difficult to rely on the ‘actual occupation’ exemption in the Land Registration Act 2002 in relation to a right of way unless a property has been built over the right of way. Merely making the right of way inaccessible will not assist.