If a party breaches a restrictive covenant – what will the court do? The answer is that a judge can grant either an injunction or award damages. But the ramifications of that decision can vary widely. With an injunction, a development can be stopped immediately which could have disastrous consequences for a developer. But an award of damages could simply represent a deduction in the profit to be made.

Thousands of detached homes are subject to restrictive covenants that protect their grounds from development. However, as one case illustrated, the world moves on and, with the right legal advice, such restrictions can be lifted or modified if they no longer serve a useful purpose.

Hidden within the title deeds of many homes are restrictions on the uses to which they can be put and it takes a trained professional eye to spot them. In a case on point, one such restriction came close to derailing a boutique hotel’s expansion plans.

The owners of the hotel had paid £450,000 for the house next door with a view to converting it into an annexe that would provide four further guest bedrooms. They obtained planning permission for the conversion, but the house was subject to a restrictive covenant requiring that it only be used as a single dwelling house.

Many commercial leases provide that the formal document represents the entirety of the agreement, superseding any prior agreements that may have been reached. An important Court of Appeal ruling has, however, made clear that such clauses do not preclude the implication of such additional provisions as are needed to make the lease 'make sense' in business terms.