When housing estates are built, the management of the open spaces is often delegated to a management company whose shareholders are the owners of the homes on the estate.
It is usual for the management company to have rights over various aspects of the estate, in particular as regards proposed developments to any of its properties that may alter the character of the estate.
When a householder who was a member of such a management company wished to build another residential property on his existing (large) plot, he went to court to obtain a ruling as to whether or not he needed to obtain the permission of the management company.
At issue was a covenant between each householder/shareholder and the management company which required the property owner to seek the permission of the management company for any purpose other than ‘a private dwelling-house in single-family occupation’.
In similar circumstances, the court has ruled that the development could go ahead without the need to obtain the permission of the management company. However, on this occasion the court took the contrary view. One of the differences in this case was that eligibility for the shares in the management company was originally restricted exclusively to purchasers of the houses in the original development.
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