4. Freehold Covenants

Question 1

Is a covenant capable of being legal?

Answer 1

Covenants are not capable of being legal interests in land. They are not listed in s 1(2) LPA 1925 and are therefore equitable by nature – s 1(3) LPA 1925.

Question 2

Formalities for creating a valid equitable covenant

Answer 2

Signed writing (possible to create by contract) but tend to be created by deed

Question 3

Does the burden of the covenant pass at common law?

Answer 3

NO

Question 4

Liability of original parties to the covenant

Answer 4

The original covenantor remains bound by the covenant even after they have sold the land due to privity of contract

Question 5

When does the burden of a covenant pass in equity?

Answer 5

Doctrine in Tulk v Moxhay:
1. Covenant is restrictive
2. Benefits dominant land retained by covenantee (at the time of creation)
3. touches and concerns the land
4. made with the intention of binding the servient land (express or implied)
5. Owner of servient land has notice of the covenant

Question 6

How can positive covenants be indirectly enforced?

Answer 6

1. Creating a lease
2. Indemnity Covenant
3. Doctrine of mutual benefit and burden (Halsall v Brizzell)

Question 7

Requirements for Halsall v Brizell to apply

Answer 7

i. Burden is clearly linked to the benefit
ii. covenantor’s successors in title must have chance to elect or renounce it

Question 8

Running of the Benefit at Common Law: When will it run to a successor?

Answer 8

If there is
1. Express Assignment
2. Automatically (with conditions)
i. Cov. touches and concerns land
ii. Original covenantee and person now seeking to enforce must have a legal estate in land
iii. Original parties must intend benefit of the covenant is to run with the land (ie. clear from deed)
- Either Expressly (in deed)
- Or Implied (under s 78 LPA 1925) applies to covenants created after 1925

Question 9

Running of the Benefit in Equity: When will it run?

Answer 9

1. Covenant touches and concerns land and
2. Benefit passes by express assignment or by annexation
   i. Express Assignment
   - Giving written notice to the person with the burden of the covenant, signed by assignor (original covenantee eg)
   ii. Annexation
   - Express (written into deed etc.)
   - or implied under statute

Question 10

Matching the Benefit and Burden Principle: what is required to do this?

Answer 10

• If individual wants to use this rule, they must prove they have the benefit in equity

Question 11

Potential Remedies for breaches of Covenant: Positive Covenant

Answer 11

1. Damages (contractual, common law)
2. Specific Performance (against original covenantor only)

Question 12

Remedies for breaches of restrictive covenants

Answer 12

1. Injunction
   - This is an equitable remedy, equitable maxims apply (ie. delay defeats equity, clean hands)
2. Damages in lieu of injunction at the court’s discretion

Question 13

How to modify or discharge a covenant

Answer 13

1. Extinguish covenant with common ownership
2. Lands Chamber of Upper Tribunal
3. Negotiate a release
4. Insurance