7. Freehold Covenants

Question 1

What is a freehold covenant?

Answer 1

A Covenant is a promise to do (positive) or not do to (negative) something.

Question 2

Who is bound by a freehold covenant?

Answer 2

The original parties will be bound by privity of contract.

For subsequent parties, it depends if the burden and the benefit have passed.

Question 3

Who is the Covenator and who is the coventee?

Answer 3

Covenator - Bound by the promsise

Coventee - Can enforce the promise

Question 4

How can the benifit and burden pass to successors in title?

Answer 4

Both the burden and benifit can pass via law or equity, but both must pass in the same way (ie both legal or both equitable)

Question 5

What is the only exception that allows the burden to pass in law?

Answer 5

The burden cannot pass in law unless the exception of the Doctrine of Mutual Burden and Benefit applies

Question 6

How can the benefit of a covenant pass in law to successors In tile?

Answer 6

1. It must pass on the sale of a property in one of three ways:
   -Express Assignment s.36 LPA (Expressly assigned at the same time as the land transfer)

-Contract Act - Third party is named in the agreement granting the covenant

-S.56 LPA - Third party was identified at the time covenant was made

2. 4 Conditions must be met
   -The Covenant must touch and concern the land (benefit the land not the person)

-The original covenantee must hold the legal estate in the benefited land (ie legal owner of freehold / leasehold)

-The successor in title must obtain their tile from or under the original covenatee (Pre / Post 1925 covenant rules)

-The Benifit of the covenant must have been intended to run with the land

Question 7

For the benefit of a covenant to pass to sucessors in title at law, one of the requirements is that the successor obtains their title from or under the original coventee. What is the disntinguishment between pre 1925 covenants and post 1925 covenants?

Answer 7

®
Pre 1925 Covenants - If the coventee held a freehold, the successor must have a freehold

Post 1295 Covenants - Can have a freehold or lease hold, above does not apply

Question 8

For the benifit of a covenant to pass to successors in title in law, it must have been intended to run with the land. What are the 3 ways this can be proven?

Answer 8

1. Express Annexation (in the deed)
2. Implied Annexation
3. Annexation by S 78 LPA 1925

Question 9

What is Annexation?

Answer 9

This means the permanent attachment of a covenant to the benefited land, in such a way the benefit will pass on the transfer of the land.

Question 10

What is express annexation?

Answer 10

Where it is stated in the deed that the covenant will benefit a specific piece of land, and that it is intended to pass to successive owners of the land.

◊ In these cases, it will automatically pass.

Question 11

What is implied annexation?

Answer 11

The court can imply that the intention was for it to pass where the identity of the land being benefited is sufficiently clear

However, this is very rarely used.

Question 12

What is Annexiation under S.78 LPA 1925?

Answer 12

Any benifit that touches and concerns the land will be annexed.

Thus, any benefit from a covenant that is not expressly annexed to run with the land will.

Commonly used

Question 13

What types of covenants can pass in equity?

Answer 13

Only negative - ie restrictive - covenants can pass in equity

Question 14

What are the 4 conditions for the burden of a covenant to pass in equity?

Answer 14

1. The Covenant must be negative (not positive)
2. At the date of the covenant, the covenantee retained land which was benefited by the covenant (ie the person wishing to enforce owns the land benefited)
3. The Covenant touches and concerns the land (not personal, but for the land - such as an increase in value)
4. The Burden must have intended to run with the land (any post 1925 covenant will automatically be annexed by S.78, other wise expressly made in the covenant deed at time of transfer or implied)

            □ 1. Express Annexation 
            □ 2. Implied Annexation 
            □ 3. S 78 LPA 1925 (Annexation)

Question 15

What are the 3 conditions for a benefit of a covenant to pass in equity?

Answer 15

1. The Covenant must touch and concern the land (both lands)
2. The Successor in title to the original covenantee must hold a legal or equitable estate in land
3. The benefit of the covenant was intended to run with the land. Can happen in 3 ways:
4. Annexation (Express, implied or statutory under s.78 LPA)
5. Assignment (Express or implied)
6. The land in question is apart of a building scheme

Question 16

What is assignment of the benifit of a covenant in equity?

What are the 3 requirements?

Answer 16

Assignment is when the land is transferred, and the covenant is assigned to the land on transfer because the covenant directly states it will not automatically be annexed and express assignment is required

‘The covenant will not pass without express assignment’

-The land must be capable of benefiting from the covenant

-It must be possible to identify the land

-The assignment of the covenant must take place at the same time as the transfer between owner

Question 17

What is a building scheme and when does it apply in relation to covenants?

Answer 17

Where one piece of land is broken down into plots and sold off, leaving the original coventee with no ownership in the land.

The idea behind the building scheme is to allows covenants to be enforceable between the present homeowners and the covenants continue to benefit each house on that housing estate.

There are 2 conditions to establish if a building scheme exists:

◊ 1. Evidence of a common intention between all purchasers that the area is to be sold in plots

◊ 2. A clear intention that all purchasers of the individual plots will be subject to those mutual and reciprocal covenants.

(ONLY APPLIES TO PASSING OF THE BENEFIT)

Question 18

How can a covenant pass to new owners in registered land?

Answer 18

If both the burden and benefit has passed, the covenant can pass if:

1. The Successor in title is a purchaser for valuable consideration (paying market price for the property)
2. A notice has been registered against the title of the burdened land. This will then appear in the charges register of the title deeds.

Question 19

How can a covenant pass to new owners in unreigstered land?

Answer 19

Depends on the Age of the Covenant:

1. Created before 1st Jan 1926

-Doctrine of Notice (either actual notice, constructive notice (should have known if inspected title deed) or imputed notice (ie ur agent knows)

2. Created after 1st Jan 1926

-Must be registered as a Class D(II) Land Charge against the name of the original covenator (burdened land owner), which would be registered as a notice against the burdened title upon first registration

Question 20

What land charge is a covenant registered as?

Answer 20

Class D(II) Land Charge against the name of the original covenator (burdened land owner), which would be registered as a notice against the burdened title upon first registration

Question 21

What is the only circustances a positve covenant can pass?

Answer 21

When the doctrine of mutual benifit and burden applies.

This is because burdens of conveants only pass in law where this doctrine applies , and only restrictive covenants can pass in equity