8. Freehold Covenants Flashcards
Who is the Covenantor and Covenantee.
Thee person entering into the covenant and taking the burden is the covenantor (usually the buyer) and the person having the benefit of the covenant is known as the covenantee (usually the seller).
Is the original burdened party (covenantor) liable on the covenant even after the sale of land by the person benefitting from the covenant, and why?
Yes, under privity of contract, the person to whom the covenantee sells is essentially assigned the right to benefit from the covenant
What are the four conditions for the benefit of a restrictive covenant to be enforceable by the successors of the covenantee, i.e. the party who original benefitted?
- Covenant touches and concerns the land, i.e. benefits the land
- It was intended to pass with the legal estate held by the original benefitting party
- The BP held the legal estate in the land to be benefitted at the time the covenant was made, and
- The assignee of the original BP now holds the legal estate
Essentially a privity of contract argument to transfer a benefit to the land, which was intended to run with the legal estate, to the person who now owns the legal estate
Is the burden of a restrictive covenant enforceable in law against a successor in title of burdened land?
No, but it may be enforceable in equity.
What are the two requirements for the burden of a restrictive covenant to be enforceable in equity against a successor in title of burdened land?
- The covenant must, at the time of the creation of the covenant, have been made to benefit dominant land retained by the covenantee, and
- Burden was intended to run with the land
What is deemed notice of a restrictive covenant to be enforceable in equity against a successor in title of burdened in (1) the unregistered system and (2) the registered system?
Unregistered: D(ii) restrictive covenant land charge
Registered: Notice on charges register of burdened land
What are the three ways in which a restrictive covenant can be enforced in equity?
- By annexation (showing covenant is intended to attach)
- By express assignment
- Under rule related to building schemes
Who do positive covenants generally only bind?
The original contracting parties. Positive covenants do not run with the burdened land, neither in common law nor in equity.
What are three of the ways of enforcing a positive convenant?
- Grant a lease
- Chain of indemnity covenants
- Benefit and burden rule
Why does a granting a lease allow a positive covenant to be enforced?
Because the burden of positive and negative leasehold covenants run with the land due to privity of estate.
How does a chain of indemnity covenant allow a positive covenant to be enforced?
The original covenantor and each successive successor in title obtain indemnity covenant from the next buyer, so the liability is continually offset and primarily enforceable.
Remember: This is unreliable, as there may be a break in the chain of indemnity, e.g., someone in the chain dies.
What is required for the rule that a person cannot accept a benefit without also accepting the burden, and what is a consequence of them failing to uphold a positive convenant?
The benefit and the burden must be related to each other, e.g. benefit of using a road paired with benefit of helping fund its maintenance. Whilst the obligation to maintain is not enforceable against a successor, they can be denied use of the benefit, i.e., the right of way, if it they not also pay for the upkeep of the road.
Where are positive covenants registered?
A positive covenant affecting a property would usually be registered in the charges register.
This is because the charges register includes details of third party rights and interests affecting the property, including positive covenants.
