8. Freehold Covenants Flashcards
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 three ways in which the benefit of a restrictive freehold covenant can pass in equity?
1) Covenant must touch and concern the land
2) One of the following methods applies:
a) Annexation
b) Assignment
c) Building scheme rule
What is the test to identify whether a covenant is positive?
‘Hand in pocket’ test - ask whether covenant requires expenditure of time/effort/money.
- If so, then it is a positive covenant - enforceable as a personal right only.
- look at substance and not form.
When will a mixed covenant be capable of binding successors in title?
If the positive and negative obligations are capable of being split up, then only the negative part will pass.
- HOWEVER - where these cannot be split, then need to consider whether on the whole, the covenant is negative/positive.
ie. covenant not to build without consent from dominant owner = still be valid, as on the whole negative.
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.
- note 3 exceptions to general rule.
What are the three exceptions allowing for covenant’s burden to pass at law?
- doctrine of mutual benefit and burden
- Lease - positive and restrictive covenants may be binding on successor in title to a tenant (ie. assignment)
- Indemnity covenant
When will the doctrine of mutual benefit/burden operate to pass a burden at law?
Person who wishes to claim the benefit of a deed (e.f. service or facility), they must also submit to any corresponding burden (ie. upkeep/maintenance) under the same deed.
Requires
- clear link
- genuine choice
- same transaction
What are the four conditions to pass the burden of a restrictive covenant in equity?
Talk v Moxhay rule:
1) covenant must be restrictive (negative) in substance;
2) accommodate/benefit the dominant tenement;
3) burden is intended to run with the servient land;
* expressly
* impliedly (via s.76 LPA 1925 - unless contrary intention is shown)
4) notice of covenant is given
* registered as notice on charges register of servient land (s.32)
* class D(ii) Land Charge if land is unregistered.
* still binding even w/out notice if successor is a donee.
What are the three ways the benefit of covenant can pass in equity?
1) By annexation (showing covenant is intended to attach)
- implied via statute (s.78 LPA 1925)
2) By express assignment
3) Building schemes rule
What are three of the ways of enforcing a positive convenant?
- Lease via privity of estate
- Chain of indemnity covenants
- Benefit and burden rule
Why does a granting a lease allow a positive covenant to be enforced against an assignee?
Because the burden of positive and negative leasehold covenants run with the land due to privity of estate
What is required for the mutual benefit/burden rule?
The benefit and the burden must be related to each other, e.g. benefit of using a road paired with burden of helping fund its maintenance.
Effect of non-compliance
Whilst the obligation to maintain is not enforceable against a successor, they can be denied use of the benefit.
How does the benefit pass in equity via statutory annexation?
Section 78 - a utomatically annexes the covenant to the land without need for express words so long as it:
1) was created post-1925; and
2) touch and concerns the land.
How does the benefit pass in equity under a building scheme?
Occurs where a developer sells off housing development to various homeowners.
Conditions
1. all buyers buy from the ‘same seller’
- requirement has been relaxed, need not be same person, instead, seems to be about whether underlying point of transfer remains the same (Re Dolphins);
2. covenants were intended to benefit all plots; AND
3. common intention by buyers that covenants are intended to benefit all plots.
- each be subject to mutual/reciprocal obligations.
When will a covenant be deemed to ‘touch and concern’ the land?
Must be an evident benefit to the land itself, not just its owner.
Key factors:
(i) whether benefit would subsist with a different owner;
(ii) whether is expressly personal;
(iii) whether it affects the nature, quality, value, or use of land in someway.
