8. Freehold Covenants

Question 1

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?

Answer 1

Yes, under privity of contract, the person to whom the covenantee sells is essentially assigned the right to benefit from the covenant

Question 2

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?

Answer 2

1. Covenant touches and concerns the land, i.e. benefits the land
2. It was intended to pass with the legal estate held by the original benefitting party
3. The BP held the legal estate in the land to be benefitted at the time the covenant was made, and
4. 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

Question 3

Is the burden of a restrictive covenant enforceable in law against a successor in title of burdened land?

Answer 3

No, but it may be enforceable in equity

Question 4

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?

Answer 4

1. The original benefitting party held the legal estate in the land to be benefitted when the covenant was made, and
2. Burden was intended to run with the land

Question 5

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?

Answer 5

Unregistered: D(ii) restrictive covenant land charge
Registered: Notice on charges register of burdened land

Question 6

What are the three ways to enforce a restrictive covenant in equity?

Answer 6

1. By annexation (showing covenant is intended to attach)
2. By express assignment
3. Under rule related to building schemes

Question 7

Who do positive covenants generally only bind?

Answer 7

The original contracting parties

Question 8

What are three of the ways of enforcing a positive convenant?

Answer 8

1. Grant a lease
2. Chain of indemnity covenants
3. Benefit and burden rule

Question 9

Why does a granting a lease allow a positive covenant to be enforced?

Answer 9

Because the burden of positive and negative leasehold covenants run with the land due to privity of estate

Question 10

How does a chain of indemnity covenants allow a positive covenant to be enforced?

Answer 10

The original covenantor and each successive successor in title obtain an indemnity covenant from the next buyer, so the liability is continually offset and primarily enforceable

Question 11

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?

Answer 11

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.

Whilst the obligation to maintain is not enforceable against a successor, they can be denied use of the benefit.