Covenants Flashcards
What is a restrictive covenant?
A enters into an agreement with B that they will not do something without their consent. If A promises not to build on their land, A has the burden of the covenant, B has the benefit
What is the problem that will typically arise concerning covenants?
-Where land is conveyed to another, issue is showing that the benefit and the burden held by A and B will pass to new owners
-If A’s land was sold, B would have to prove that the burden from A passes
-If B’s land was sold, the new purchaser would have to show the benefit passes with B’s land
-If the covenant is mutual however, it is hard to say what title passes to new owners
What is the difference between being the successor in title and a person deriving title?
SUCCESSOR: acquiring full freehold title
DERIVING: Lease or mortgage from original owner
How does the burden of a covenant run? (i.e. who can be sued?)
-Burden does not run at law, Rhone v Stephens, therefore we must turn to equitable principles
What does the case of Hulk v Moxhay tell us about the passing of a burden?
-A purchaser who has notice is subject to the burden. Three main principles derive from this:
1. Burden must not be personal but must relate and be intended to run with the land
2. There must be dominant land capable of benefiting from the covenant
3. Covenant must be negative in nature
What is meant by the covenant being related to land?
-Must not be some personal obligation
-s79 Law of Property Act 1925, covenant should affect them as owners of land (word saving device for the covenant)
What does the case of Rhone v Stephens tell us?
-Burden can never pass where the covenant is positive
-Enforcement of a positive covenant lies in contract since it compels an owner to exercise his rights
When is it possible for the burden of a positive covenant to run?
Ives v High
-If there is a positive covenant which also carries a benefit, i.e. there is a mutual benefit and burden, the covenant can run even if it has a positive aspect
What does the case of Re Nisbet & Potts Contract tell us?
-Restrictive covenant, as an equitable proprietary interest, is binding on all except a good faith purchaser for value without notice
How can the benefit of a covenant pass? (i.e. who can sue?)
-Assignment, both in law and equity
-Annexation of the benefit of the covenant, either by express words, implication or s78 LPA 1925
-Under a scheme of development
What is assignment of the benefit in law?
-Original covenantee transfer the benefit to the purchaser of the land
-Limited as the only person who can be sued is the original covenantor can be sued because the burden does not run at law
What are the requirements for assignment of the benefit in equity?
- The land of the assignor must be capable of being benefited by the covenant
- This land must be ascertainable or certain from the deed of conveyance
- The covenant cannot be enforced by the covenantee against an assign of the purchaser after the covenantee has parted with the whole of his land
What is annexation and what must be done for this to be satisfied?
-Process by which the benefit of the covenant is glued to the land so it passes automatically
1. There must be intention that the benefit should become part of the land
2. It is necessary to determine the physical limits of the land to which the covenant is annexed
What case shows express annexation (i.e. one done by words)?
Rogers v Hosegood
What is the effect of s78 Law of Property Act 1925?
(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title […] and shall have effect as if such successors and other persons were expressed
