Covenants Flashcards
What is a covenant?
A promise relating to land.
What is the purpose of a covenant?
To ensure the buyer does not do anything that could affect the amenity/value of the retained land.
What must a covenant be in order to be valid?
Must be in writing and signed by the grantor (LPA 1925, s 53(1)(a)).
Who is the covenantee?
The person who receives the benefit of the promise.
Who is the covenantor?
The person who makes the promise and can be sued if the covenant is breached.
What is dominant land?
Land which is benefited by the promise.
What is servient land?
Land which is burdened by the promise.
What is a positive covenant?
A promise to do something, usually involving expenditure of money/time/effort.
What is a negative covenant?
A promise not to do something and can be complied with by inaction.
What is the ‘hand in pocket’ test?
A method to determine if a covenant is positive or restrictive - if the covenantors have to spend money or time to perform the covenant, it is positive
Haywood v Brunswick Permanent Benefit Building Society
What are mixed covenants?
Covenants that can be interpreted as either separate covenants or an obligation with a condition attached.
What is the general rule regarding the burden of a covenant?
The burden does not pass to a successor at common law.
Austerberry v Oldham Corporation
What must a covenant satisfy to pass the burden at equity?
It must satisfy the rule in Tulk v Moxhay.
What are the requirements for a covenant to pass the burden at equity?
- Must be restrictive
- Must accommodate the dominant tenement
- Must have intention for the burden to run (express or implied)
- Must have notice of the covenant (protected by notice/class D(II) land charge)
What is required for the burden to pass in terms of proximity?
The dominant land and servient land must be in proximity.
What does LPA 1925, s 79 state regarding covenants?
A covenant relating to land shall be deemed to be made by the covenantor on behalf of his successors in title unless contrary intention is expressed.
What must be shown for a breach to be enforced by a successor covenantee under the rules in equity?
The benefit must also have passed at equity.
What are the two elements for the benefit to pass in equity?
- The covenant must ‘touch and concern’ the dominant land
- The benefit must pass by one of the methods in Renals v Cowlishaw.
What are the methods for the benefit to pass under the equitable rules?
- annexation (express or statutory)
- assignment
- building scheme
What is express annexation?
When the express words of the covenant make it clear that the benefit becomes part of the dominant land.
equitable rules
What is statutory annexation?
LPA 1925, s 78(1) provides that a covenant shall be deemed made with the covenantee and his successors, but this can be expressly excluded
equitable rules
What is required for an assignment of the benefit of a covenant?
Must be in writing and signed by the person transferring the benefit (LPA 1925, s 53(1)(c)).
equitable rules
What conditions must be met for a building scheme to apply?
- All buyers buy from the same seller
- Seller divided the estate into plots
- Covenants intended to benefit all plots
- Each buyer buys on the understanding that covenants benefit all plots.
Ellison v Reacher
equitable rules
What remedies are available for breaches of restrictive covenants when the benefit and burden has passed in equity?
- Injunctions
- Prohibitory or mandatory injunctions.
these are discretionary and subject to the equtiable principles
What is the general rule regarding the burden of a covenant at common law?
The burden does not pass to a successor.
As it is unlikely that the burden will pass under the common law rules, what options do the DT owners have?
Sue the original covenantor - but the only remedy will be damages
What must an original covenantor seek from a successor to protect themselves from liability?
An indemnity covenant promising to comply and indemnify for any loss incurred due to breach - this should be sought every time the burdened land is sold
What is the limited exception to the general rule regarding burdens?
The doctrine of mutual benefit and burden.
This applies as long as:
- there is a clear link between the benefit and burden
- there is a genuine choice as to whether or not to take the benefit
- the benefit and burden were conferred in the same transaction
Halsall v Brizell
What are the two ways of passing the benefit at common law?
- Express Assignment (in writing with express notice to the covenantor)
- Implied Assignment.
Can covenants in leases be enforceable against successors in title?
Yes
What are the requirements for implied assignement of the benefit under the common law?
P&A Swift investments v Combined ENglish Stores Group plc 1989:
1. the covenant must touch and concern the land
2. there must have been an intention that the benefit run with the DT (this will be implied in as long as it is not expressly excluded)
3. the original covenantee must have a legal estate in the DT
4. the successor covenantee must hold a legal estate in the DT.
What must be done for the burden of a covenant in registered land to pass under equity?
A notice must be entered against the title of the burdened land.
What must be done for the burden of a covenant in unregistered land to pass under equity?
- covenants created pre 1926 –> doctrine of notice applies, so they do not need to be registered and will be enforceable on anyone except equity’s darling
covenants created after 1926 –> must be registered as a Class D(ii) Land Charge against the name of the original covenantor
What happens to a covenant if the same person becomes the owner of both dominant and servient land?
It will automatically be discharged.
What power does Law of Property Act 1925, s 84(1) give the Lands Chamber?
The power to wholly or partially discharge covenants.
What are the two ways the DT owner may agree to discharge the covenant?
- expressly –> usually in return of payment, done by deed
- impliedly –> they do nothing when the covenant is being openly breached
Under what condition can a restrictive covenant be discharged wholly or partly by the Lands Chamber?
- S 84(1)(a): it has become obsolete due to changes in character
- S 84(1)(aa): its continued existence impedes the reasonable use of the land
- S 84(1)(b): the dominant owners expressly or impliedly agrees
- S 84(1)(c): the dominant owners will not suffer injury
LPA 1925
