Freehold covenants

Question 1

What is a freehold covenant?

Answer 1

Contractual promise to do or not to do something

Question 2

Restrictive Covenant

Answer 2

Prohibits/restricts the owner doing something

Question 3

Positive Covenant

Answer 3

Means you have to do something e.g take positive action

Question 4

Covenantor

Answer 4

They have the burden. They are the one making the promise to the landowner.

Question 5

Covenantee

Answer 5

They have the benefit. The one the promise is made to

Question 6

Dominant land

Answer 6

That of the covenantee

Question 7

Servient Land

Answer 7

That of the covenantor

Question 8

Who can take action when a covenant is broken

Answer 8

Only the person who has the benefit and they can only take action against the person who has the burden

Question 9

Original Parties - Original Covenantee

Answer 9

Due to privity of contract the original covenantee will always be able to enforce it against ANYONE who has the burden

Question 10

Original Parties - Original Covenantor

Answer 10

As they are a party to the contract, they will continue to be liable under it even if they sell the land to someone else. It doesn’t matter if the covenant is positive or restrictive as long as it relates to the land. Essentially the covenantor is liable forever

Question 11

Original Parties - Indemnity Covenant

Answer 11

To protect the original covenantor against liability when selling they can require the buyer to give a covenant to perform the original covenants and indemnify the original covenantor against the consequences of any breach

Question 12

The main question to ask when selling land - Will the benefit and burden pass to the successors? - Two sets of rules

Answer 12

1) Common Law
2) Equity
Can’t mix and match
A person claiming they have the benefit of a covenant at common law must prove that the other party has the burden of the covenant at common law and vice versa

Question 13

What happens when the original covenantee sells the land to someone else (benefit) - General rule

Answer 13

The benefit can pass under common law and in equity

Question 14

What happens when the original covenantee sells the land to someone else (benefit) - Common Law

Answer 14

The benefit can pass to a successor under common law by one of two ways:
1) Express assignment
2) Pass automatically - if certain conditions are met
Rules apply whether the covenant is positive or negative

Question 15

What happens when the original covenantee sells the land to someone else (benefit) - Common Law - Express assignment

Answer 15

Has to be done at the same time as the transfer of the land (rare in practice)

Question 16

What happens when the original covenantee sells the land to someone else (benefit) - Common Law - Automatically - Conditions

Answer 16

1) Must ‘touch and concern’ the land of the covenantee (it must either affect the way the land is occupied or affect the value of the land).
2) Both the original covenantee and the person now seeking to enforce the covenant must have a legal estate in the land.
3) The original parties must intend that the benefit of the covenant is to run with the land - might be express words or if after 1st Jan 1926 assumed under S.78

Question 17

What happens when the original covenantee sells the land to someone else (benefit) - Equity

Answer 17

Can pass at equity if:
1) The covenant touches and concerns the land (affect the way the land is occupied or affect the value of the land)
2) The benefit has passed either by express assignment (express words) at the time of the transfer or by annexation (after 1st Jan 1926 assumed under S.78)

Question 18

What happens when the original covenantor sells the land to someone else (burden) - Common Law

Answer 18

Common Law will not impose the burden on the successor - it will not run.

Question 19

What happens when the original covenantor sells the land to someone else (burden) - Common Law - Indirect way of enforcing covenant

Answer 19

Principle of mutual benefit and burden - A successor in title who takes the benefits of rights in a deed must accept the burden of covenants connected to those rights contained in the same deed.

Question 20

What happens when the original covenantor sells the land to someone else (burden) - Equity

Answer 20

Equity is prepared to enforce a covenant against a successor in title to the original covenantor where that successor has notice of the covenant. There are conditions

Question 21

What happens when the original covenantor sells the land to someone else (burden) - Equity - Conditions

Answer 21

1) Covenant must be restrictive
2) Covenant must touch and concern the land (affect the way land is occupied or affect the value of the land)
3)The original parties must intend that the benefit of the covenant is to run with the land - might be express words or if after 1st Jan 1926 assumed under S.79 - covenant is deemed to be made on behalf of successors)
4) The successor must have notice of the covenant - registered or Class D(ii) charge

Question 22

Remedies for breach - Restrictive Covenant - Injunction

Answer 22

Preventing a party doing something. Only against current covenantor

Question 23

Remedies for breach - Restrictive Covenant - Damages

Answer 23

Could be in place of an injunction or in addition to an injunction.

Question 24

Remedies for breach - Restrictive Covenant - Original covenantor

Answer 24

Can only bring a claim in damages against them. If they have an indemnity covenant then they can claim money back from current covenantor

Question 25

Remedies for breach - Positive Covenant - Specific Performance

Answer 25

Only against original covenantor. If they have sold their land then the burden does not run either in common law or equity. In this situation the current covenantee will have to sue the original covenantor for damages and hope the original covenantor has taken an indemnity covenant from current covenantor