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Freehold Covenants Flashcards

1
Q

What is a covenant?

A

A covenant is a promise which is usually contained in a deed, although a deed is not essential.

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1
Q

What is a coventee?

A

The person who receives the benefit of the covenant and owns the dominant land

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2
Q

What is the convenor?

A

the person who makes the promise.The covenantor can be sued if the covenant is breached.

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3
Q

What is a positive covenant?

A

A positive covenant obliges the covenantor to “put their hand in their pocket” and do something to comply with the covenant, either spend money or energy. The covenant cannot be complied with by inaction.

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4
Q

What is a negative/restrictive covenant?

A

A promise not to do something. This restricts the use of the land and can be complied with by inaction. ** Examples of restrictive covenants ** - Not to use the land for business purposes

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5
Q

What is needed for a covenant to be enforced in equity?

A

For a covenant to be enforced in equity, It must be shown that the benefit and burden have both passed using the rules of equity

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6
Q

What is needed for a covenant to be enfored in common law?

A

For the covenant to be enforced at common law, it must be shown that the burden and benefit have both passed using the common law rules.

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7
Q

What must the successor in title to the dominant land show in order to enforce the covenant?

A

That the benefit of the covenant has passed to them

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8
Q

In order for a successor covenantee to enforce a covenant against a successor covenantor, what must the successor covenantee show?

A

That the benefit of the covenant has passed to the successor covenantee and that the burden of the covenant has passed to the successor covenantor

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9
Q

Can a positive covenant be enforced in equity?

A

Positive covenants will not be enforced against a successor covenantor in equity.

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10
Q

What is the test for figuring out whether a covenant is positive or negative?

A

This is known as the ‘hand in pocket’ test. If covenantors have to put their hands in their pockets to find money to spend to perform the covenant, it is positive.

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11
Q

What is a mixed covenant?

A

A mixed covenant is a promise which has positive and restrictive elements.

Example: a covenant not to build on the land (the restrictive part of the covenant) without the consent of the owner (the positive post of the covenant) of the dominant land.

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12
Q

How do you interpret mixed covenants?

A

Mixed covenants, can be interpreted in one of two ways:
as separate covenants or
as one obligation with a condition attached

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13
Q

What is the overall approach to be taken when interpreting covenants as positive, negative or mixed?

A

Look at underlying substance of the covenant rather than the precise words used.

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14
Q

Which case sets out the test for the ‘hand in pocket’ test?

A

Haywood v Brunswick

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15
Q

Which approach is correct in interpreting a covenant not to build any extension to a house without the consent of the dominant owner?

A

This is a mixed covenant which is predominantly negative with a positive condition attached

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16
Q

What is the general rule for covenants?

A

As a general rule, the burden of a covenant does not pass to a successor at common law

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17
Q

What are the 4 rules for the burden of certain covenants to pass to successors?

A

The covenant must be restrictive
- The covenant must accommodatethe dominant tenement
- There must be intention for the burden of the covenant to run
- There must be notice of the covenant

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18
Q

If a covenant is positive, what are the 3 common law rules will apply to its enforcement?

A
  1. The covenantee and successor covenantee must hold an interest in land at the time of creation and enforcement
  2. The covenant must touch and concern the land
  3. The dominant land and the servient land must be in proximity
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19
Q

What happens of the covenant meets the requirements?

A

If they are satisfied, you then need to see if there is intention that the burden should run.

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20
Q

How can intention be shown?

A
  1. EXPRESSLY: the covenant is worded in such a way as to make it clear that successors are to be bound:
    ‘ A hereby covenants with B for himself and his successors in title to land known as…’ or
    ‘A hereby covenants with the intention of binding land known as…’
  2. IMPLIEDLY: LPA 1925, s 79 states that a covenant relating to land shall be deemed to be made by the covenantor on behalf of his successors in title, unless a contrary intention is expressed.
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21
Q

Assuming there is intention for the covenant to run, what else is necessary?

A

Assuming there is intention, which usually is the case, consider if the successor covenantor has notice. Is the burdened land registered or unregistered, this will determine how the covenant should have been protected so that the successor will have notice.

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22
Q

How is notice for a covenant on registered land shown?

A

The covenant must be protected by the entry of a notice in the charges register of the servient title (LRA 2002, s 32)

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23
Q

How is notice for a covenant on unregistered land shown?

A

The covenant must be protected by a Class D(II) Land Charge.
In either case, if not done, a purchaser for value of the burdened land will_not_ be bound, but a donee (someone who inherits of is gifted the estate) would be.

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24
Q

The successor covenantor must have notice of the covenant. In registered land and unregistered land, what is the effect if the covenant has not been protected in accordance with the relevant rule?

A

A purchaser for value will not be bound by the covenant but a donee would be

Although the rules are different depending upon whether the land is registered or not, the principle is the same. A purchaser of the land would not be bound, but a donee (someone who is gifted or inherits the land) will be.

25
Q

What must be shown if a successor covenantee wishes to enforce a breach against a successor covenantor direct?

A
  • that the burden of the covenant has passed to the successor covenantor in equity and
  • that the benefit has passed to the successor covenantee in equity
26
Q

What elements must be fulfilled for the benefit to pass in equity?

A

· The covenant must ‘touch and concern’ the dominant land
· The benefit must pass by one of the methods in Renals v Cowlishaw (1878)

27
Q

What are the methods by which a covenant could be passed by equity?

A

Annexation
Assignment
Building Scheme

28
Q

What is annexation?

A

This occurs when the covenant is made in such a way that the benefit becomes a permanent part of the dominant land itself.
It therefore passes automatically when the dominant land is sold, without being specifically mentioned in the transfer deed.

29
Q

What are the three ways for annexation to occur?

A

Express annexation, implied annexation,
Statutory annexation LPA 1925, s 78

30
Q

What is express annexation?

A

This occurs where the express words of the covenant make it clear that the original parties intend the benefit to become part of the dominant land, rather than simply a personal advantage to the covenantee.

31
Q

What is statutory annexation?

A

The Court of Appeal held that the effect of s 78 LPA 1925 was to automatically annex a freehold covenant to each and every part of the land retained by the covenantee provided the following criteria is met:
* the covenant must have been created after the implementation of the LPA, ie post-1925; and
* the covenant must touch and concern the land. The test in P & A Swift Investments v Combined English Stores Group plc can be used.
The broad application of the decision in Federated Homes has been reduced by:
(i) the ability of the original covenanting parties to exclude the effect of s 78 LPA 1925 from the transfer creating the covenant (Roake v Chadha [1984] 1 WLR 40); and
(ii) the need for the land to be benefited from the covenant to be identifiable from a description, plan or other reference in the transfer, aided, if necessary, by external evidence to identify the land (Crest Nicholson v McCallister [2004] 1 WLR 2409).

32
Q

What is assignment?

A

This occurs where the benefit of the covenant has not been annexed at the outset. The benefit can nevertheless be assigned when the dominant land is transferred. As the benefit exists separately from the land itself, it is treated as a separate interest in the land and must be transferred every time the land is transferred.
The separate assignment of the benefit must comply with the formalities in LPA 1925, s 53(1)(c): in writing and signed by the person transferring the benefit.
Assignment occurs at the time the dominant land is sold. The benefit must be assigned each time the land is transferred.

33
Q

What is a building scheme?

A

When a new housing estate is built, all houses are sold subject to the same covenants. New owners who wish to enforce a covenant against a neighbour may struggle to show that the benefit of a particular covenant has passed to them.
Building schemes resolve this problem relating to restrictive covenants only.
If the conditions of a building scheme are met, the covenants are treated as a set of by-laws enforceable by and against all owners. It is not necessary to show specifically that the benefit of a particular covenant has passed to a claimant.

34
Q

What are the conditions for a building scheme?

A

All buyers buy from the same seller
The seller divided the estate into plots
The covenants were intended to benefit all plots
Each buyer buys on the understanding that the covenants are intended to benefit all plots
Later cases have interpreted these rules as guidelines rather than strict requirements.

A court will need to be satisfied that it was the intention of the parties to create a scheme of mutually enforceable obligations.

35
Q

What is the position of the original coventee?

A

When dominant land is sold, the original covenantee technically still has the benefit of the covenant and can sue on it.

36
Q

As a restrictive covenant is an equitable interest in land, equitable remedies are available to enforce the breach against the current owner. What are these equitable remedies?

A

Injunction
Typically, if the breach is threatened or ongoing, the claimant can apply for a prohibitory injunction, ordering the breach to cease.

37
Q

Where the benefit of a covenant is expressly assigned, which formalities must be complied with?

A

The assignment must be in writing and signed by the person disposing of the benefit, LPA 1925, s53(1)(c).

38
Q

What is the Continuing liability of the original covenantor?

A

The effect of the rule is that at common law, a successor covenantor cannot be sued. However, the burden of a covenant does not disappear. It remains with the original covenantor permanently. This means that it is the original covenantor who has the burden of the covenant and can be sued for both its own breaches and the breaches of its successors.

39
Q

What is the remedy for common law covenants?

A

The only remedy available against the original covenantor is damages. This is because the original covenantor is no longer in possession or control of the land.

40
Q

What is an indemnity covenant?

A

As part of the sale process, the original covenantor (the seller) should require its successor (the buyer) enter an indemnity covenant promising to comply with the covenant and to indemnify (reimburse) it for any loss incurred as a result of a breach.

Enables the original covenantor to sue their direct successor.
If there is a complete chain of indemnity to the current owner in breach, it is therefore a method of indirect enforcement.

41
Q

What does an indemnity covenant not do?

A

It does not pass the burden of the covenant and it does not enable the current owner to be sued by anyone except their predecessor in title.

42
Q

Which is the most accurate statements on the effect of LPA 1925, s79?

A

The section makes the original covenantor liable for all breaches of covenant by any person who holds the land after the original covenantor has parted with it. It does not pass the burden of the covenant.

43
Q

What is the doctrine of mutual benefit and burden in Halsall v Brizell?

A

exception to the general rule that The burden of a covenant generally does not pass at common law

44
Q

What does the doctrine of mutual benefit and burden in Halsall v Brizell include?

A
  • the burden and benefit must be linked
  • the successor covenantor must have a choice whether to take the benefit and
  • the benefit and burden must be in the same transaction
45
Q

Which of these statements is the most accurate in describing how Rhone v Stephens refined the rule in Halsall v Brizell?

A

There must be a close link between the benefit in the nature of an easement and the burden of the covenant.

46
Q

To which of these covenants would the doctrine of mutual benefit and burden apply so that the burden of the covenant could pass at common law?

A covenant to keep the servient land well maintained and tidy

A covenant to erect and maintain a boundary fence between the dominant and servient land

A covenant to contribute towards the costs of the maintenance of a tennis courts, which the the servient land owner has a right to use and chooses to use

A covenant to contribute towards the repair and maintenance of an outdoor swimming pool, which the servient land owner has a right to use. The servient land owner is, however, choosing not to use the swimming pool and it does not like swimming.

A covenant to contribute towards the costs of the maintenance of a shared driveway, which the servient land owner has no choice but to use to access the servient land

A

A covenant to contribute towards the costs of the maintenance of a tennis courts, which the the servient land owner has a right to use and chooses to use

This is correct. The is a mutual benefit - the right to use the tennis court, which the servient land owner is choosing to take. Therefore, the burden will pass using the rule in Halsall v Brizell.

47
Q

What are the conditions for implied assignment?

A
  1. The covenant must touch and concern the land
  2. There must have been an intention that the benefit should run with the dominant land
  3. The original covenantee must have a legal estate in the dominant land
  4. The successor covenantee must hold a legal estate in the dominant land
48
Q

Which are the correct formalities for expressly assigning the benefit of a covenant at common law?

A

In writing, with notice given to the covenantor: LPA 1925, s 136.

49
Q

A sells part of its land to B. B enters into the following covenant with A in the transfer deed:

B covenants with A to wash A’s car every week

Which of the following reasons best explains why the covenant will not pass to a successor in title to A?

There is no express intention that the covenant should run

The covenantee does not hold a legal estate in the land at the time the covenant is granted

There is no express assignment of the covenant

The covenant does not touch and concern the dominant land

A

The covenant does not touch and concern the dominant land

A covenant to wash the covenantee’s car every week will not touch and concern the land as it has no impact on the quality, enjoyment or utility of the land. It is simply a personal privilege.

50
Q

What is discharging a covenant?

A

Discharge if a covenant means that it is no longer valid

51
Q

What is modifying a covenant?

A

Modification of a covenant means that the scope of the covenant is altered, but it is not completely invalidated.

52
Q

What is a merger?

A

A covenant will automatically be discharged if the same person becomes the owner of both the dominant and servient land

53
Q

How can covenants be discharged or modified?

A

Covenants can be discharged or modified in several ways:
* Merger
* Express release/modification
* Implied release/modification
* On one of the grounds in LPA 1925, s 84

54
Q

When can the lands chamber modify or discharge a covenant?

Law of Property Act 1925, s 84(1)

A

The grounds are:
* 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 agree
* S 84(1)(c): the dominant owners will not suffer injury

55
Q

Which judicial body determines applications to discharge or modify covenants?

A

The Upper Tribunal (Lands Chamber)

56
Q

How can the the dominant owner impliedly agree to discharge the covenant?

A

by doing nothing when the covenant is being breached openly.

57
Q

How can the the dominant owner expressly agree to discharge the covenant?

A

A dominant owner may expressly agree to discharge the covenant and will enter into a formal release of covenant, usually in return for a payment. The release must be made by deed.

58
Q

What type of covenants can be discharged or modified by the tribunal under LPA 1925, s84?

A

Restrictive covenants only

59
Q

he burden of a restrictive covenant may pass in equity under the doctrine in Tulk v Moxhay (1848) 2 Ph 774 provided that the following requirements are satisfied:

A

(a) the covenant must be negative (restrictive) in substance;
(b) the covenant must, at the time of the creation of the covenant, have been made to benefit dominant land retained by the covenantee;
(c) the covenant must touch and concern the dominant land;
(d) the covenant must be made with the intent to burden the servient land; and
(e) the owner of the servient land must have notice of the covenant for it to bind them

60
Q

Implied annexation?

A

In some situations the court has been willing to imply annexation where such annexation was obviously intended and it would be an injustice to ignore that intention. The required intention must be manifested in the transfer as construed in the light of all the surrounding circumstances

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