Freehold covenants Flashcards
What is a covenant?
A promise to do or not do something.
Usually imposed when a person sells part of their land. Purpose is usually to maintain or enhance the value and/ or amenity of the land retained by the seller.
Not capable of being legal interests in land.
Formality is in writing and signed.
Types of covenants
Positive covenant = requires some effort or expenditure to perform the obligation.
Restrictive covenant = requires no such effort or expense.
It is the substance of the covenant that will define whether or not it is positive, rather than the wording of the covenant.
Running of the burden at common law
The burden of a covenant (whether positive or restrictive) cannot pass at common law.
The principle is based in contract law, where the common law rule is that only the benefit of a contract can be assigned, but never the burden.
Running of the burden in equity
The burden of a restrictive covenant may pass in equity under the doctrine in Tulk v Moxhay (1848) provided that the following requirements are satisfied:
(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
Covenantor/Covenantee definition
Covenantor = The person who makes the promise and who has the burden of the covenant
Covenantee = The recipient of the promise and who has the benefit of the covenant
Servient land/ Dominant land definition
Servient land = (Or burdened land) – the land bound by the covenant owned by the covenantor
Dominant land = (Or benefited land) – the land with the benefit of the covenant owned by the covenantee
Methods of enforcing a positive covenant
Positive covenants cannot run with the land, either at common law or in equity.
Three common law devices:
* Create a lease
* Indemnity covenant
* The doctrine of mutual benefit and burden – Halsall v Brizzell
Methods of enforcing a positive covenant - The doctrine of mutual benefit and burden – Halsall v Brizzell
Person who wishes to take advantage of a service/ facility which benefits their land must also comply with any corresponding obligation. It enables the owner of the benefited land to prevent the exercise of the rights if the costs of maintenance have not been paid.
Two pre- conditions as set out in Thamesmead Town Ltd v Allotey (2000):
(i) The burden must be ‘relevant to the exercise of the rights which enable the benefit to be obtained’. There must be a clear correlation between the benefit and the linked burden; and
(ii) The covenantor’s successors in title must have the opportunity to elect whether to take the benefit (and accept the related burden) or to renounce it (and escape the related burden).
Running of the benefit at common law
- Annexation
If the land benefiting from the covenant is sold, the covenantee’s successor can enforce the covenant at common law if the following rules are complied with:
(a) The covenant must touch and concern the land
(b) There must have been an intention that the benefit should run with the estate owned by the covenantee
(can be express implied)
(c) The covenantee must have a legal estate in the benefited land
Therefore, no benefit can pass where the original covenantee held an equitable interest.
(d) The buyer of the benefited land must also take a legal title in the benefited land
(legal estate does not need to be identical)
- Assignment
Express assignment that must take place at the same time as the transfer of the land.
Must be in writing and signed by the assignor (ie the original covenantee) and written notice of the assignment must be given to the person with the burden of the covenant.
Running of the benefit in equity
- Annexation
- Assignment
- Building schemes
Running of the benefit in equity - annexation
= the permanent attachment of the covenant to the dominant land.
Three methods of annexation:
1. Express annexation
Covenant should express an intention to benefit a defined piece of land
- Implied annexation
Court has been willing to imply annexation where such annexation was obviously intended and it would be an injustice to ignore that intention. - Statutory annexation
COA 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.
Remedies for breach of positive covenant
- Damages against the original covenantor by the original covenantee or a successor in title to the original covenantee (provided that they have the benefit of the covenant at common law).
- Specific performance may be available for the breach of a positive covenant by the original covenantor (but not a successor in title to the original covenantor). However, the original covenantor will have no control over the land, so can pay, but not necessarily perform the obligation.
Remedies for breach restrictive covenant
- Injunction to restrain the breach of a restrictive covenant.
Equitable remedy. - Pursue a claim against the original covenantee based in privity of contract for damages only.
Methods of removing or limiting the effect of a freehold covenant
*Express release
via deed
*Common ownership
Also called unity of seisin.
*Section 84 LPA 1925
Applies only to restrictive covenants. An application made to the Lands Chamber to discharge or modify the covenant in whole or in part.
Conditions:
(a) the restrictive covenant was found to be obsolete; or
(aa) the restrictive covenant impedes some reasonable use of the land and either:
(i) it does not secure any practical benefit or value to the persons it should benefit; or
(ii) it is contrary to the public interest
and in either case, money will be adequate compensation; or
(b) that those entitled to the benefit have expressly or impliedly agreed to the discharge; or
(d) that the discharge will not injure the persons entitled to the benefit.
Where the identity of the dominant owners is not certain, a preliminary application can be made to the court under s 84(2) LPA 1925 to establish the identity of the dominant owner(s).
*Insurance
This relates to restrictive covenants only. An insurance policy is purchased for a one- off premium.
