Freehold Covenants Flashcards
An accountant is the freehold owner of two houses. He lives in one house (‘the Retained Land’). He sells the other house (‘the Property’) to a dentist. The transfer contains the following clause:
“For the benefit and protection of the Retained Land the Buyer and his successors in title covenant with the Seller and his successors in title to only use the Property as a private dwelling house”
The dentist sells the Property to a teacher. The accountant sells the Retained Land to a builder. The teacher sells the Property to a florist.
Which of the following answer best describes the parties to the various transactions?
A-The accountant is the original covenantor and the florist owns the land burdened by the covenant.
B-The dentist is the original covenantor and the builder owns the land which benefits from the covenant.
C-The dentist is the original covenantor and the accountant owns the land which benefits from the covenant.
D-The dentist is the original covenantee and the florist owns the land which benefits from the covenant.
E-The accountant is the original covenantee and the builder owns the land burdened by the covenant.
The correct option is B.
The dentist is the original covenantor. Option D is, therefore, wrong.
The florist now owns the land burdened by the covenant – the Property.
The original covenantee was the accountant. Option A is, therefore, wrong.
The builder now owns the land that benefits from the covenant. Option E is, therefore, wrong.
Option C is wrong as, although the dentist is the original covenantor, the accountant no longer owns the land benefitting from the covenant.
Ten years ago, a dairy farmer sold part of his land to a livestock veterinarian to keep her horses on. In the transfer, the veterinarian covenanted that she would erect a boundary fence and maintain it.
Three years ago, the farmer passed away and his son inherited the farm. Last year, the veterinarian sold the land to the manager of a local equestrian school.
On a recent inspection, the farmer’s son noticed that the manager had removed the fence and when challenged, he refused to reinstate it.
Can the farmer’s son compel the veterinarian to reinstate the fence?
A-Yes, because the burden of the covenant has passed to the veterinarian in common law and in equity.
B-Yes, because damages would not be an adequate remedy.
C-No, because the burden of the covenant has passed to the manager.
D-No, because the farmer was the only person that could have pursued remedies against the veterinarian.
E-No, because the only remedy that he can pursue from the veterinarian is damages.
Option E is correct as an order for specific performance would be unenforceable against an original covenantor that has no control over the land; the only available remedy would be damages. Option B therefore is wrong.
Option A is not the best answer as the source of the veterinarian’s obligations is contractual. The veterinarian was the original covenantee.
Option C is wrong as the burden of positive covenants cannot pass in common law or in equity.
Option D is wrong as the veterinarian remains liable for the covenant after she has sold the land and the farmer’s son is likely to have the benefit of the covenant at common law.
Quick Q:
A solicitor is acting for a buyer of a house. The house has a registered freehold title and the seller is a sole registered proprietor. The seller’s solicitor tells the buyer’s solicitor that the house is subject to a covenant which states that it must only be used for residential purposes. The buyer also tells his solicitor that when the seller’s mother showed him around the house, she commented that the house had been a good investment for her and her son and she hoped it would be for the buyer too.
Which of the following statements best explains whether the buyer may be bound by the issues affecting the title to the house?
The buyer will be bound by the restrictive covenant if it is noted in the Charges Register of the title and he may also be bound by any trust interest which the seller’s mother has in the house even if there is no entry on the register in respect of it.
D is correct – despite being worded in a positive way, the substance of the covenant is restrictive, so A and B are wrong. In the registered system a restrictive covenant must be protected by a notice on the Charges Register in order to bind successors in title. As regards the seller’s mother, she may have a trust interest if she invested money in the house. This trust interest may be overriding if she is also in actual occupation of the house and the conditions of paragraph 2 of Schedule 3 of the Land Registration Act 2002 are satisfied. Overriding interests bind even though there is no mention of them on the registered title therefore, option C is wrong. Finally, whilst a beneficiary can register a restriction on the Proprietorship Register, this does not protect the trust interest, instead, it alerts a potential buyer of the need to overreach the trust interest. So option E is wrong.
The owner of a freehold farmhouse, who completed the purchase of the property 6 months ago, has started to use one of the outbuildings for her printing business. Her neighbour, the current freehold owner of the adjoining field, has now complained that the noise of the printing press disturbs the cattle grazing in the field and has produced a copy of the transfer deed entered into 3 years ago when the previous owner of the farmhouse sold off the field to its previous owner. The transfer deed included the following wording:
“The Seller with the intent and so as to bind the retained land [the farmhouse and outbuildings] and to benefit and protect the land hereby transferred to the Buyer [the field] hereby covenants with the Buyer that he and his successors in title will use the retained land for domestic and agricultural use only.”
The “Seller” and the “Buyer” were defined in the transfer deed as including successors in title. A notice recording the wording above was registered in the register of title of the farmhouse at the time. The owner of the farmhouse had no knowledge of this deed as she did her own conveyancing.
Can the neighbour take action to stop the owner of the farmhouse using the outbuilding for her printing business?
Yes, because the covenant has been registered on the register of title of the farmhouse.
Option A is correct because this is a restrictive covenant, the benefit and burden of which can pass to successors of the original parties to the covenant. The requirements for the benefit of the covenant to pass automatically have been satisfied (even though there is no evidence of express assignment) and the requirements for the burden to pass have also been satisfied. The wording in the transfer deed means that the benefit of the covenant has been expressly annexed and the wording also shows an intention for the burden to run. Crucial to the enforcement of the burden is that the current owner of the farmhouse must have had notice of the covenant. The facts make it clear that the covenant was registered on the title to the farmhouse before the date of registration of the current owner.
Option B is wrong because it is not true to say that the benefit and burden of all freehold covenants will pass. As explained above, certain requirements must be satisfied for the benefit and burden of freehold covenants to pass with the land (including registration of the covenant on the title register of the burdened land in registered land) and only the burden of restrictive covenants can directly pass to the successors of the burdened land.
Option C is wrong because this is not a positive covenant. The covenant on these facts restricts what the owner of the farmhouse can do on their own land and so it is a restrictive covenant.
Option D is wrong because actual knowledge of the covenant is not required in order to bind the buyer of the burdened land – the registration of the notice on the register of title of the farmhouse amounts to notice of the covenant to the current owner.
Option E is wrong because the benefit of the covenant does not remain solely with the original covenantee and has passed to the current owner of the field.
An entry on the Charges Register of a registered freehold title reveals a notice of a covenant. The covenant states that the land can only be used for residential purposes and it is not expressed as being personal to the original parties. The covenant also states that it is intended to benefit the neighbouring freehold title, which is also a residential property. The wording of the covenant, however, makes no mention of the intention for the burden to run with the land.
Does the burden of this covenant run with the land?
Yes, because all the requirements for the burden to run have been satisfied.
Option D is the correct option. The covenant is restrictive, there appears to have been identifiable land owned by the covenantee at the time the covenant was created, the covenant touches and concern the benefited land (see below), the intention for the burden to run will be implied by s79 LPA 1925 (as it has not been expressly shown) and the owner of the burdened land has notice of the covenant through its registration. Consequently, the burden of the covenant does run with the land.
Option A is wrong because the covenant does “touch and concern” the land. The covenant benefits only the owner of the benefited land for the time being (if separated from the land, it would cease to be advantageous to them), it affects the value of the benefited land (the value could drop if the burdened land was not used for residential purposes) and the covenant is not expressed to be personal.
Option B is wrong because this covenant would be interpreted as being restrictive in nature despite being worded in a positive fashion. It is the substance and not the wording which determines the nature of the covenant.
Option C is wrong because the intention for the burden of a covenant to run with the land can be implied by virtue of s79 LPA 1925, as indicated above in the explanation supporting Option D.
Option E is wrong because registration of the covenant does not of itself confirm that the burden of it would run with the land.
Five years ago, the owner of a large country estate sold part of the land to his neighbour. The land sold included a small cottage. In the transfer of the land the neighbour agreed to only use the cottage for residential purposes and also agreed not to allow the cottage to fall into disrepair. Both covenants were registered at the Land Registry. Last year the neighbour sold the cottage to a property developer.
Which of the following statements best describes whether the property developer has the burden of the covenants?
The property developer will only have the burden of the covenant for residential use at equity but will not have the burden of either at common law.
Option B is the best answer because the burden of the restrictive covenant will pass at equity to burden the property developer under the rule in Tulk v Moxhay. The covenant only to use the cottage for residential purposes:
is negative (or restrictive) in substance;
was made to benefit the dominant land;
touched and concerned the dominant land;
was made with the intent of burdening the servient land; and
the property developer had notice of the covenant.
The burden of neither covenant will pass at common law (as confirmed in Austerberry v Corporation of Oldham).
Option A is wrong because the burden of the restrictive covenant will pass at equity under Tulk v Moxhay.
Option C is wrong because only the burden of restrictive covenants will pass at equity. The covenant not to allow the cottage to fall into disrepair is positive in nature.
Option D is wrong because the burden of covenants cannot pass at common law.
Option E is wrong because the repairing covenant is a positive covenant and the burden cannot pass at common law or equity.
A client owns a freehold property with a registered title. When the client bought the property, their solicitor advised them that the property had the benefit of two covenants over a piece of adjoining land. The covenants were entered into when the previous owner of the client’s property sold off the adjoining land to a developer.
The two covenants provided that the developer was required to build and maintain a fence on the adjoining land and that the developer would not be allowed to use the adjoining land for business purposes. The covenants were given by the developer on behalf of himself and his successors and with the intent that the burden of the covenants would run with the adjoining land. Both covenants were registered in the Charges Register of the title to the adjoining land immediately following the sale to the developer.
The developer sold the adjoining land six months ago to a dentist who has just started running her dental practice from the adjoining land. She is also refusing to maintain the fence. The title to the adjoining land reveals that the dentist agreed to observe the two covenants and indemnify the developer if the developer suffered any loss as a consequence of the dentist’s breach of covenant.
Which of the following best describes the action that the client can take against the dentist?
The client can sue the dentist only for breach of the covenant not to use the land for business purposes.
Option B is correct. The burden of a covenant can only pass (in equity) if it meets the requirements laid out in Tulk v Moxhay: it is restrictive, it was made to benefit dominant land retained by the covenantee, it touches and concerns the covenantee’s land, there was an intention that the burden would run with the burdened land and the owner of the burdened land had notice of the covenant. The covenant not to use the land for business purposes satisfies all these requirements: it is restrictive, it was made to benefit the client’s property and it touches and concerns that property, there is an express intention that the burden would run and we are told that the covenant was appropriately registered. The covenant to build and maintain the fence is positive, however and so the burden of that covenant does not pass (despite its registration). It cannot therefore be enforced directly against the dentist.
Option A is wrong. As explained above, although the burden of the covenant not to use the land for business purposes passes to the dentist, the covenant to maintain the fence is positive and the burden of that covenant does not pass.
Option C is wrong. A covenant that is expressed as personal would not touch and concern the covenantee’s land but the facts indicate that this covenant was given by the developer on his own behalf and on behalf of his successors in title. It was not, therefore, expressed to be personal to the developer.
Option D is wrong because, as discussed at Option B above, the burden of a restrictive covenant does run with the land if the requirements laid out in Tulk v Moxhay are satisfied. The client can sue the dentist for breach of the restrictive covenant even though the dentist was not a party to the original covenant. Not being a party to the original covenant would, however, preclude the direct enforcement of the positive covenant against the dentist.
Option E is wrong. Although we are told that the dentist gave an indemnity covenant to the developer, this simply means that if the client sues the developer, then the developer can in turn sue the dentist under the indemnity covenant. An indemnity covenant given by a successor covenantor does not allow direct action to be taken against them. The client can still sue the developer directly because the client has the benefit of both of the covenants and the developer is still liable as the original covenantor.
A married couple owned a registered freehold title consisting of a house and several acres of surrounding land. Three years ago, the couple sold part of the surrounding land to a developer. In the transfer deed, the developer entered into a covenant with the couple not to let the boundary fence between the two pieces of land fall into disrepair. The covenant was duly registered as a notice on the Charges Register of the title to the part of the land sold.
Last month, having not carried out any work on the land and letting the boundary fence fall into disrepair, the developer sold its land to a builder. The builder promised the developer in the transfer deed that the builder would comply with the covenant and indemnify the developer if he failed to do so.
Which of the following best describes the action that the couple can take against the builder for the breach of the covenant?
A-The couple cannot take any action against the builder for letting because it was the developer that let the fence fall into disrepair.
B-The couple can seek an injunction against the builder preventing him from letting the fence fall into disrepair.
C-The only action the client can take against the builder is a claim for damages.
D-The couple cannot sue the builder directly but can sue the developer for damages and this might lead to indirect enforcement against the builder.
E-The couple can sue the builder for damages because the covenant has been registered as a notice on the Charges Register of the title to the builder’s land.
Option D is correct. Whether a covenant is positive or negative is determined by its substance rather than its wording. Although worded negatively, the covenant is a positive one as the substance is that the fence must be kept in repair. The burden of a positive covenant cannot pass directly to a successor but the original covenantor will remain liable. The couple can therefore sue the developer for this breach and because the builder entered into an indemnity covenant with the developer, the developer will claim under that indemnity if it is successfully sued by the couple. The possibility of the developer enforcing the indemnity could encourage the builder to repair the fence.
Option A is wrong because the reason why the couple cannot take action against the builder is that the burden of the covenant has not passed to the builder directly.
Option B is wrong for two reasons: first, as above, because the burden of the covenant has not passed to the builder directly and secondly, because an injunction is a remedy relevant to the enforcement of restrictive, rather than a positive covenant.
Option C is wrong because the burden of the covenant has not passed to the builder directly so damages would not be available against the builder.
Option E is wrong because even though there is a notice of the covenant on the Charges Register, this does not pass the burden of a positive covenant to a successor to the original covenantor.
The owner of a freehold house (‘the Owner’), which included a substantial garden, sold part of the garden to a developer, who subsequently built a house (‘the Property’) on the land. In the transfer the Owner granted a right of way over a driveway alongside the house, providing access to and from the main road, subject to a covenant by the developer to pay half of the cost of maintaining the driveway. The transfer was duly registered. Last year the developer sold the Property to a couple and earlier this year the Owner sold the freehold house to a new owner, a woman. The couple are refusing to contribute to the cost of maintaining the driveway as they say this obligation does not apply to them.
Can the new owner of the freehold house enforce the covenant against the couple?
A-No, because the benefit of the covenant has not passed to her and the burden of the covenant has not passed to the couple.
B-No, because the benefit of the covenant has passed to her but the burden of the covenant has not passed to the couple.
C-No, because the benefit of the covenant has passed to her but the covenant can only be enforced against the developer.
D-Yes, because the benefit of the covenant has passed to her and the burden has passed to the couple as the covenant contained in the transfer was registered.
E-Yes, because the benefit of the covenant has passed to her and the use of the right of way is linked to the covenant.
Option E is correct. The benefit of the positive covenant has passed to the new owner at common law (the covenant touches and concerns the land, there will be express or implied intention that the benefit should run, the original covenantee and the buyer of the benefitted land had/have a legal estate in the land) and in equity (through annexation or assignment). The covenant is a positive covenant and the burden of this does not pass at common law (Austerberry v Corporation of London) nor in equity (Tulk v Moxhay), however the doctrine of mutual benefit and burden under Halsall v Brizell applies. There is an alternative way of enforcing the burden of the positive covenant. The right to use the driveway benefits the couple’s land and the use of this is conditional on their contributing towards the cost of its maintenance. It enables the owner with the benefit of the covenant to prevent the exercise of the right if the costs of maintenance have not been paid.
Option A is wrong. As per the answer to Option E, the benefit of the positive covenant has passed to the new owner and although the burden of the positive covenant has not passed to the couple at common law nor in equity, it can be enforced through the doctrine of mutual benefit and burden under Halsall v Brizzell.
Option B is wrong for the same reasons as in Option A.
Option C is wrong. As per the answer to Option E the benefit of the positive covenant has passed to the new owner. The developer remains liable as the original covenantor (privity of contract and s.79 LPA 1925) but it is wrong that the covenant can only be enforced against the developer as the doctrine of mutual benefit and burden applies under Halsall v Brizell.
Option D is wrong. As per the answer to Option E the benefit of the positive covenant has passed to the new owner. The burden of the positive covenant will not pass at common law nor in equity regardless of registration (Austerberry v Corporation of London and Tulk v Moxhay).
