Freehold Covenants Flashcards
How is a freehold covenant validly created?
Must be in writing and signed by the grantor.
Who is the covenantee?
The person who receives the benefit of the promise.
What is the dominant land?
The land benefitted by the promise
Who is the covenantor?
The person who makes the promise
What is the servient land?
The land burdened by the promise.
Which type of covenants cannot be enforced in equity?
Positive covenants cannot be enforced in equity
How should you determine whether a covenant is positive or negative?
Hand in pocket test - does the covenantor have to exert money, effort or time to perform the covenant?
Consider - what is the essence of the obligation?
What is the approach to mixed covenants?
Covenants can be separated if that is possible or otherwise are understood as an obligation with a condition attached, and interpreted overall.
What is the general rule about whether a covenant will pass to a successor at common law?
The burden of the covenant will not pass.
When does the burden of a covenant pass in equity?
If it qualifies under the conditions of Tulk v Moxhay:
- Covenant is restrictive
- It accommodates the dominant tenement
- Intention for the burden of the covenant to run
- Notice of the covenant
What 3 aspects are there to the rule that the covenant must accommodate the dominant tenement?
Covenantee and their successor must hold an interest in land at the time of creation and enforcement
Covenant must touch and concern the land (some direct beneficial impact on the land)
Lands must be proximate (near to each other)
What three questions should be asked to judge whether the covenant touches and concerns the land?
Covenant should:
- Only benefit the dominant owner whilst they own the dominant land
-Affect the nature, quality, use, or value of dominant land - Not be expressly personal
How can intention be shown for the burden of a covenant to pass?
Expressly or impliedly via LPA s79 - covenant is deemed to also be made for successors unless a contrary indication is expressed.
How must notice of a covenant be shown?
Registered land: protected by entry of a notice in the charges register
Unregistered land: protected by a Land Charge
Donee bound either way.
What must be fulfilled for the benefit to pass in equity?
The covenant must touch and concern the land
The benefit must pass by one of the methods in Renals v Cowlishaw
- Building scheme
- Annexation
- Assignment
When does annexation occur and how?
When the covenant is made in such a way that the benefit becomes a permanent part of the dominant land itself. Occurs when the covenants are created.
- Express annexation
- Statutory annexation: LPA, 1925, s78
How does express annexation occur?
When the express words of the covenant make it clear that the original parties intend the benefit to become part of the dominant land, instead of just a personal advantage to the covenantee.
How does statutory annexation occur?
A covenant relating to land of the covenantee shall be deemed to be made with the covenantee and successors intended to be benefitted.
Can be expressly included if an alternative method of passing the benefit is stipulated in the original transfer deed.
How does assignment occur?
When the interest is treated as a separate interest in land - must be transferred every time the land is transferred.
Must be in writing and signed by the person transferring the benefit.
How do covenants operate in a building scheme?
If a building scheme is found, the covenants are by laws and interpret them as a ‘scheme of mutually enforceable obligations’.
Guidelines
- 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
If both the benefit and burden have passed in equity but the covenantor is in breach, what remedies are available?
Injunction most common - but this is discretionary.
Ongoing or threatened - prohibitory.
Already occurred - mandatory.
As the burden does not pass at the common law, where does the liability for the covenant remain?
Remains with the original covenantor - either expressly, or this is implied via LPA s79(1)
What remedy is there against the original covenantor in the common law?
Damages only - they are no longer in possession of the land.
How should the original covenantor protect itself against this?
The original covenantor should requires its successor to enter an indemnity covenant promising to comply with the covenant and to indemnify it for any loss incurred as a result of a breach.
This should happen each time the land is sold - creating a chain of indemnities.
