Freehold Covenants Flashcards
What status do freehold covenants have and how are they created?
Can only be an equitable interest in land and not a legal one
To create an equitable interest:
- Must be in writing and signed by the parties making the promise
Who is a covenantor and who is a covenantee?
Covenantor – person making the promise
Covenantee – person benefiting from covenant
What is the key way to identify the difference between a positive and restrictive covenant?
Positive covenants require some effort or expenditure to perform the obligation; restrictive ones don’t
When land is sold on, how does the burden pass at common law?
Covenants (whether restrictive or positive) cannot pass to a successor in title under common law
When land is sold on, how does the burden pass in equity?
Only passes for restrictive covenants if certain conditions are met
Positive covenants don’t naturally pass to a new owner
When will a successor in title be burdened by a restrictive covenant (in equity)?
Conditions from Tulk v Moxhay:
1) Covenant must be negative – restrictive covenant
2) Covenant was made (at creation) to benefit the dominant land retained by the covenantee
- In other words, covenantee must have owned land for the benefit of which the covenant was taken
3) It touches and concerns the dominant land
- Must not be personal (given to one specific owner)
4) Original parties must have intended the burden to run with the covenantor’s land; and
- May be expressly stated in deed
- If not express, the burden runs impliedly by LPA 1925
5) The owner of the servient land (the successor) had notice of the covenant – must have been registered to bind the successor in title
- If noted on the Charges Register, notice is deemed
By what alternate methods can the burden of positive covenant indirectly pass?
- Create a lease as restrictive and positive covenants are binding on successors in title
- Indemnity covenants - buyer agrees to indemnify seller if they breach the positive covenant
i) The original covenantee cannot sue the current owner, but they can sue the original covenantor who will be reimbursed through the chain of indemnity covenants
- Mutual burden and benefit (Halsall v Brizell)
i) Where there is a close link between benefit and linked burden and successors in title can choose to accept the burden + benefit together or refuse to take them
ii) It allows the owner of benefited land to prevent exercise of rights by the successor in title
Example – right of way granted subject to buyer paying maintenance on it; if they choose to use the right of way, they must accept the positive covenant + seller of retained land can stop B using the right of way until maintenance is paid
When land is sold on, how does the benefit pass at common law?
1) Through annexation
2) Through assignment
Explain how the benefit at common law passes by annexation
The covenantee’s successor can enforce the covenant if:
1) The covenant must touch and concern the land
2) Must have been an intention for the benefit of those covenants to run
i) May be express in wording of covenant (express annexation)
ii) If not express, benefit runs impliedly by LPA 1925 (statutory annexation)
3) The original and the successor covenantee must hold legal estate in the land for this to work
Explain how the benefit at common law passes by assignment
The benefit can be expressly assigned to a successor in title:
- Must take place at same time as transfer of land
- Must be in writing and signed by assignor
- Written notice of assignment must be given to the one with the burden
When land is sold on, how does the benefit pass in equity?
1) Through annexation
2) Through assignment - works in the same way as at common law
Explain how the benefit in equity passes by annexation
1) Express + implied annexation
- Must be an intention that the covenant was supposed to run for the benefit of the land
- Express words like ‘for the benefit and protection’ + ‘each and every part’ ought to be used for express annexation
2) Statutory annexation – automatically annexes a covenant to each and every part of retained land if:
- Covenant created after 1925
- Covenant touches and concerns the land
- Land benefiting is identified in the transfer
What does the rule of matching the benefit and burden of a covenant mean?
If they want to sue a successor using the equity rules, they must prove they have the benefit in equity too
If they want to use the common law rules to sue (original party maybe), they must prove they hold the benefit at common law too
Remedies for breach of positive covenant?
Damages (contractual, common law) - most common
Specific performance (only enforceable against original covenantor)
Remedies for breach of restrictive covenant?
Injunction (restrain the breach)
- Could be against original covenantor or successor in title
- This is an equitable remedy, so there is no automatic right – the court may use their discretion to award damages instead + must have ‘clean hands’ to access this remedy
In what ways could a covenant be modified or discharged?
Could be an express release agreed between owners
Could extinguish a covenant through common ownership (servient and dominant land owned by same person)
Could go to Upper Tribunal Lands Chamber to get a restrictive covenant discharged
Could get insurance for breach of restrictive covenant, useful when you cannot trace a covenantee
