Freehold covenants

Question 1

Common law - The burden of the covenant does not run with the land - it does not pass to the successor

Answer 1

Austerberry v Oldham Corporation (1885)

Question 2

Common law - Requirements for the benefit of the covenant to pass to the successor

Answer 2

• There has been an express assignment yes - express assignment (s.136 LPA)
  or
  it can automatically, conditions from Smith and Snipes:
  Covenant touches and concerns the land: must show that covenant affect mode of occupation or value of the land and is not personal
• Original covenantee and Claimant had legal estate
• Original parties intended it to run
  express anexation (transfer doc wording)
  Statutory (deemed) annexation (s.78 LPA 1925)

Question 3

1 - Austerberry v Oldham (1885)

Answer 3

Under common law - Burden does not pass because:
Privity of contract
s.79: Original covenantor remains liable

Question 4

Common law - Consider enforcement mechanisms for burden to pass

Answer 4

A Chain of indemnity covenants

Mutual benefit and burden rule (Halsell v Brizell [1957])

Question 5

‘A man cannot benefit to a deed without subscribing to obligations thereunder’

Answer 5

Principle which enabled the decision in Halsell v Brizell

Question 6

Which statute allows the benefit of the covenants to run with it?

Answer 6

s.78 LPA 1925

Question 7

Under common law will burden pass to successor covenantor?

Answer 7

Generally no - Austerberry v Oldham

Question 8

Under equity will burden pass to successor covenantor?

Answer 8

Yes, under Tulk v Moxhay if 
- covenant is restrictive
- covenant touches and concerns covenantee's land (apply Swift Investments) and
original parties intended burden to run:
express intention
deemed intention (s.79 LPA): and covenant is correctly registered
IARE: notice on charges register (s.32 LRA 2002) before date of registration of new purchaser
Unregistered land: Register as Class D(ii) land charge before date of completion of sale

Question 9

Has benefit passed at equity?

Answer 9

Covenant touches and concerns land of covenantee
One of the following applies:
Express assignment (s.136 LPA)
Original parties intended benefit to run:
Express annexation (wording of transfer doc)
statutory deemed annexation (s.78 LPA)

Question 10

What are the remedies?

Answer 10

Common law - damages only against original covenantor
Equity - Injunction/Specific Performance for breach of restrictive covenant against current owner of the land (equity may award damages in lieu)
Positive covenant only option is to sue original covenantor

Question 11

What ways can a covenant be discharged?

Answer 11

Express release - through a deed
Common ownership
s.84 LPA - by application to the Lands Tribunal if the covenantee cannot be located or refuses to release/modify the covenant (Re Vince’s Application)
Breach insurance - covenantor will be able to recover any loss incurred by the enforcement of his breach

Question 12

Burden must in some way relate to the benefit

Answer 12

Rhone v Stephens [1994]

Question 13

The covenant must touch and concern the land, it must not be personal

Answer 13

Swift Investments