Freehold Covenants

Question 1

Definition

Answer 1

A covenant is a personal contractual promise given by a ‘covenantor’ to a ‘covenantee’ which is an equitable interest in land s1(3) LPA 1925. Covenants are not included in s1(2) LPA and so are not capable of being legal interests in land.

Question 2

Burden is owned by…

Answer 2

The covenantor and is the servient tenement

Question 3

Benefit is the land owned by…

Answer 3

The covenantee and is the dominant tenement

Question 4

Covenants must be created by deed under what sections?

Answer 4

s1 LP(MP)A 1989 and s53(1)(a) LPA, equitable interests must be made in writing as it is a personal contractual promise made without consideration

Question 5

s56(1) LPA 1925

Answer 5

Original covenantee can always enforce against the original covenantor even if it was made for the benefit of the land subsequently sold

Question 6

Beswick v Beswick

Answer 6

Clearly identified benefit to someone other than the original covenantee, substitute covenantee

Question 7

Enforcing the covenant against a successor in title to the covenantor at common law?

Answer 7

The burden cannot run with the land, so the covenant may only be enforced when the original covenantor retains title to the land

Question 8

Austerberry v Oldham Corporation

Answer 8

Leading case on the running of covenants! Equity will not enforce a positive covenant requiring trustees to spend money. Could only be enforced against the original covenantor due to privity of contract, the solution would be an indemnity contract.

Question 9

Four criteria from Tulk v Moxhay

Answer 9

1. The covenant must be negative in nature
2. It must ‘touch and concern’ the dominant land, more than a mere personal benefit
3. The original parties must have intended for the burden to pass with the land
4. The purchaser of the servient land must have notice of the covenant

Question 10

Tulk v Moxhay Lord Tottenham LC

Answer 10

“The question is not whether the covenant runs with the land but whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by a vendor, and with notice of which she purchased”. It will run in equity provided the requirements are met.

Question 11

Rhone v Stephens 1.

Answer 11

Lord Templeman, it has been clear and accepted that we are only talking about restrictive covenants when discussing Tulk v Moxhay, positive obligation to keep a roof wind and watertight in this case was not enforceable.

Question 12

Haywood v Brunswick 1.

Answer 12

Substance of the covenant and not the form that is important. LJ Cotton a covenant not to allow a brick wall to fall into repair, worded negatively but was positive.

Question 13

Powell v Helmsley 1.

Answer 13

The whole covenant may run with the land if the negative component is the dominant part. Enforcement of a positive covenant may arise ‘through the back door’.

Question 14

Shepherd Homes Ltd v Sandham 1.

Answer 14

Negative and positive components should be severed resulting in the severing of the positive component.

Question 15

Law Commission on severing… 1.

Answer 15

The distinction is illogical and both should be treated in the same way

Question 16

Positive covenants are still enforceable in a number of situations… 1.

Answer 16

A chain of indemnity covenants essentially the new purchaser promises to indemnify the seller for any breaches made by themselves from the date of purchase. The new purchaser will be sued by the old covenantor if they are sued by the original covenantee, usually backed up with a restriction on the proprietorship register s40 LRA 2002.

Question 17

Halsall v Brizell 1.

Answer 17

“A man who takes the benefit of a deed is bound by a condition contained in it, the D’s could not continue to use the roadways or other sewers unless they also paid for the maintenance of them.” If you want the benefit you have to take the burden.

Question 18

Davies v Jones 1.

Answer 18

The benefit and burden must be conferred in the same transaction. The enjoyment of the benefit must be relevant to the imposition of the burden. Person with the burden must have had the opportunity of disclaiming the enjoyment of the benefit. E.g if they do not have a car they can reject the driveway.

Question 19

Thamesmead Town v Allotey 1.

Answer 19

Dixon cites as a good example of Davies v Jones

Question 20

Smith & Snipes Hall Farm Ltd v River Douglas 2.

Answer 20

LJ Tucker said a covenant will be regarded as touching and concerning the land if it touches the land as regards to the mode of occupation or its value

Question 21

P & A Swift Investments v Combined English Stores Group plc 2.

Answer 21

LJ Oliver put forward a four-stage test to determine whether a covenant would be regarded as touching and concerning the land. 1. If it only benefits the freehold owner for the time he owns the land and is no benefit once he sells the land 2. Will affect the nature or quality or mode of use or value of the land 3. It mustn’t be expressed to be personal use only 4. The payment of money should be disregarded for this issue

Question 22

s79(1) LPA 1925 3.

Answer 22

A covenant is deemed to have been made by the original covenantor on behalf of himself and persons deriving title from him. This is done by expressing the intention in the deed, if not then section 79 arises. Important the benefit must have intended to run.

Question 23

Can a restrictive covenant override?

Answer 23

No

Question 24

What sections are relevant for the fact the purchaser must have notice of the covenant? 4.

Answer 24

S32 LRA 2002 must be registered as a notice, priority rules apply but NOT schedule 3 paragraph 2.

Question 25

Four Stages of enforcing a covenant against a successor in title to the covenantee at Common Law

Answer 25

The benefit of a covenant runs without express assignment if conditions are satisfied:

1. The covenant touches and concern the covenantee’s land (Smith and Snipes Hall Farm v River Douglas)
2. Covenantee must have held a legal estate in land at the time of the covenant
3. Successor in title to the original covenantee must hold a legal estate in land.
4. Intention that the benefit of the covenant should run with the land via annexation (federated homes)

Question 26

Smith and Snipes Hall Farm v River Douglas

Answer 26

Benefit of the land owned by the covenantee not just a personal benefit. Must affect occupation or value of the land. This was a covenant to keep canal banks in repair which met this requirement.

Question 27

Federated Homes v Mill Lodge Properties

Answer 27

Same as with burden, it could be noted expressly in the original wording of the covenant but if not then s78 steps in (section 79 for burden and 78 for benefit)

Question 28

Two stages for a successor in title to the original covenantee to have the benefit of the covenant

Answer 28

1. The covenant must touch and concern the covenantee’s land

2. The successor holds estate in the land subject to the original covenant

Question 29

The three modes prescribed by equity the benefit must have been transmitted by:

Answer 29

1. Assignment
2. Annexation
3. Schemes of development

Question 30

Re Pinewood Estate (assignment)

Answer 30

Assignment merely passes the benefit of the contract rather than passing the interest to the land itself.

Question 31

Federated Homes v Mill Lodge Properties

Answer 31

CoA decision changed the law on annexation, the benefit of any restrictive covenant that touches or concerned the land of the covenantee is automatically annexed to the land using s78. Simplifies the rules prior to this case, but criticised due to the breadth of its impact automatically occurring. Can put a contrary intention if they want s78 excluding but without this it is automatic.

Question 32

Schemes of development

Answer 32

Common vendor of land in a clearly defined area, with sale lots subject to the same restrictions, intended to be mutually enforceable.

Question 33

Brunner v Greenslade

Answer 33

Where there’s one original plot, any successors are presumed to be bound by the original plot of land despite not entering into covenants with each other. Covenants are mutually enforceable against all purchasers.

Question 34

If requirements are met at common law…

Answer 34

They are almost certainly met in equity also

Question 35

Extinguishment and Variation

Answer 35

Express discharge or variation, implied discharge, declaration by the court (s84(2) LPA 1925), discharge or modification by the Land Tribunal (s84(1) LPA 1925) on the grounds of obsolescence if not longer relevant or an impediment to the reasonable use of the land, impediment to reasonable use, consent or acquiescence by the dominant landowner, or no injury will be suffered by the dominant landowner.