Freehold Covenants

Question 1

What is a covenant?

Answer 1

A covenant is a provision, or promise, contained in a deed to land. Land may be subject to a covenant which affects or limits its use. This is known as the burden of a covenant. A covenant may give a landowner some say over what is permissible on neighbouring property. This is called the benefit of a covenant

Question 2

Give examples of easements and covenants, positive and negative.

Answer 2

Easements: (positive)
- Mostly access
- Right of way on foot
- Vehicular access
- Pipes and cables
- Parking?
Easements: (negative)
- Light
- Support

Covenants (negative)

• Mostly restrictions on use
• Residential use only
• No fences
• Building lines and development

Question 3

How is a covenant created?

Answer 3

• Express only (no prescription/implication)
• Deed - just s1 LP(MP)A 1989
• Unlike easements, covenants can be about anything

Question 4

In what direction does the burden/benefit travel in different scenarios?

Answer 4

‘Passing the burden’ does from covenantor to covenantee

‘Passing the benefit’ goes from covenantee to covenantor

Question 5

What are the two different types of covenant?

Answer 5

Restrictive covenants

Positive covenants

Question 6

What case is relevant for historically ‘passing the burden’ and why was it decided in the way it was>

Answer 6

Talk v Moxhay (1848)

Highly inequitable for a party t pay less for an estate because it’s encumbered by a covenant, then sell it as unencumbered for a higher price

Question 7

For sale by covenantor, how is passing the burden different now to how it was historically like in Talk v Moxhay (1848)

Answer 7

• Burden still passes in equity
• Tulk v Moxhay swiftly limited to restrictive covenants entered into between freeholders
• REGISTRATION: for covenants on/after 1926, a notice must be entered into the charges register
• There must be land benefited by the restrictive covenant

Question 8

For sale by covenantee, how does the passing of the benefit work?

Answer 8

• By assignment

- By annexation: Covenant attached/annexed to land, thereafter covenant continues to pass with land

Question 9

How did the federated Homes Ltd v Mill Lodge Properties Ltd [1980] simplify passing the benefit?

Answer 9

The question of the case was: could the covenant be impliedly annexed to one bit of land without there having been an assignment of the benefit = NO

CA held: s78 means as long as covenant is ‘related to’ land of covenantee, will run with the land for successors in title

Question 10

Regarding the positive covenant rule for freehold estates, what two cases are most relevant and what did they establish?

Answer 10

Austerberry v Oldham Corporation [1885] - Only the burden of a restrictive covenant is transmissible (in equity)

Talk v Moxhay [1848] - Was it positive or negative - It prevents the successor from exercising a right he never acquired, doesn’t contradict CL: to compel the owner to comply with a positive covenant would flatly contradict the common law rule of privity

Question 11

Describe the facts of the case of Rhone v Stephens [1994]

Answer 11

• Burden of repairing the roof was not transmissible
• CL:
  Cannot enforce an agreement other than between the parties to the agreement - The covenant in the conveyances thus ineffective in passing burden at common law
• At equity, equity supplements not contradicts CL

Question 12

What did the Law Commission Report 327 recommend as a solution to freehold covenant problems?

Answer 12

‘Land Obligations’ - A new kind of legal interest in land

Question 13

Describe the limit of freehold positive covenants that is ‘fences’

Answer 13

• Can’t have a ‘set and forget’ covenant to maintain fence - will obvs bind original parties
• Not an easement, widely regarded as false

Question 14

Describe the limit of freehold positive covenants that is ‘flats’

Answer 14

• Not a trivial problem, but solid/established solutions exist - who will see to upkeep of common areas
• Use leasehold? - positive covenants enforceable
• Use commonhold? - exists since 2002 but rarely used

Question 15

Give 5 methods used as positive covenant workarounds in e.g. mews, close developments

Answer 15

1. Conveyancers’ devices: chain of covenants
2. Mutuality
3. Others e.g. estate rentcharge
4. Conditional Easements
5. Management structures for sharing costs

Question 16

What is a ‘chain of covenants’ as a conveyancers’ device?

Answer 16

• On sale, the purchase covenants to indemnify the seller for the same thing they covenanted
• Enforcement? Indirect… chains of actions to recover, passing damages down the line

Question 17

How does ‘mutuality’ work as a positive covenant workaround?

Answer 17

• Benefit and burden principle (Halsall v Brizell [1957] ) - Grant of a right of way (benefit) subject to an obligation that it be taken together with an obligation to contribute the cost of repairing the roadway
• Only works where the benefit and burden are inextricably linked

Question 18

How does ‘estate rentcharge’ work as a positive covenant workaround?

Answer 18

(coupled with right of re-entry)

Impose on a freehold transfer an obligation to do/pay for something, if they don’t, can go onto land to do it + entitlement to recover costs

Question 19

How do ‘conditional easements’ work as a positive covenant workaround?

Answer 19

Ellenborough Park - Owners of residential properties adjacent to parkland, which was vested in trustees, given right of common enjoyment - recently confirmed in Regency Villas v Diamond Resorts [2018]