Freehold Covenants: Enforcement Flashcards
How does common law, equity, and statute interplay in determining the enforceability of covenants in property law?
The enforceability of covenants in property law is determined through a combination of common law principles, equitable rules, and statutory provisions.
This integrated approach ensures that the interpretation and enforcement of covenants consider both historical precedents and contemporary legal standards.
What are the critical questions to ask when determining the enforcement of a covenant?
When assessing the enforcement of a covenant, two crucial questions must be addressed:
- Firstly, who holds the benefit of the covenant? This party has the right to enforce it.
- Secondly, who bears the burden of the covenant? This party can be held liable for any breach.
What is the doctrine of ‘privity of contract’ and how does it apply to the enforcement of covenants?
The doctrine of ‘privity of contract’ stipulates that only parties to a contract can sue or be sued under it.
This principle applies to covenants, meaning the original covenantee, as a party to the covenant’s contract, can enforce express covenants against any party bearing the covenant’s burden, including successors in title.
Can the original covenantee enforce covenants against successors in title, and are there any limitations to this right?
The original covenantee can enforce express covenants against successors in title who bear the covenant’s burden.
However, this enforcement right is limited if the original covenantee has parted with all the land benefiting from the covenant, in which case they cannot sue the successors in title.
In a property sale, who typically assumes the roles of covenantor and covenantee, and what does this imply?
In a property sale, the buyer usually becomes the covenantor, and the seller becomes the covenantee.
This arrangement implies that the buyer agrees to certain conditions or restrictions regarding the use of the purchased land, while the seller retains certain rights or benefits associated with the land.
What legal actions can the original covenantee take against the original covenantor for a breach of covenant?
If the original covenantor breaches a covenant, such as by building on restricted land, the original covenantee (the seller) can take legal action to enforce the covenant. This can include obtaining an injunction to stop the breach or seeking damages for any harm caused by the breach.
How does s 79 of the Law of Property Act 1925 affect the liability of successive covenantors for breaches of covenants?
Under s 79 of the Law of Property Act 1925, covenants made by the original covenantor are deemed to be made on behalf of themselves and their successors in title, unless stated otherwise in the deed.
This means successors can be held liable for breaches of covenants related to the land.
Does s 79 of the Law of Property Act 1925 apply to personal covenants, and what are the implications for liability?
No, s 79 of the Law of Property Act 1925 does not apply to personal covenants, which are those that do not relate to the land itself. If a personal covenant is breached by a successor, the original covenantor can still be liable under contract law, but not by virtue of s 79.
Are there any differences in liability for breaches of positive versus restrictive covenants under s 79 of the Law of Property Act 1925?
For the purposes of s 79 of the Law of Property Act 1925, the nature of the covenant, whether positive or restrictive, does not affect the liability.
The original covenantor can be held liable for all breaches of the covenant by successors, regardless of the covenant’s nature.
What is an indemnity covenant in the context of property sales, and why is it significant for the original covenantor?
An indemnity covenant in property sales is an agreement where the buyer (successive covenantor) promises to perform the covenants and indemnify the seller (original covenantor) against any future breaches. This is significant for the original covenantor as it offers protection against liabilities arising from breaches by future owners.
How does an indemnity chain work in the context of successive property sales?
An indemnity chain is created when each successive buyer (successive covenantor) agrees to indemnify their seller (previous covenantor) against breaches of covenants.
This chain ensures that liability for breaches can potentially be passed up the chain to the party directly above the breaching party.
How might insolvency, bankruptcy, or death affect the efficacy of an indemnity covenant chain?
Insolvency, bankruptcy, or death can undermine an indemnity covenant’s effectiveness by leaving the indemnifying party unable to fulfill their financial obligations.
If a party in the chain cannot pay for damages due to these circumstances, it may leave the preceding owner liable for the breach, despite the indemnity covenant.
What is the fundamental rule for determining whether action can be taken for breach of a covenant, and how does it differ between common law and equity?
When taking action for breach of a covenant, it’s crucial to use the corresponding set of rules:
At common law, if the party being sued is bound by the covenant’s burden, the party suing must also claim the covenant’s benefit under common law.
Similarly, in equity, if the burden of the covenant falls on the party being sued, the suing party must demonstrate they have the benefit in equity.
This ensures consistency in the application of legal principles across both realms.
What remedies are available against an original covenantor who still retains an interest in the land upon breach of covenant?
When the original covenantor retains an interest in the land, remedies for breach of covenant can include:
1. damages,
2. an injunction to restrain a breach of restrictive covenant, or
3. an order for specific performance in case of a breach of positive covenant.
What is the only remedy available against an original covenantor for a breach of covenant by his successor after the land has been sold?
Once the land has been sold, the only remedy available against the original covenantor for breaches by a successor is damages, as injunctions or orders for specific performance are unenforceable against the original covenantor.
