Freehold Covenants MCQs Flashcards
A man was the owner of two adjoining registered freehold properties, one called House 1 and one called House 2.
Three years ago, the man sold House 2 to a woman. The woman covenanted in the transfer deed with the intention of binding the land known as House 2 not to build any structure in the grounds of House 2 without the approval of the owner of House 1. The man’s solicitor did nothing to protect the covenant.
Two years ago, the woman sold House 2 to a new owner. The new owner has recently built a structure in the garden of House 2 without obtaining the man’s approval.
Which statement best explains why the burden of this covenant has failed to pass to the new owner in equity?
The burden of the covenant will not run because the original parties did not intend the burden to run.
The burden of the covenant will not pass because the covenant is positive
The burden of the covenant will not pass because the new owner had no notice of the covenant
The burden of the covenant will not pass because the covenant does not touch and concern the dominant land
The burden of the covenant will not pass because the dominant land and servient land are not sufficiently proximate
The burden of the covenant will not pass because the new owner had no notice of the covenant
This is correct. As House 2 is registered land, the man should have protected the covenant by the entry of a notice on the charges register of House 2 (s32 LRA 2002). This did not happen at the time the covenants were entered into. Therefore, the new owner, as a purchaser for valuable consideration of House 2, takes free of the unprotected covenant (s29(1) LRA 2002).
The other answers are incorrect because the covenant is actually overall negative with a positive aspect (following Powell v Hemsley) and it does touch and concern the dominant land since restricting building on your neighbour’s land will protect the view from the dominant land thereby preserving its value, quality etc. It is incorrect to assert that the dominant and servient land are not sufficiently proximate since House 1 and House 2 are adjoining properties. There is also express wording here that shows that the original parties (the man and woman) did intend the burden of this covenant to run with House 2, so it is incorrect to state that the original parties did not intend the burden to run.
A landowner is the registered freeholder of a large detached house. The landowner decides to split the house into two semi-detached houses and sells one to a buyer.
The buyer covenants with the landowner “to repaint the window frames every five years using only colours approved by the landowner.”
Which of the following options best describes what type of covenant this is?
The covenant is outright positive.
The covenant is a mixed covenant. It cannot be split and is overall negative.
The covenant is a mixed covenant which can be split into two free-standing covenants; the first positive, the second negative.
The covenant is outright negative.
The covenant is a mixed covenant. It cannot be split and is overall positive.
The covenant is a mixed covenant. It cannot be split and is overall positive.
This is correct. Applying the ‘hand-in-pocket’ test (Haywood v Brunswick Permanent Benefit Building Society [1881] 8 QBD 403), the obligation to paint the windows requires money and time to be spent. The part of the covenant requiring the buyer to ‘only use colours approved by the landowner’ is restrictive and therefore negative - this part of the covenant can be complied with by inaction. The negative element cannot, however, stand alone and therefore Powell v Hemsley [1909] 1 Ch. 680 applies and the covenant is seen as one obligation with a condition attached. The main obligation is positive and the covenant is therefore seen as an overall positive covenant.
A man and woman are adjoining land owners. 5 years ago, the man entered into a covenant with the woman not to keep any animals on his freehold land.
The women has granted a ten year legal lease of her land to a tenant. The man has now brought ten dogs onto his land, and their barking is keeping the tenant awake at night. The tenant wants to enforce the covenant against the man.
Which of the following options is the best advice to the tenant as to whether it can enforce the covenant against the man at common law?
The tenant will be able to enforce the covenant against the man because express assignment has occurred
The tenant will be able to enforce the covenant against the man providing the covenant is deemed to touch and concern the land
The tenant will be able to enforce the covenant against the man because the burden will pass under the rule in Tulk v Moxhay
The tenant will not be able to enforce the covenant against the man as the burden of covenants cannot pass at common law
The tenant will not be able to enforce the covenant against the man as the tenant is not the freehold owner of the dominant land
The tenant will be able to enforce the covenant against the man providing the covenant is deemed to touch and concern the land
This is the correct answer. Provided that the covenant is deemed to touch and concern the land, this will satisfy the rules for an implied passing of the benefit at common law under P&A Swift Investments v Combined English Stores.
The other conditions of P&A Swift will be satisfied because if there is no express wording showing an intention for the parties to pass the benefit to successors, s78 Law of Property Act 1925 will imply this intention. Further, both the covenantee and their successor will also hold legal estates in land, as the woman owned the freehold and the tenant has a legal lease. Smith & Snipes Hall Farm v River Douglas Catchment Board confirms that different estates are acceptable.
Your client is the registered freeholder of two adjacent plots of land, Plot 1 and Plot 2. Five years ago, your client decided to keep Plot 1 but sold Plot 2 to a buyer. Both your client and the buyer signed the transfer deed which contained the following provision:
“the buyer covenants on behalf of itself and its successors in title not to use Plot 2 for any purpose other than as a private dwelling house.”
Last month your client sold Plot 1 to a new owner. Which of the following statements best explains how the benefit of the covenant has passed to the new owner in equity?
The benefit has passed by express annexation
The benefit has passed by express assignment
The benefit has passed by statutory annexation
The benefit has passed under a scheme of development
The benefit has passed by implied assignment
The benefit has passed by statutory annexation
This is the best answer. Section 78(1) Law of Property Act 1925 serves to annex the benefit of the covenant, as long as the parties have not expressly excluded s78, which there is no indication of on the facts.
The other answers are incorrect because there is no evidence that your client assigned the benefit of the covenant to the new owner; the wording of the covenant relates to the burden rather than the benefit so there was no express annexation and there is no evidence of a scheme of development. Further, implied assignment is not a means of passing the benefit in equity, it is a means of passing the benefit at common law.
A retired lawyer purchases the registered freehold of two adjoining semi-detached townhouses. The lawyer renovates the townhouses including creating a shared underground garage for parking. This makes the properties more convenient as the nearest parking is on the next street.
The lawyer decides to live in the larger townhouse and sells the smaller townhouse to an accountant. The transfer deed contained a right for the owner of the smaller townhouse to park a car in the shared garage and the following covenant:
“to contribute 50% of the costs of maintaining the shared garage ”
After several years the accountant sells the smaller townhouse to a friend. The friend uses the shared garage but refuses to contribute to its maintenance costs.
Which of the following best describes whether the lawyer can enforce the covenant against the friend?
The covenant cannot be enforced against the friend because there is no clear link between the benefit and burden
The covenant cannot be enforced against the friend because there is no element of choice as to whether to take the mutual benefit
The covenant cannot be enforced against the friend because the covenant is positive
The covenant can be enforced against the friend because the burden of the covenant will pass under the doctrine of mutual benefit and burden
The covenant can be enforced against the friend because the burden of the covenant will pass under the rule in Tulk v Moxhay
The covenant can be enforced against the friend because the burden of the covenant will pass under the doctrine of mutual benefit and burden
This is correct. The covenant is likely to pass to the friend under the rule in Halsall v Brizell [1957] as there is a mutual burden (to contribute towards the maintenance costs) and benefit (use of the garage). As per Rhone v Stephens [1994], there is a correlation between the benefit and burden and the benefit and burden as conferred in the same transaction (Davies v Jones [2009]). There is a genuine choice whether to accept the benefit of the right to park (Thamesmead Town Ltd v Allotey (1998)) as the friend could park on the next street instead. This exception to the general rule that the burden will not pass at common law (Austerberry) can therefore be applied on the facts and used by the lawyer to enforce the covenant against the friend.
The rule in Tulk v Moxhay cannot be used to pass the burden of the covenant in equity as the covenant is positive.
Question 1
The freehold owner of a farm (the seller) sells a field containing a barn forming part of the farm (‘the Property’) to a buyer. The transfer to the buyer contains the following:
The Buyer covenants with the Seller to repair and maintain the barn forming part of the Property.
Which of the following statements best describes the right created by the seller and the buyer?
A The positive covenant is a legal interest as it has been created by deed.
B The restrictive covenant is an equitable interest although it has been created by deed.
C The positive covenant is an equitable interest although it has been created by deed.
D The restrictive covenant is a legal interest as it has been created by deed.
E This creates an easement in favour of the buyer to access the barn forming part of the Property.
Answer
The correct option is C.
A covenant is not capable of being legal (s 1(3) LPA 1925). Creation by deed does not alter this. Options A and D are, therefore, wrong.
The covenant in question is positive as it will require effort or expenditure to perform it. Option B is, therefore, wrong.
Option E is wrong as a covenant has clearly been created, not an easement.
Question 2
A barrister is the freehold owner of two houses. He lives in one house (the ‘Retained Land’). He sells the other house (‘the Property’) to an architect. The transfer contains the following clause:
For the benefit and protection of the Retained Land the Buyer and his successors in title covenant with the Seller and his successors in title to only use the Property as a private dwelling house.
The architect sells the Property to a doctor. The barrister sells the Retained Land to a vet. The doctor sells the Property to a friend.
Which of the following answer best describes the parties to the various transactions?
A The barrister is the original covenantee and the vet owns the land burdened by the covenant.
B The barrister is the original covenantor and the friend owns the land burdened by the covenant.
C The architect is the original covenantee and the friend owns the land which benefits from the covenant.
D The architect is the original covenantor and the vet owns the land which benefits from the covenant.
E The architect is the original covenantor and the barrister owns the land which benefits from the covenant.
Answer
The correct option is D.
The architect is the original covenantor. Option C is, therefore, wrong.
The friend now owns the land burdened by the covenant – the Property.
The original covenantee was the barrister. Option B is, therefore, wrong.
The vet now owns the land that benefits from the covenant. Option A is, therefore, wrong.
Option E is wrong as, although the architect is the original covenantor, the barrister no longer owns the land benefitting from the covenant.
Question 3
A market research analyst is the freehold owner of two houses. The analyst sells one house (‘the Property’) to an occupational therapist. The transfer to the occupational therapist contained the following clause:
The Buyer and her successors in title covenant with the Seller and his successors in title to use the Property only as a private dwelling house.
Elsewhere in the transfer, the other house is identified as the seller’s ‘Retained Land’. The occupational therapist has sold the Property to a recruitment consultant. The market research analyst has sold his house to a teacher. The recruitment consultant has started running a business from the Property in breach of the covenant.
Which of the following answers best describes the basis upon which the teacher has the benefit of the covenant?
A There has been an express assignment of the benefit of the covenant to the teacher.
B There is statutory annexation as the land to be benefited is identified in the transfer.
C The benefit passes to the teacher at common law as the criteria are met.
D There is express annexation as words of annexation have been used.
E There is a mutual benefit and burden enabling the teacher to enforce the covenant.
Answer
The correct option is B.
There is nothing in the facts to suggest that there has been express assignment. Option A is wrong.
There is no express annexation as words of annexation have not been used and the land to benefit from the covenant is not identified in the clause creating the covenant. Option D is wrong.
Option C is accurate as the benefit will have passed to the teacher at common law. However, the covenant is restrictive and, therefore, the burden will only pass in equity. In order for the teacher to pursue a claim, the teacher must show that benefit of the covenant has passed to her in equity. Option C is, therefore, not the best answer.
There is nothing on the facts to suggest a mutual benefit and burden. This only applies to positive covenants and here the covenant is restrictive. Option E is, therefore, wrong.
For these reasons, the only way in which the benefit of the covenant can pass to the teacher is by way of statutory annexation.
A client goes to see his solicitor because his neighbour’s roof has recently fallen into disrepair and he wants to see if he can do anything about it.
He shows his solicitor a deed in which the neighbour gave a covenant for the benefit of the client’s house: “not to let the roof fall into disrepair.”
Which of the following best describes why the client is likely to be able to sue the neighbour under this covenant?
A. Because the building scheme exception will apply.
B. Because the doctrine of mutual benefit and burden will apply.
C. Because it is a positive covenant.
D. Because it is a restrictive covenant.
E. Because the neighbour was the original party to the deed.
E - Because the neighbour was the original party to the deed.
A farmer sells a field, which forms part of her farm, to a man. In the transfer the man agrees for himself and his successors in title to erect no more than four single-storey houses on the field.
What is the nature of the interest created in the transfer?
A. Legal because it is a restrictive covenant.
B. Equitable because it is a restrictive covenant.
C. Equitable because it is a positive covenant.
D. Legal because it is a positive covenant.
E. Equitable because it is an estate contract.
B - Equitable because it is a restrictive covenant.
A owned two adjoining freehold offices, Unit X and Unit Y, from which he ran his business. Needing less room, he sold Unit Y to B. In the transfer deed, B covenanted ‘for himself and his successors in title to Unit Y not to use Unit Y for retail purposes’.
A sold Unit X to C last week but the transfer did not mention the covenants. B is now using Unit Y as a car parts sales centre.
Which of the following statements correctly describes C’s position in relation to the benefit of the covenant?
C has the benefit of the covenant by statutory annexation
C has the benefit of the covenant by express assignment
C has the benefit of the covenant by express annexation
C does not have the benefit of the covenant as there is no annexation
C does not have the benefit of the covenant as there is no assignment
C has the benefit of the covenant by statutory annexation
This is correct. The wording of the covenant does not annex the benefit expressly; nor is there any evidence that the covenant has been expressly assigned when Unit X was transferred. In the absence of express annexation, Law of Property Act 1925, s 78 operates to annex the benefit of the covenant to the dominant land at the time the covenant was created. So when the Unit X was transferred to C, C gained the benefit of the covenant and can enforce it.
A sold part of his field to B. In the transfer deed, B covenanted to build and maintain a fence along the boundary with A’s land. B built the fence. B sold his land to C last year. In the transfer deed, C entered into an indemnity covenant with B. The fence was damaged in a storm six months ago and C has not replaced it.
Which of the following statements correctly describes C’s position in relation to the covenant?
The burden of the covenant has passed to C under the rule in Halsall v Brizell and C can be sued for breach
The burden of the covenant has passed to C as it has been expressly annexed to the servient land, and C can be sued for breach
The burden of the covenant has not passed to C although C could be liable in damages to B
The burden of the covenant has not passed to C as the covenant is purely personal to B
The burden of the covenant has passed to C under Tulk v Moxhay and C can be sued for brea
The burden of the covenant has not passed to C although C could be liable in damages to B
This is correct. This is a positive covenant, so generally the burden does not pass to successors: Austerberry v Oldham Corporation. The exception in Halsall v Brizell does not apply here as there is no mutual benefit and burden in relation to this covenant. Therefore B remains liable in damages and can recover them from C as C entered into an indemnity covenant in this respect.
Last year, B granted to A a legal mortgage over B’s business premise to secure a capital and interest repayment loan. The mortgage deed did not mention any power of sale for A. B’s business is declining and B has not made any mortgage payments for four months. Today, B received a letter from A stating that A intends to sell the property and recover the money due from the sale proceeds.
Which of the following statements is correct?
The Lender may sell the property as the legal date for redemption has passed
A cannot sell B’s property as the mortgage deed contained no express right for A to do so
A may sell the property as LPA 1925, s 101 gives A the right to sell as soon as mortgage money is due.
A may sell B’s property as the power has arisen under LPA 1925, s 101, and is exercisable as some interest has been in arrears for at least two months
The Lender cannot sell the property as three months must pass after the letter warning of the sale has been received
A may sell B’s property as the power has arisen under LPA 1925, s 101, and is exercisable as some interest has been in arrears for at least two months
This is correct: if there is no express provision in a mortgage deed (as here) then the statutory provisions in LPA 1925 apply. The right has arisen as one instalment of capital became due as soon as one payment had been missed: Payne v Cardiff; and the right is exercisable as some interest has been in arrears for two months: LPA 1925, s 103(ii).
Which one of the following is an accurate statement of the Lender’s duty when exercising its power of sale?
To wait for the property market to improve if the market is currently slow
To obtain the best possible price for the property
To obtain a proper price for the property
To improve the property
To instruct estate agents to handle the sale
To obtain a proper price for the property
