L8: Freehold Covenants

Question 1

What are freehold covenants?

Answer 1

Promises made between freehold owners of land
Rights affecting the enjoyment of adjoining land
Are contracts

Question 2

Examples of freehold covenants

Answer 2

Promise to plant trees, paint house, maintain road, not to erect structures higher than 2 storeys.

Question 3

Person making the promise

Answer 3

Covenantor (subject to the burden of the promise)

Question 4

Person to whom the promise is made

Answer 4

Covenantee (enjoys the benefit of the promise)

Question 5

Formalities for freehold covenants

Answer 5

Must be made by deed s1 LPMPA
Contract law -> automatic enforceability between original parties under privity of contract

Question 6

How to determine enforceability of a covenant

Answer 6

Has the benefit of the covenant run to the claimant?
Has the burden of the covenant run to the defendant?

Question 7

Who is an original party?

Answer 7

Those expressly named in the deed that created the covenant
S56- any person considered a party so long as the covenant contains a general description of covenantees and subscribes to the given definition
White v Bijou Mansions- particular, defined and identifiable individuals where there is evidence they were intended to benefit from a covenant

Question 8

What rule did Amsprop v Harris establish?

Answer 8

True aim of s56 = does not allow third parties to sue purely for their benefit- contract must purport to be made with them

Question 9

How else can a covenant be enforced?

Answer 9

Contracts (Right of Third Parties Act) 1999
A third party may enforce a term if the contract provides expressly that he is able to do so or if the contract purports to confer a benefit on him
Must be expressly identified in the contract by name, as a member of a class or answering a particular description

Question 10

What remedies are available for breach?

Answer 10

An injunction to prevent the breach
An order for specific performance (only available for positive covenants)
Award of damages
Wrotham park v Parkside homes
Covenant not to develop land without prior approval breached
Court refused to grant an injunction (Would require demolition of houses)
Damage was awarded to the value of 5% of the profits

Question 11

Passing of the benefit at law

Answer 11

5 conditions
Covenant touches and concerns the land of OG covenantee (swift investments v combined english stores)
At the time the covenant was granted, the covenantee held a legal estate in the benefited land
Claimant holds a legal estate in the land
Land to be benefited must be identified
Benefit of covenant was intended to run with the land S78 LPA 1925

Question 12

Covenant touches and concerns the land

Answer 12

Related to the mode, quality and not purely personal to the parties

Question 13

Claimant must hold a legal estate in the land

Answer 13

Need not be the same legal estate as the OG covenantee
OG covenantee can hold freehold, Claimant can hold a legal lease

Question 14

The land to be benefited must be identified

Answer 14

Can be done with aid of extrinsic evidence

Question 15

Benefit of covenant was intended to run with the land

Answer 15

Benefit must be shown to be annexed to the land (is fixed for all time)

Question 16

express annexation

Answer 16

Express
Plain in the deed that it is intended to benefit successors
Rogers
Benefit of c restricting building more than one house on a plot of land was found to be expressly annexed
Term stated the C was to endure to the benefit of the mortgagees, their heirs and assigns
Re Ballard’s Conveyance
Benefit of covenant restricting building works extending to 1.700 acres so large it was impossible to prove the entire estate was to benefit
Annexation ineffective

Question 17

Implied annexation

Answer 17

Implied from the surrounding circumstances
Marten
Benefit of C providing that land would only be used for agriculture and expressed to be made with covenantee and its successors in title = impliedly annexed to the whole estate

Question 18

statutory annexation

Answer 18

Automatic annexation of covenants granted on or after 1 Jan 1926
Federated homes v Mill lodge properties
ML covenanted with site owner that no more than 300 homes would be built on purchased land
FH purchased rest of development land brought legal proceedings for an injunction to prevent anticipatory breach
Held: s78 = benefit of C was statutorily annexed to the land

Question 19

qualifications to s78

Answer 19

Covenant must have been granted on or after 1 Jan 1926 (sainsbury v Enfield LBC)
Covenant must touch and concern covenantee’s land Federated homes
Must be no contrary intention excluding operation of provision Crest
Land benefited must be identified or capable of identification Crest

Question 20

roake v chadha

Answer 20

Roake v Chadha
Land laid out in separate plot, sold to various purchasers in standard term conveyances
Covenants were created where no more than one dwelling house was to be built
Clause that the covenant should not run with the land except for express assignment of benefit
D (chadhas) purchased one plot and wanted to build 2 houses
C (Roakes) issued legal proceedings to prevent anticipated breach
S78 has to be taken into account with the terms of the covenant in each case
Clause = intention not to pass benefit

Question 21

What is the rule for the passing of a burden at law?

Answer 21

A burden of any covenant cannot run with the land Austerberry
Impossible for claimant to enforce a covenant directly against a successor of the OG covenantor

Question 22

Austerberry v Oldham

Answer 22

Landowner conveyed by deed a parcel of his land to trustees who covenanted to make use of the land as a road, maintain and keep the land in repair
Same landowner sold adjoining land to austerberry; trustees sold road to oldham
Did the benefit pass to A, the burden to O?
The benefit did not pass- did not touch / concern the land
Burden had also not passed - cannot be passed to successors

Question 23

What are the 5 indirect methods by which a positive covenant may be enforceable, working around the rule that a burden cannot be passed?

Answer 23

Doctrine of benefit and burden
Chain of indemnity covenants
Long lease s 153 LPA
Estate rentcharges and rights of re entry

Question 24

Doctrine of benefit and burden

Answer 24

Where a C confers benefits, a successor will not be permitted to take advantages without also being subject to the burdens

Question 25

Halsall v Brizell

Answer 25

Several purchases on building estate granted the right to use roads, promenade, sea wall and drainage system of the estate subject to covenanting to contribution to the cost of repairs and maintenance
B (successor to OG purchaser) objected to contributions
Held: although a burden cannot be passed, successors are not entitled to enjoy the benefit of rights

Question 26

Thamesmead Town v Allotey

Answer 26

Successors had a choice whether to take the benefit, or having taken it- renounce it & escape the burden

Question 27

5 requirements for the doctrine of benefit & burden

Answer 27

Transaction that confers a benefit and imposes a burden
Benefit conferred is real and substantial
No other right to benefit exists
Benefit was taken voluntarily, opportunity to reject it and avoid associated burden
Link between benefit and burden so they are conditional, reciprocal or relevant

Question 28

A chain of indemnity covenants

Answer 28

Guarantees contractual liability passes from OG covenantor to successor and so forth
No claim for an injunction
Can be easily broken (successor dies, vanishes, insolvent)

Question 29

Long lease s 153

Answer 29

Creation of a long lease containing positive leasehold covenants and having the lease enlarged into a freehold estate binding successors

Question 30

Estate recharge and rights of reentry

Answer 30

A legal interest obliging an owner to make a periodic payment
May be enforced by exercising a right of re entry annexed to the rent charge

Question 31

What does equity allow?

Answer 31

For the burden of certain covenants to pass on the transfer of land to successors of OG covenantor
Does not permit passing of positive covenant

Question 32

Tulk v Moxhay

Answer 32

T sold a plot of land in leicester square to Elms who by means of C within the conveyance, promised to keep the garden square ‘uncovered with any buildings, in neat and ornamental order’ to preserve land
Sold to various successors, culminating with moxhay
M was aware of the covenant at the time of conveyance
M refused to comply with its terms- intended to build on the land
T brought proceedings seeking an injunction to prevent anticipated breach
M was bound to comply

Question 33

What are the 5 Tulk and Moxhay conditions for the burden of a restrictive covenant to run with the land?

Answer 33

1. Covenant must be restrictive in character
2. Covenant must touch and concern the land
3. There must be land capable of benefit from the covenant
4. Burden of the covenant must have been intended to run with the land
5. Covenant must comply with relevant registration of notice requirements

Question 34

Covenant must be restrictive in character

Answer 34

Restrictive = promise not to do something on land

Question 35

C must touch and concern land

Answer 35

Swift investments v Combined English Stores

Question 36

There must be land capable of benefiting from the covenant

Answer 36

C must have been granted to benefit some land London & SW Railway v Gomm
At the time C was granted, covenantee must have been the owner of land or had an interest London CC v Allen
Dominant tenement must be capable of identification

Question 37

Burden of C must be intended to run with land

Answer 37

Must be evidence that successors intended to bear the burden
Express words in the deed of the covenant
S79 LPA- covenant shall unless a contrary intention is expressed, be deemed to have made by the covenantor on behalf of himself, his successors in title and the persons deriving title under him
Presumption that burdens will run

Question 38

registration requirements for burdens

Answer 38

• Burden is only enforceable if a NOTICE has been entered s29 LRA 2002
• No notice = lost priority to registered disposition

Question 39

S28 LRA exceptions to registering a burden as a notice

Answer 39

• Where successor in title is not a purchaser of the covenantor’s land for valuable consideration (Adverse possessor or gift recipient)
  -Where the successor in title is a purchaser of an equitable estate only

Question 40

restrictive covenants made on unreg land prefore 1926

Answer 40

Doctrine of notice

Question 41

restrictive covenants made on unreg land after 1926

Answer 41

Class D (ii) Land charge against name of original covenantor
If not registered = void and unenforceable against a purchaser for money
Enforceable if:
Against a non-purchaser
Where requirement for money is not satisfied
Against a purchaser of an equitable estate

Question 42

Conditions for passing a benefit in equity

Answer 42

Covenant touches and concerns the land
Claimant has legal or equitable estate in the land of OG covenantee
Benefit intended to run (express/implied annexation, stat annexation s78 LPA, express/implied assignment, under scheme of development)

Question 43

C has a legal or equitable estate in the land of OG covenantee

Answer 43

C need not have the same estate as OG covenantee
Any occupier including adverse possessor can enforce benefit under s 78 (owners and occupiers for the time being)

Question 44

Benefit was intended to run with land

Answer 44

Express or implied annexation
Same as at law
Stat annexation s78
Express or implied assignment
C must show on the transfer of OG coventee’s land, the transfer doc contained effective assignment
Land conveyed capable of benefiting
Land benefiting must be ascertainable or certain
Assignment takes place at the same time as the transfer of land so it forms part of the transaction

Question 45

What does a scheme of development allow?

Answer 45

All current owners within that scheme are entitled to enforce covenants between themselves irrespective of when they were granted/when they were acquired

Question 46

Conditions for a scheme of development

Answer 46

Requirements in Elliston v Reacher
Requirements in Birdlip v Hunter

Question 47

Birdlip v Hunter

Answer 47

Applies to a defined area
Owners of properties have purchased their properties from a common owner
Each property is burdened by c, intended to be mutually enforceable
Limits of defined area are known to purchasers
Common owner is bound by scheme, crystallises on the occasion of the first sale
Effects bind future purchasers, potentially forever

Question 48

How can covenants be discharged ?

Answer 48

s84(1) Lpa
Discharge can be made by application by any person interested
Where restriction becomes obsolete due to changes in character of the property or neighbourhood
Impediment of reasonable user- continued restriction would impede some reasonable user (no longer has a practical benefit and is contrary to the common interest- s81 1a and 1b)
Discharge from those entitled to benefit
Those benefiting can discharge a restrictive covenant where this will not injure the persons entitled