Land Freehold Covenants

Question 1

What are covenants?

Answer 1

Restrictive Covenant
- requirement not to do something
- requires no steps

Positive Covenant
- requirement to do something
- requires steps to be taken

Question 2

When can successor convenatee enforce benefit against OG covenantor?

Answer 2

Must show that benefit has passed

Use common law
- express assignment
- implied assignment

Question 3

How can covenant be enforced if both parties are successors?

Answer 3

Negative Covenant
- if benefit has passed under equity; AND
- if burden has passed under equity

Positive Covenant
- if benefit has passed under common law
- can enforce against OG covenantor

Question 4

How can the benefit of a covenant be enforced under equity?

Answer 4

1. covenant must touch concerned land
   - only benefits dominant owner whilst they own land
   - must benefit the land itself
2. Must pass by one of below
   - annexation
   - express assignment
   - building scheme

Question 5

When does a benefit pass through annexation?

Answer 5

Either:
- express words of the covenant make it clear that the original parties intended the benefit to become part of the dominant land

But
- assumed unless transfer document states otherwise

Question 6

When does the benefit of land pass though express assignment?

Answer 6

• Benefit can be assigned when the dominant land is transferred
• must be in writing and signed by person transferring benefit

Does not attach to land so needs to be done for every transfer

Question 7

How can beneficial interest pass through building scheme?

Answer 7

Single owner sells individual plots of land with covenants
- covenants are treated as a set of by-laws enforceable by and against all owners

Requirements
- covenants intended to benefit all plots
- each buyer knows covenants are to benefit all plots

Question 8

When will the burden of a covenant pass under equity?

Answer 8

1. Must be restrictive
2. Must accommodate dominant tenement
   - direct beneficial impact on dominant land
   - must be sufficiently proximate (no need for border)
3. Covenantee held land at time the covenant was created
4. Burden was intended to run with land
   - express in wording of covenant
   - is assumed unless contrary intention is expressed
5. Notice (if purchaser for value)
   - Registered land: charges register
   - Unregistered: D(ii) Land Charge

Question 9

How can benefit of covenant be passed under common law?

Answer 9

Two Ways:

1. Express Assignment
   - passed to buyer of dominant land by seller
   - must be in writing and notice must be given to covenantor
2. Implied Assignment
   - must touch an concern land
   - intention that it runs with land (express or assumed subject to contrary intention)
   - OG Covenanter held legal estate at creation
   - successor holds legal title at date of enforcement

Question 10

What claim can a successor covenantee make against successor Covenanter for positive covenant?

Answer 10

Benefit must have passed to successor covenantee through common law

None
- can only make claim against OG Covenantor

EXCEPTION
- if successor Covenantor seeks to enjoy a benefit linked to the burden

Question 11

When will the benefit and burden rule apply?

Answer 11

Means that burden is enforceable on successor in common law if they want to enjoy a benefit associated with it:

Requirement
- benefit and burden must be conferred in same transaction
- benefit and burden must be correlated (expressly or impliedly conditional)
- successor Covenantor must have option to refuse/give up benefit

Question 12

How can an OG Covenanter protect from liability from the burden (ie liability for breach by successor)?

Answer 12

1. Get indemnity covenant from successor
   - will create chain will last successor who agreed being liable
2. Grant lease rather than selling
   - burden of leasehold covenants run with lease

Question 13

What remedies are available for breach of covenant?

Answer 13

Between OG parties or benefit and burden has passed through equity
- equitable remedies available (injection)

If burden has not passed (positive covenant with successor of servient land)
- only damages (as can only sue OG Covenanter who does not land)

Question 14

How can a covenant be discharged?

Answer 14

Merger
- automatically discharged if same person owned both pieces of land

Express Agreement
- release must be made by deed

Implied Agreement
- if dominant owner does nothing when covenant is being openly breached

By statute (ONLY restrictive covenant)

Question 15

How can covenant be discharged by statute?

Answer 15

ONLY restrictive covenant

Servient land owner can apply to court if:
- covenant impedes reasonable use of land;
- covenant covers no practical value or is contrary to public interest; and
- financial compensation would be adequate for dominant owner