Land: Freehold Covenants

Question 1

How can covenant be enforced if both parties are successors?

Answer 1

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 (AGA)

Question 2

When is Negative Covenant Enforceable (benefit and burdon)?

Answer 2

1. Benefit passes under equity
   - touches and concerns land; and

• annexation (presumed to pass with land); OR
• expressly assigned; OR
• building scheme

2. Burdon Passes under Equity
   - benefits dominant land;
   - intended to pass (presumed); and
   - registered

Question 3

When does positive covenant bind?

Answer 3

1. Benefit has passed under common law
   - touches and concerns land
   - intend to run with land
   - when covenant was made OG covenantee held land; and
   - successor now holds legal title
2. Burden does not pass
   - bring claim against OG; OR
   - through chain of indemnity covenants

can enforce against OG covenantor (AGA)

Question 4

Methods by which benefit of restrictive covenant can run?

Answer 4

1. Annexation
   - presumed that it was intended to run with land
   - must be clear contrary intention to rebut
2. Express Assignment
   - between seller and buyer
   - in writing and signed by both parties
3. Building Scheme
   - seller selling multiple plots with covenant
   - covenants intended to benefit all plots and this must be known

Question 5

When will the benefit and burden rule apply?

Answer 5

Way to enforce positive covenant if successor in title wants to enjoy a benefit attached to burden

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 6

How can a covenant be discharged?

Answer 6

1. Merger
   - automatically discharged if same person owned both pieces of land
2. Express Agreement
   - release must be made by deed
3. Implied Agreement
   - if dominant owner does nothing when covenant is being openly breached
4. By statute (ONLY restrictive covenant)
   - 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