Covenants relating to freehold land

HideShow resource information

What is a covenant?

  • A promise contained in a deed - either positive or negative
  • Covenantor - the person who makes the promise and is subject to the burden of the covenant
  • Covenantee - the person whose favour the promise is made and who gets the benefit of the covenant
  • There are different rules for the enforceability of covenenants in a lease
  • A person who proposes to develop land must also comply with planning legislation
  • Creation is by deed
1 of 15

Effect

  • It is always enforceable as between the original parties
  • Identifying covenantees - s 56 LPA 1925
  • Right to sue - Contracts (Rights of Third Parties) Act 1999

Remedies available

  • Injunction
  • Specific performance
  • Damages
2 of 15

Successors - problems of enforceability

3 of 15

Successors - Passing of the benefit at common law

Smith and Snipes Hall Farm v River Douglas Catchment Board

Case involved an action for damages by the covenantee's assignee and his yearly tenant. They successfully enforced the covenant

  • The covenant must touch and concern the covenantee's land

Swift Investments v Combined English Stores Group Plc  Lord Oliver

  • The covenent benefits only the landowner for the time being, and if separated from the land, ceases to be of benefit to the covenantee
  • The covenant affects the nature, quality, mode of user or value of the land
  • The covenant is not expressed to be personal

The benefit of a covenant may pass where the 4 requirements are met. A covenant is deemed to touch and concern the dominant land where any holder of that land would benefit, not just the original covenantee personally.

4 of 15

Successors - Passing of the benefit at common law

  • The covenantee must have had a legal estate in that land
  • The assignee must also have a legal estate in the land

-  s 78 (1) LPA 1925

  • The benefit must have been intended to run with the land
  • The land to be benefited must be identified
  • Effect of subdivision of the covenantee's land - 
5 of 15

The passing of the burden at common law

  • The burden of a covenant cannot run with land at common law - Austerberry v Oldham Corporation
  • It is only possible to enforce the burden indirectly by one of the followin

(i) Chain of indemnity covenants

(ii) The doctrine of benefit and burden

  • Where an obligation is 'connected with' a right
  • If a landowner wishes to take the benefit conferred by the deed he had to comply with the burden imposed by the deed. This was claimed to be an extension of an ancient rule relating to deeds. (Halsall v Brizell)
6 of 15

Requirements - Benefit and burden

  • An arrangemment/transaction which both confers a benefit and imposes a burden

A deed - Halsall v Brizell

An informal agreement - ER Ives Investments Ltd v High

  • A benefit which is real and substantial - Rhone v Stephens
  • No other right to the benefit
  • Benefit taken voluntarily; opportunity to reject it; ability to take it away
  • A link between the benefit and burden
  • Burden relevant to the exercise of the right - Rhone v Stephens
  • Question of knowledge not dealt with
  • No need for registration - Goodman v Elwood
7 of 15

Effects - Benefit and burden

  • A person who wants to take the benefit must comply with the burden

Thamesmead Town Ltd v Allotey

  • 2 requirements to enforce a positive covenant against a successor in title to the covenantor: 1 - the condition of discharging the burden had to be relevant to the exercise of the rights to obtain the benefit AND 2 - the successors in title have to have a choice whether to acqurie the rights at all.

Wilkinson v Kerdene

  • Landowner of a holiday village claimed fixed annual sum partially covered the cost of repair of facilities over which he had no rights. The sum could not be apportioned as it was not related to the costs of repairs.
  • The doctrine does not seem to release the original contracting party from their obligations
  • It would seem that the obligation is automatically enforceable by any successors in title to the land over which the benefit is exercisable since they have the power to prevent exercise of the right.
8 of 15

Passing of the burden in equity

Tulk v Moxhay

  • A covenant between vendor and purchaser, on the sale of land, that the purchaser and his assigns shal use or abstain from using the land in a particular way, will be enforced in equity against all subsequent purchasers with notice.

Requirements

  • Restrictive covenant - Haywood v Brunswick Permanent Benefit BS
  • For the benefit of the covenantee's land - London CC v Allen
  • Burden intended to run with the covenantor's land - s 79 LPA 1925

Morells of Oxford Ltd v Oxford Utd FC Ltd

  • A person sold part of his land as a public house and covenanted not to permit any competing business on his retained land, this covenant was personal in nature and did not bind successors in title.
  • Registration of the covenant, where appropriate
9 of 15

Passing of the benefit in equity

  • Not only must the covenant touch and concern the land of the covenantee,  but the claimant must show that he has acquired the benefit of the covenant in one of 3 ways prescribed by equity: annexation, assignment or a scheme of development. 
10 of 15

Annexation - Express

  • A permanent fixing of the benefit of the covenant to the land at the time the covenant was created

Requirements

  • Identification of the land

The land which is intended to be benefited must be so defined as to easily ascertainable - Marquess of Zetland v Driver

There is an automatic annexation, but there have also to be some reference in the covenant to the land intended to be benefited and the land had to be easily identified - Crest Nicholson Residential v McAllister

11 of 15

Annexation - Express 2

  • Clear that benefit to be part of the land

The covenant stated expressly that the covenant was for the benefit of the retained land - Rogers v Hosegood

It was not enoguh for the covenant made with the covenantee and his heirs, executors and administrators as this did not link these people with the benefited land. There was no reference to any land that they should be successors to - Renals v Cowlishaw

  • Problems with puported annexation to a very large area of land and with sub-division of the covenantee's land

Re Ballard's Conveyance

  • The covenant was worded so that it conferred a benefit on the whole of a large estate. In fact it could only confer a benefit on a small portion of the estate and so therefore the courts held that the covenant was invalid. It is best when drafting a covenant to make it clear that the covenant is for the benefit of the whole or any part of the named land. 
12 of 15

Annexation - Statutory

  • A covenant will be annexed automatically to each and every part of the benefited land under s78 LPA for covenants made after 1925 - Federated Homes v Mill Lodge Properties Ltd

Requirements

  • Covenant that touches and concerns the covenantee's land - Federated Homes
  • No contrary intention - Roake v Chadha
  • Identification of the land in the deed - Crest Nicholson v McAllister
  • Covenant created on or after 1st January 1926 - J. Sainsbury Plc v Enfield LBC
13 of 15

Assingnment

Requirements

  • Assignment with the covenantee's land or part
  • Covenant made with the intention of benefiting covenantee's lan
  • Land ascertainable

Newton Abbott Co-operative Society v Williamson & Treadgold ltd

14 of 15

Scheme of development

Elliston v Reacher - made the original requirements,

  • In recent years, the courts have taken a much more relaxed approach and have tended to merely insist on a clear definition of the scheme and on evidence that the original vendor and the original purchasers intended that all purchasers should be mutually bound by, and mutualy entitle to enforce, a defined set of restrictions. 

Relaxed requirements

  • An intention that a well-defined area of land be sold off in plots
  • A mutual intention that the purchasers will both be bound and benefit from common restrictions

There was not only a failure to lay out the land in plots, but there were also 2 separate vendors. However there was a clear intention of a mutually enforceable scheme - Re Dolphin's Conveyance

15 of 15

Comments

No comments have yet been made

Similar Law resources:

See all Law resources »See all Land resources »