A covenant in land law is a promise created by deed1 between two parties, one providing the promise not to engage in an activity (negative) or to do a positive action on their own land for the benefit of the other parties neighbouring land e.g. preservation of non-business character in residential areas.
Covenants between freeholders contain two aspects; a benefit to the person receiving the obligation and a corresponding burden to the provider. The rules relating to transmission of the benefit of the covenant are independent from the transmission of a burden. It is possible for the benefit to run to 'successors in title' of the original covenantee but for the burden to have been destroyed or to bind original covenantor only (see later), and vice versa.
The benefit of a covenant will pass provided that the covenant 'touches and concerns'2 the land of the original covenantee at the time it was made. This means property law is concerned with the transmission of proprietary rights, not personal advantages. This ensures the title is not cluttered up by obligations that are merely temporary, ambiguous and personal in nature, the conveyance of land is unfettered.
Diagram to illustrate parties involved.
A = COVANANTEE - Alan has benefit of covenant (Freehold owner) (receives the promise)
B = COVENANTOR - Justin has burden of covenant and the person whom gives the benefit. (Freehold owner)
C = SUCCESSOR IN TITLE TO ORGINAL COVENANTEE = Colin buys from Alan in 1995.
D = SUCESSOR IN TITLE TO ORGINAL COVENANTOR= Kenneth buys from Justin takes assignment.
Dominant tenement = Brantville Estate
Servient tenement = Plot X
Kenneth is in breach of covenants 1, 2 and 3.
No contractual relationship exists between Colin and Kenneth. Privity of contract exists between Alan and Justin (the original parties), allowing Alan to sue Justin in contract if the covenants are breached.
There are different rules relating to positive and negative covenants, when deciding which category a covenant falls within we look at the effect of the covenant and not the wording:
) Half annual maintenance cost of 'private' road = Positive covenant (oblige you to do an action, pay money)
2) No nuisance to Brantville estate by hanging out washing = Negative covenant
3) Plot X restricted use for residential purpose only = Negative covenant (no business)
There are sets of rules governing the enforceability of the covenants at common law and equity. The obligations made in 1988 would not be enforceable in contract between Colin and Kenneth as neither were original parties to the covenant. In order for covenants to be directly enforceable against Kenneth, Colin would have to look at the positions relating to common law and equity principles:
'It is necessary to remember that before a claimant can sue a defendant on a particular covenant, the benefit must have passed to the claimant and the burden must have passed to the defendant'
BENEFIT of the covenant has become attached (run with) to the land in relation to Colin.
BURDEN has also become attached to the land so that Kenneth is subject to the covenants.
For Colin to sue at law four conditions must be established for the benefit of the covenant to attach to the dominant land.3
. At the time of the covenants creation, does the original covenantee (Alan) own a legal estate in the dominant land? This condition is satisfied as Alan was the 'fee simple' owner (Freehold estate)
2. The successor in title ...
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BENEFIT of the covenant has become attached (run with) to the land in relation to Colin.
BURDEN has also become attached to the land so that Kenneth is subject to the covenants.
For Colin to sue at law four conditions must be established for the benefit of the covenant to attach to the dominant land.3
. At the time of the covenants creation, does the original covenantee (Alan) own a legal estate in the dominant land? This condition is satisfied as Alan was the 'fee simple' owner (Freehold estate)
2. The successor in title to the original covenantee must also have a legal estate in the dominant land. (Brantville estate)- This again is satisfied as Colin bought Brantville mansion and remainder of 16 acres and is freehold owner.
3. The covenants must benefit the dominant land with effect to use, value and occupy. i.e. 'touch and concern'4 and not be personal in nature.
Covenant 1, annual maintenance of a private road would be a benefit in terms of use allowing easy access to highway and without access to property, his use would be hampered, value of the property would thus be affected.
Covenant 2, maintains its value if the property can be used without nuisance. However this would be seen as personal, and would not see washing hanging out to dry affect the use and mode of occupation and benefit all future owners. Express wording shows "not to cause nuisance to the Brantville estate" defining and mentioning the land.
Covenant 3 = using solely for residential use, land would increase in value and preserve property values as a desirable location to move to. Would anyone want to leave next to a business?
4. At the time covenant was created there must have been intention that the benefit should run (transfer) with the dominant land. By looking at the express wording of the covenants. "With Alan his successors in title and assigns" shows this intention. This is satisfied as Colin would be a successor in title and this is expressed to pass to future owners. However it would be implied by statute since 1st January, 1926 in s78 Law Of Property Act5 which states:
"A covenant...shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed".
Unless no expressed exclusion clause in the deed of covenants is found when the property was conveyed. (We would need to examine the deed - see footnote).
As well as satisfying the above benefit conditions we must also show that Kenneth has the burden of the covenant. At common law In Rhone's and Stephens, case affirmed,6 that positive or negative burdens never run with the land to future successors in title.7 Thus Colin cannot sue Kenneth directly for breach although we can satisfy the benefit passing at law, we cannot demonstrate that Kenneth's land is burdened with them. Colin can enforce the covenant against any person who is subject to the burden of the covenant at law, usually the original covenantor. Colin could only sue the original party Justin (coventantor) to seek damages (see discussion later), for breach of obligations given by him as they remain for all time
The rules of EQUITY may help here, the first three conditions for benefit to run must be met the same as they are in LAW (discussed above shows they would appear to be satisfied or implied by statute). The fourth condition differs instead of intention we must look at how transmission occurs i.e. how the covenant is attached to the land and would run with all future owners by ways prescribed by equity8 these methods being annexation, assignment and scheme of development:
Annexation of benefit(attached to land)-there exists 3 types
* Express - by reference to the wording which relates to the dominant land and not to a particular individual. As the 16 acres can be reasonably benefited in comparison to the adjoining plot x having 4 acres no question of large estates9. The dominant land can clearly identified (via drawing plans) or in document creating the covenant10 (Covenant 1 and 2 make reference to the Brantville estate)
* Statutory - providing no exclusion found (would need to see deed) then s78 (1) LPA 1925 automatically annex the covenant to 'each and every part' of the land so long as it was capable of benefiting the land in question. Sixteen acres of land was retained in the vicinity at time covenant made.11 The case of Whitgift Homes and Stocks in 2001 using provision s78 LPA 1925 to clearly identify land on covenant was rejected.12
* Implied - rarely required due to above two methods.
Assignment of benefit in equity
Express assignment gives benefit to the person and not too land. Must take place at the same time as transfer of the dominant land otherwise will be invalid.13
There must 5 conditions met for the Burden to run with land (servient) in equity14
. Covenant must be negative.15
As covenant 1 is positive requiring expenditure16, cannot enforce in equity. Covenant 2 and 3 will run with the land, as they are restrictive (negative).
2. There must be a dominant tenement.
In this case the 16 acres belonging to Alan has benefit and Justin's plot x would be the servient land with a burden.17
3. Covenant must benefit the land in use, value and occupation. (Discussed above and satisfied)
4. Burden must be intended to run with servient tenement with future owners - as there is express wording evident. The line "Justin covenanted with Alan his successors in title and assigns" Demonstrates this was not a personal covenant between them and express reference to future owners. We can also however rely on s79 of 1925 LPA to imply the wording, (providing not excluded via statement and no implied exclusion)
5. All equitable interests in land require registration if created after 1925 to be enforceable.18 In unregistered land they registered via a class D (ii) charge19
In the case of a registered title they constitute a minor interest, protection achieved by entry of a notice see Land Registration Act 1925 50 (1) before Justin sold to Kenneth in 1993. Otherwise the covenant would be void if was not registered.
ALTERNATIVE techniques to enforce positive covenants at law and equity
chain of indemnity covenants
Although if Justin had purchased an indemnity cover prior to conveyance with Kenneth, the liability would pass on for covenant 2, this is a purely contractual obligation. The original covenantor ran recover damages from his successor, if he is sued
Then Colin would have the ability to sue Justin (he subject to them for all time). Justin sold plot X "subject to the covenants entered into him by Alan" shows the possibility of an indemnity covenant being present. If this the case then Kenneth would be advised to comply as Colin could sue under contract law.
An alternative would be to sue indirectly using the doctrine in Halsall v Brizell 20 in respect of covenant 1 where mutuality of benefit and burden, you have an obligation granted by a deed of conveyance the rights are passed on via deed. This was later modified in the case of Rhone's and Stevens which applies, if there exists a choice21 to exercise the right, in this case a right of way being the path. In Thamesmead22 this free choice was shown, but in this case Kenneth there appears to be no choice but to use the pathway as their appears to be no other access the to the public highway. If it is used at least on one occasion, then must pay towards maintenance. This doctrine can apply in respect of covenant 1 only.
Covenant 1 is positive in nature and will not pass at law or equity for Colin to enforce. There is possibility to insist on payment due to use of the road, if Kenneth is using the private access road.
Covenant 2 is negative in nature but has a personal element and thus would not pass at law and equity.
Covenant 3 is negative. The claimant if successful in law and showing that loss has occurred will be awarded nominal damages. If pursuing enforcement of covenants in equity, only equitable remedies are available which are discretionary i.e. Injunction.
Kenneth has the option to apply to the land tribunal using s 84 of LPA, which has powers to discharge or modify the covenants, which are restrictive and impeding in nature and ultimately effect reasonable use of private land e.g. being able to dry washing. "Any delay in issuing proceedings may result in damages in lieu being awarded instead of an injunction, where there is a substantial delay a loss of right to relief through acquiescence would occur.23 "If the claimant is suing in equity, he must establish that the burden has passed to the defendant in equity....if the claimant is suing at law, he must establish that the defendant is subject to the burden at law."24
BIBLIOGRAPHY
R.J, Smith, Property Law 4th edition, 2003 , Pearson Education Ltd, Harrow, London
2 R.J, Smith, Cases and Materials 2nd edition, 2003, Pearson education Ltd, Harrow, London
3 M. Dixon, Principles of Land Law 4th edition, 2002, Cavendish Publishing,
4 M. Draper - 'Restrictive covenants'- Solicitors Journal 3rd July 1998 pg 618-pg619
5 M. Draper - 'Restrictive covenants and damages'- Solicitors Journal 20th October 2000 pg 954-955
6 S.H, Goo, Sourcebook on Land Law 3rd edition, 2002, Cavendish Publishing
7 M. Thomas Statutes on Property Law, edition, Blackstone Press Ltd, London
8 M.P, Thompson, Modern Land Law, 2nd edition, 2003, Oxford University Press
9 D.Rook, Property Law & Human Rights, 2001, Blackstone Press Ltd, London.
0 Halsbury's laws of England - various sources. and Legislation direct database online
1 Judith-Anne MacKenzie & Mary Phillips, Text Book on Land Law, 9th Edition, 2002, Oxford University Press
Electronic resources - Lexis Nexis
www.westlaw.co.uk
www.sweetandmaxwell.co.uk
www.hmso.gov.uk
www.butterworths.co.uk
S1 LPA 1925
2 Rogers v Hosegood (1900) 2 Ch. 388
3 P & A Swift Investments v Combined English Stores [1989] AC 632
4 Farwell J in Rogers v Hosegood (1900) 2 Ch. 388
5 s 78 LPA 1925. cf benefit transfer of covenants granted after 11.5.2000 s.1(3) Contracts (rights of third parties) Act 1999 unless express exclusion
6 Rhone v Stephens [1994] 2 AC 310
7 earlier case Austberry v Corporation of Oldham [1885] 29 Ch.
8 The Law Commission report 127para 326 'Transfer of Land - Law of Positive and Restrictive Covenants.
9 Re: Ballard's Conveyance [1937] Ch. 473 benefit did not run, as unrealistic to effect whole
0 Marquees of Zetland v Driver [1939] Ch 1
1 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594
2 Whitgift Homes v Stocks [2001] EWCA Civ 1732
3 Miles v Easter [1933] Ch .611
4 Tulk v Moxhay [1984] 2 Ph 774
5 Haywood v Brunswick permanent Benefit Building Society [1881] 8 QBD 403
6 Rhone v Stephens [1994] 2 AC 310
7 London County Council v Allen [1914] 3 KB 642
8 now s29 LRA2002
9 Land Charges Act 1972 s 2(5) (ii).
20 Halsall v Brizell [1957] Ch 169 - payment towards private road
21 choice not clarified in Rhones v Stephens
22 Thamesmead Town v Allotey [1998] 37 EG 161
23 Gafford v Graham (1998) 77 P & CR 73, CA
24 M. Dixon; Principles of Land Law
Candidate number: 20108206