covenants Flashcards
(18 cards)
1
Q
what are covenants
A
- In the course of transferring ownership of land, it is common for parties to enter into promises with each other in relation to the land and these promises are known as covenants.
- Most commonly – freehold covenants are used by vendor selling part of his land and as there will be a physical connection between the two pieces of land, the vendor will have an interest in how the land is being used in the future.
- ‘A covenant is a promise under seal, i.e. contained in a deed and like in all contractual obligations is enforceable between the parties according to the normal rules of contract law’ – Wylie, Irish land law
- Covenantor – promisor (undertakes the burden); Covenantee – promise (enjoys the benefit of covenant)
- There are some situations in which the covenant can be enforced between successors in title
- When considering if the burden and/or the benefit of a covenant is binding on the parties at issue:
1) See if the parties are in privity of contract
2) If not, consider if they are in a leasehold relationship;
3) If not, consider if the benefit/burden ‘ran with the land’ in order to bind the successors
2
Q
Privity of contract (deed under seal)
A
- Any covenants in these documents are enforced under the law of contract. A covenant entered into between the original parties remains enforceable between them and their personal representatives, as it would if bore no relation to the land
- Section 49(6) of the Land and Conveyancing Act specifically provides that the alterations to the rules on the enforceability of freehold covenants does not affect the enforceability of a covenant under the doctrine of privity of contract.
3
Q
Leasehold relationship
A
- If there is a leasehold relationship in existence there is privity estate where there is a relationship of landlord and tenant
4
Q
Where there is neither privity of contract nor privity of estate
A
- Historically, whether a covenant could bind a freehold owner depended on both common law and equitable principles. At common law, a distinction was made between covenants benefiting land (which could run with it) and burdens (which typically could not).
- Although the Land and Conveyancing Law Reform Act 2009 significantly reformed this area, understanding the earlier rules is key to appreciating the current law.
5
Q
Common law
A
- Freehold covenants are enforceable between the original parties, but enforcement by or against successors-in-title is more complex due to the lack of privity of contract. A covenant “runs with the land” when it benefits the land itself, not just the original parties.
- At common law, such covenants remain binding on the original parties even after they transfer their interest.
6
Q
The running of the benefit ay common law
A
- Originally the common law did not allow the successors in title to benefit from the covenant – due to rules of privity
- Later – it would pass with the land where these conditions are met:
1. Covenants were required to touch and concern the land of the covenantee
Gaw v CIE – covenant to upkeep a path across railway tracks (positive covenant). The benefit of the covenant passed to the plaintiff’s successor along with the right of way
2. The successor of the covenantee had to show he had a legal estate in land benefitted by the covenant
3. The successor in title of the covenantee had to have the same legal estate in the land as the original covenantee. - Operated until s 58(1) of the Conveyancing Act 1881 – presumed that covenants were made with the covenantee’s “heirs and assigns,” implying intent to bind successors—but other conditions still needed to be met.
- In England, s. 58 was replaced by s. 78 of the Law of Property Act 1925, which effectively annexes the covenant to the land without needing to prove intent.
- However, in Roake v Chadha, this presumption could be rebutted by express wording.
- Section 58 has now been repealed in Ireland by the LCLRA 2009, and replaced by sections 48 and 49, which allow enforcement by the “dominant owner” of the land.
7
Q
The running of the burden at common law
A
- At common law, the burden of a covenant does not run with the land – it binds only the original covenantor. Even if the land is sold, the original party remains liable, but the purchaser is not. This is because only those in privity of contract can be bound by contractual obligations.
- However, certain methods were developed to circumvent this rule and indirectly enforce the burden.
8
Q
a. The principle of benefit and burden (or reciprocity) – the rule in Halsall v Brizell
A
- The principle of mutual benefit and burden holds that a person who enjoys the benefit of a covenant must also accept its burden.
- Halsall v Brizell – the court held that a purchaser who wished to use a private road (the benefit) was also obliged to contribute to its upkeep (the burden), even though the burden of the covenant wouldn’t normally pass at common law.
9
Q
b. The chain of indemnity covenants
A
- As the original covenantor stays liable after selling the land, they usually require the buyer to covenant to indemnify them. Each new owner does the same, creating a chain of indemnities that makes the original covenant effectively enforceable against the land.
10
Q
Equity
A
- Equity contributed two key developments to covenant law:
1. The injunction as a remedy to prevent covenant breaches, and
2. Special rules for restrictive (negative) covenants. - While the benefit of such covenants runs similarly to common law, equity allows the burden to run, unlike at common law.
11
Q
Equity – the running of the benefit - conditions
A
- To enforce a restrictive covenant in equity, the following must be satisfied:
1. The covenant must benefit land, not just the covenantee personally.
2. It must “touch and concern” the dominant land.
3. The enforcer must own the dominant land – London County Council v Allen.
4. The benefit must have passed by assignment, annexation, or under a local scheme.
12
Q
Assignment
A
i. Express assignment
- Assignment occurs when the benefit of a covenant is transferred with the land as a connected right. Equity requires the assignment to happen at the same time as the transfer of the land, since the covenant is seen as benefiting the land itself. If this link is broken, equity will not enforce it.
ii. Implied assignment
- Implied from words used to show a clear intention to assign the covenant.
13
Q
Annexation
A
- Annexation means the covenant is permanently attached to the land, so it passes automatically to each new owner. A successor-in-title cannot avoid it by claiming lack of notice.
- Express annexation – will only occur where the wording of the deed/document in which the covenant is contained shows an intention to annex the covenant to the land.
- Implied annexation – in Marten v Flight Refuelling Ltd, the court held that the benefit of a covenant could be impliedly annexed to the land if ignoring it would lead to injustice or defy common sense. This allows for annexation based on the surrounding circumstances, even if there isn’t explicit evidence of it.
14
Q
Local schemes
A
- Reciprocal or mutual covenants are common in housing developments where adjoining landowners agree to restrict the use of their lands in specific ways. These covenants often form a “local scheme” in which both the benefit and burden of the covenants run with each plot of land. This creates a type of local law governing the use of the properties within the scheme, ensuring consistency and fairness among the landowners.
- De Londras (1st edn, p. 279) explains that in a local scheme, when a property is sold, the purchaser understands that covenants apply to all lots in the development. Each new owner agrees to these covenants and gains the right to enforce them against others. This creates mutual obligations between all owners, binding them to the covenants as the properties change hands.
- Elliston v Reacher – the conditions for recognizing a local scheme were outlined as follows:
1. The parties must have acquired land from a common vendor.
2. The vendor must have divided the estate into defined plots, subject to common restrictions that align with a general development scheme.
3. The vendor must have intended the restrictions to benefit all plots in the scheme.
4. Original purchasers must have bought with the understanding that the restrictions could be enforced by all other plot owners.
5. The area covered by the scheme must be clearly defined (Reid v Bickerstaff). - Statutory recognition of a scheme of development is provided under Sections 48 and 49 of the Land and Conveyancing Law Reform Act 2009.
- Section 48 defines a scheme of development as a land development where:
a) The land is or is intended to be subdivided into two or more parts for conveyance in fee simple to each owner.
b) There is an intention between the developer and owners to create reciprocal covenants under Section 49(3).
c) This intention is expressed in or implied from the conveyances and the proximity of the relationship between the owners. - Section 49 – where a scheme of development applies, covenants are enforceable against the current owner of the land (or a previous owner for breaches during their ownership). These provisions apply to both the benefit and burden of freehold covenants.
15
Q
Equity – the running of the burden - The rule in Tulk v Moxhay
A
- The rule in Tulk v Moxhay allowed the burden of a restrictive covenant to be enforced by successors in title. The case involved a covenant to keep land in an open state, and the court held that the successor could not ignore it. Three conditions for the burden to run in equity were set:
1. The covenant must be restrictive.
2. It must preserve the land’s value.
3. It must benefit a third party. - Section 49 of the LCLRA 2009 has abolished the rule in Tulk v Moxhay.
16
Q
The impact of the 2009 Act
A
- Sections 48 and 49 of the Land and Conveyancing Law Reform Act 2009 significantly update the law on covenants. Freehold covenants are now generally enforceable against successors in title to the original covenantor and covenantee.
- Section 49 abolishes the common law and equitable rules, including Tulk v Moxhay, regarding the enforceability of freehold covenants. Instead, it provides that a covenant imposing obligations on servient land is enforceable by the dominant owner or someone who previously held that position, but only for breaches that occurred while they owned the land.
- The covenant is also enforceable against the servient owner for breaches occurring during their ownership, or for past breaches they did not remedy. Enforcement is still subject to the deed’s terms.
17
Q
Remedies for breach of restrictive covenants
A
- Injunction, or damages in lieu of injunction under the Chancery Amendment Act 1858 to award damages in lieu of an injunction - Wrotham Park Estate Co. Ltd. v Parkside Homes Ltd.
18
Q
Discharge and modification of restrictive covenants
A
- The owner of the dominant land may waive the benefit of a restrictive covenant, or they may be estopped from enforcing it due to their conduct, as seen in Chatsworth Estates Co. v Fewell.
- Previously, there was no clear mechanism to discharge or modify restrictive covenants without the consent of the dominant owner. For registered land, the Registrar can discharge a covenant with the consent of all those interested in its enforcement, as per Section 69(3) of the Registration of Title Act 1964. Conditions for discharge include:
1. The covenant does not run with the land.
2. The covenant cannot be enforced against the landowner.
3. Modifying or discharging the covenant would benefit those interested in enforcing it. - Under Section 50 of the Land and Conveyancing Law Reform Act 2009, a Servient owner can apply to the court for an order to discharge or modify a freehold covenant, even if the covenant was entered into before the Act came into force. This is particularly helpful when the covenant has become irrelevant due to changes in property use.
- A covenant can be discharged if the court finds that continuing to comply with it constitutes an “unreasonable interference” with the use and enjoyment of the Servient land.
- When making its decision, the court will consider factors set out in Section 50(2) of the LCLRA, which help assess what constitutes “reasonableness”:
1. Nature and creation of the covenant.
2. Benefit or protection it provides to the dominant landowner.
3. Whether the covenant still serves its original purpose.
4. Length of time the covenant has been in place and its enforcement.
5. Changes in the property or area that make the covenant unnecessary.
6. The impact on the servient landowner (hardship or expense).
7. Interests of affected third parties (e.g., tenants, mortgagees). - If discharging or modifying the covenant results in a “quantifiable loss” to the dominant owner or another party, the court can require the Servient owner to pay compensation.
