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Flashcards in Freehold Covenants Deck (35)
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1

Covenant

A covenant is a promise made by one party (the “covenantor”) for the benefit of another party (the “covenantee”) which is (usually) contained in a deed (Mackenzie).

2

Dominant Land

“benefitted” land is the land which benefits from the covenant. It is owned by the covenantee.

3

Servient Land

“burdened” land bears the burden of carrying out the covenant. It is owned by the covenantor – the landowner who made the promise of the covenant to the original owner.

4

Tulk v Moxhay

Has the burden passed in equity?

  • The Covenant is NEGATIVE in Substance
  • The Covenants must Accommodate the Benefitted Tenement
  • The Original Parties intended the burden to pass
  • The person against whom the covenant is being enforced must have ‘notice’ of it under the rules:  actual knowledge is irrelevant  (Notice means registration)

5

Haywood v Brunswick Permanent Benefit Building Society

  • hand in pocket’ test – if you have to spend time/money/energy it is a positive covenant; if you don’t it’s negative

6

Shepherd Homes v Sandham (no 2) [1971]

  • Where a covenant is both positive and negative, they can be separated as long as both parts are capable of standing on their own.

7

Powell v Hemsley

a negative undertaking within a positive covenant may be held to be positive overall or vice versa

8

Rhone v Stephens

Equity will never enforce positive covenants

9

London City Council v Allen

original covenantee had an estate in the benefitted tenements at the time the covenant was created and the successor has an estate in the benefitted tenement at the time of enforcement.

10

P&A Swift Investments v Combined English Stores

Touch and concern land

"touch and concern” explained by Lord Oliver means “affecting the quality, mode of use, or value of the covenantee’s land” 

Cannot be personal i.e. it must only benefit the landowner for as long as they own the benefitted land.

11

Bailey v Stephens

The benefitted and burdened tenements must be sufficiently proximate, i.e. neighbouring or at least closely adjacent

12

s.79 LPA 1925

Passing the Burden

Equity

  • covenant relating to land is deemed to be made on behalf of a successor in title unless a contrary intention appears from the terms of the covenant
  • Therefore, the burden passes automatically at equity unless expressly excluded

13

In order to provide notice of the covenant for unregistered land:

  • Must enter Class D(ii) Land Charge to be binding
  • S.198 LPA 1925:  registration = notice to world
  • S. 4(6) LCA 1972: if not registered, purchaser of legal estate not bound
  • Doctrine of Notice applies for pre-1926 covenants

14

In order to provide notice of the covenant for registered land:

  • Must enter s.32 Notice on Charges register to be binding
  • S.32 LRA 2002:  registration = notice to world
  • S.29 LRA 2002:  if not registered, purchaser of legal estate not bound

15

Renals v Cowlishaw

Passing the Benefit

Equity

  • There are 2 conditions for the benefit to pass in equity:
    1. The covenant must touch and concern the land
    2. Renals v Cowlishaw [1878] - The successor in title to the covenantee must have become entitled to its benefit by either annexation, assignment or business scheme

16

Annexation

  • The benefit of the covenant is stuck to the land from the outset, becoming an incorporeal hereditament in one of 3 ways:
    • Express
    • Implied (rare)
    • Statue (s78 LPA 1925)

17

Rogers v Hosegood

Express Assignment

  • covenant made for the benefit of the dominant land, e.g. “for the benefit of the land known as”

18

Renals v Cowlishaw

Express Assignment

Personal

  • Annexation will not occur if held to be personal and not for the benefit of land

19

Federated Homes Ltd v Mill Lodge Properties Ltd

Statutory Annexation

Benefit Equity

  • s78 LPA 1925 operates to automatically annex the covenant of each and every part of the land if it touches and concerns the land

20

Roake v Chadha

Statutory Annexation

s78 can be expressly or impliedly excluded

  • approved in Crest Nicholson Residential South Ltd v McAllister

21

Wrotham Park Est Co Ltd v Parkside Homes Ltd

 

Any size of land can be annexed

22

Assignment

Benefit in Equity

  • If not annexed on creation, the benefit can be assigned (transferred) to the successor expressly.
  • Any assignment must comply with the formalities set out in s53(1)(c) LPA 1925 – signed in writing and signed by person transferring it because represents disposition of an equitable interest

23

Miles v Easter [1933]

Assignment

Benefit Passing in Equity

  • The benefit must be assigned every time the property is transferred

24

Elliston v Reacher

Scheme of Development

Passing of Benefit in Equity

  • Conditions for the benefit to pass come from Elliston v Reacher:
    • All purchasers acquire their property from the same vendor
    • The vendor has divided the estate into plots prior to the sales
    • The restrictive covenants were intended by the vendor to continue for the benefit of all the plots
    • Every purchaser must acquire the plot on the understanding that the covenants benefit all the other plots in the scheme

25

Austerberry v Oldham Corporation

Burden in Common Law

General rule – the burden does not pass at common law

26

Halsall v Brizell

Exception

Burden in Common Law

Where covenantor has been granted a right as the result of a deed, they must also submit to any burdens

Exception to Austerberry v Oldham

27

Rhone v Stephens

Exception 

Burden in Common law

For the burden to pass, it must be explicity interlinked with the benefit

The principle does not apply in reverse - bearing the burden does not entitle you to the benefit (Parker v Roberts)

28

Davies v Jones

Exception 

Burden in Common law

Benefit and burden must be set out in the same deed

29

Thamesmead Town Ltd v Allotey

Exceptions

Burden in Common Law

  • successor in title must have a genuine choice. If you choose to take the benefit, you must submit to the burden.
    • If there is no choice, then the burden will not pass

30

Tophams v Earl of Sefton

Pursue Original Covenantor

  • applying s79 LPA 1925, the original covenantor remains liable under the common law for any breaches of the covenant, even if it is the successor that commits the breaches.
    • However, the original covenantor can only pay damages
    • May be of limited use