Freehold Covenants

Question 1

Are covenants capable of being legal?

Answer 1

Covenants are not capable of being legal interests and are equitable by nature.

Question 2

What are the formalities for granting a covenant?

Answer 2

The relevant formality is in writing and signed.

Question 3

Who is the covenantor?

Answer 3

The person who makes the promise and who has the burden of the covenant.

Question 4

Who is the covenantee?

Answer 4

The recipient of the promise and who has the benefit of the covenant.

Question 5

What is the servient or burdened land?

Answer 5

The land bound by the covenant and owned by the covenantor.

Question 6

What is the dominant or benefited land?

Answer 6

The land with the benefit of the covenant, owned by the
covenantee

Question 7

What is annexation?

Answer 7

This means that the benefit of the covenant is attached to the land of the covenantee and the benefit passes automatically to any successor in title of the
covenantee.

Question 8

What is assignment?

Answer 8

An express transfer of the benefit of the covenant to a successor in title to the covenantee.

Question 9

What is a positive covenant?

Answer 9

A covenant that requires some effort or expenditure to perform the obligation.

Question 10

How does the burden of a covenant pass under common law?

Answer 10

It cannot pass because it would result in a personal obligation against a person who has not covenanted.

Question 11

How does the burden of a covenant run in equity?

Answer 11

The burden of a restrictive covenant may pass in equity under the doctrine in Tulk v Moxhay [1848].

Question 12

What requirements must be satisfied for the doctrine in Tulk v Moxhay to arise?

Answer 12

The covenant must be restrictive in substance.

There must be identifiable dominant land owned by the covenantee at the time the covenant is created.

The covenant must touch and concern the dominant land.

The covenant must be made with the express or implied intent to burden the servient land.

The owner of the servient land must have notice of the covenant for it to bind them.

Question 13

What is the test for determining whether a covenant touches and concerns dominant land?

Answer 13

The covenant must benefit only the dominant owner for the time
being, so that, if separated from their land, it ceases to be advantageous to them;

The covenant must affect the nature, quality, mode of user or value of the land of the
dominant owner; and

The covenant must not have been given only to one specific dominant owner.

Question 14

How is the intent to burden servient land implied?

Answer 14

s.79(1) LPA 1925 states that unless a contrary intention is
expressed, a covenant is deemed to be made by the covenantor on behalf of himself and his successors in title and the person’s deriving title under him or them.

Question 15

What are the three devices where positive covenants can be enforced against successors in title of the servient land.

Answer 15

Create a lease

Indemnity covenant

The doctrine of mutual benefit

Question 16

Why does creating a lease enforce positive covenants against successors in title of the servient land?

Answer 16

Because positive covenants are binding on a successor in title to a tenant.

Question 17

What is the doctrine of mutual benefit and burden?

Answer 17

A person who wishes to take advantage of a service/facility which benefits their land, must also comply with any corresponding obligation.

Question 18

What are the two pre-conditions for the doctrine of mutual benefit and burden?

Answer 18

There must be a clear correlation between the benefit and the linked burden.

The covenantor’s successors in title must have the opportunity to elect whether to take the benefit (and accept the related burden) or to renounce it (and escape the related burden).

Question 19

How does the benefit of a covenant run at common law through annexation.

Answer 19

A covenantee’s successor can enforce the covenant at common law if:

The covenant touches and concerns the land.

There was an intention that the benefit should run with the estate owned by the covenantee.

The covenantee must have a legal estate in the benefited land and the buyer must also take legal title.

Question 20

How does the benefit of a covenant run at common law through assignment?

Answer 20

This must take place at the same time as the transfer of land.

It must be in writing and
signed by the assignor (ie the original covenantee) and written notice of the assignment must
be given to the person with the burden of the covenant

Question 21

How does the benefit of a covenant run in equity through express annexation?

Answer 21

The covenant should express an intention to benefit each and every part of a defined piece of land.

Question 22

How does the benefit of a covenant run in equity through implied annexation?

Answer 22

In some situations, the court will be willing to imply annexation where such annexation
was obviously intended and it would be an injustice to ignore that intention.

The required intention must be manifested in the transfer as construed in the light of all the surrounding circumstances.

Question 23

How does the benefit of a covenant run in equity through statutory annexation?

Answer 23

s.78 LPA 1925 automatically annexes a freehold covenant to each and every part of the land retained by the covenantee provided the following criteria is met:

The covenant must have been created after 1925.

The covenant must touch and concern the land.

The dominant land must be identifiable from a description, plan or other reference in the transfer, aided, if necessary, by external evidence to identify the land.

Question 24

What are the characteristics of a building scheme that will result in the benefit of a covenant running in equity?

Answer 24

It applies to a defined area where title is derived from a common owner;

The estate was laid out in lots subject to restrictions intended to be imposed on all the lots;

The common owner intended the restrictions to apply to all the lots to be sold; and

The original buyers bought their lots on the basis that the restrictions would benefit all of
the lots in the scheme.

Question 25

What is the effect of building schemes on the benefit of covenants that run in equity?

Answer 25

Impose reciprocal obligations between the buyers of the different plots of the scheme, including positive covenants.

Question 26

What are the remedies for breach of a positive covenant?

Answer 26

Damages are the usual common law remedy for a breach of a positive covenant.

Specific performance may be available for breach of a positive covenant by the original covenantee but not a successor in title.

Question 27

What are the remedies for breach of a restrictive covenant?

Answer 27

An injunction which can be applied for in anticipation of a breach or in response to an existing breach.

Damages will be awarded where the injury to the claimant’s rights are small and capable of being estimated in money and can be adequately compensated by money and it would be oppressive to the respondent to grant an injunction.

Question 28

What are the methods of removing or limiting the effect of a freehold covenant?

Answer 28

Express release by deed, entered into by owners of the servient and dominant land.

Where the servient and dominant land come into common ownership

s.84 LPA 1925

insurance available for breach of restrictive covenants.

Question 29

How does s.84 LPA 1925 remove or limit the effect of a freehold covenant?

Answer 29

Applies to restrictive covenants only.

An application can be made to the Lands Chamber of the Upper Tribunal (‘the Lands Chamber’) to discharge or modify the covenant in whole or in part and needs to satisfy one of the following grounds:

The restrictive covenant was found to be obsolete; or

The restrictive covenant impedes some reasonable use of the land and either it does not secure any practical benefit or value to the persons it should benefit, or
it is contrary to the public interest
and in either case, money will be adequate compensation; or

That those entitled to the benefit have expressly or impliedly agreed to the discharge; or

That the discharge will not injure the persons entitled to the benefit.