Freehold Covenants

Freehold Covenants are binding promises made by freehold owners in which the covenantor agrees to do/not do something on their own land for the benefit of the covenantee. They can therefore be either positive or negative.Wilkes v Spooner: Anti-competition clause to not carry out business on property amounted to a covenant.Luxton v Wilkie: The owner of land had restrictions upon how he could transfer the land.  Covenants are not contractual rights and so provide remedies at law, they are also proprietary and so provide remedies at equity too.  As contractual rights covenants cannot bind third-parties. However, as equitable rights they can bind the transferee (purchaser). The benefit must pass to the claimant and the burden must pass to the defendant. The claimant therefore has the right to damages at law or an injunction/ specific performance at equity (note: equitable remedies are discretionary) Grafford v Graham: claimant demanded damages and an injunction. He was not given them as he acquiesced to the breach of covenant. Jaggard Sawyer: damages are assessed upon what is reasonably regarded as compensation. The original parties:The original parties retain rights against one another even if they are no longer in ownership of the covenanting land. If the covenantor has sold their original land, the covenantor remains liable to whomever retains the benefit. The covenantee can sue at law or equity.If the covenantee has sold their original land he can still enforce a covenant against the covenantor, however there is no real burden or loss and so damages are likely to be nominal. River Douglas: If the original covenantor had no land at the time of the creation of the Covenant, they are still liable. A covenantor is liable to maintain and repair river even though they did not actually own the land at the time the benefit was created.Successors in Title to the original Covenantor- passing the Burden of Restrictive CovenantsIt is not possible for the burden of a covenant to run with the land at law, it can only run at equity. Only the burden of restrictive covenants are capable of passing at equity.Tulk v Moxhay: Restrictive covenant was enforced by the claimant against the defendant whom was not the original covenantor. A restrictive covenant can be enforced against one whom is not the original covenantor as long as they were made aware of the contractual obligation by the vendor. Rhone v Stephens: The doctrine of Burden and Benefit states that if a benefit is linked to a burden, the benefit cannot be taken without the burden, therefore covenants which are both positive and restrictive may run at equity. Privity of contract prevents a covenant from running at law to a new Covenantor. The restrictive covenant must touch and concern the landSwift Investments: The covenant touches and concerns the land if:-The covenant benefits the reversioner and will cease to exist without the land-The covenant affects the nature/quality/use of the land-The covenant is not expressed to be personal-A covenant of a sum of money will not prevent it from touching and concerning the land.  The covenant must have been imposed to benefit the land of the covenantee  The burden of the restrictive covenant must be intended to run with the land, s79 LPA 1925. Morrelles v Oxford Unlimited: Annexation of the burden occurs unless a contrary intention appears Restrictive covenants must comply with the rules of registrationS29 LRA 2002: registered dispositions must be protected by noticeLand Charges Act: non-resisted dispositions mus be registered as a land charge.  Successors in Title to the original Covenantee- passing the BenefitThe benefit of the covenant may pass at law or in equity.Law, s78 LPA 1925: Covenant must touch and concern the land of the original covenantee  The claimant must have a legal estate in the land The benefit of the covenant must be annexed to the legal estate either expressly or impliedly  Express annexation- Words which make it clear that the benefit is for the land/ is intended for successors in titleFederated Homes: If a covenant of the land restricts the user, it cannot run with the land. It must be capable of benefiting the covenantee whether it is positive or negative. Under s78 LPA a covenant may be either positive and negative, but it can only annexed if it can be easily identified from the deed. Implied Annexation- the covenant affects the value, nature or method of enjoyment of the landEquity: Covenant must touch and concern the land of the original covenantee Claimant must have legal or equitable estate The benefit of the covenant can be transmitted either expressly or impliedly  Express annexation- s 78 LPA 1925Express or Implied Assignment- Roake v Chadha: s62 LPA 1925, the original covenantee may expressly assign the benefit at the same time as transferring the land Building schemes- benefit may pass in equity under a scheme of development by enforcing rules of common intention. This creates mutually enforceable obligations by giving the benefit of every covenant to every purchaser. Elliston v Reacher: Each purchaser had to observe the same restrictions, this created an effective building scheme which could be held against successors in title. must have common vendormust be lain down in plotsbenefit must be intended to be mutually enforceablepurchasers must have bought land knowing the benefit was mutually intended.Passing the Burden of Positive Covenants:Chain of Covenants:Each purchaser covenants separately with their immediate predecessor.Thamesmead Town: in order to enforce a positive covenant the successors in title must have a choice as to whether they will acquire the rightsArtificial Long Lease:Positive covenants in leases may bind successive owners. By enlarging a lease to a freehold the covenants may bind successive owners.Mutual Benefit and Burden:A positive covenant which imposes both a benefit and burden may be enforced as long as the burden is intrinsically linked to the benefit, the person must choose to accept both the benefit and burden. Discharging and Modifying Freehold Covenants:s84 LPA 1925: allows the dischargation and modification of freehold covenants. The covenant must be obsolete due to changes in property; continuing it would obstruct the use of land; a mutual agreement.Law Commission: all land obligations should be registrable and enforceable against successors in title. Original parties should not be liable. 

Notes