Freehold Covenants Essay Examples
THIS IS HOW I WOULD STRUCTURE IT:
Define covenant; establish who the covenantor and the covenantee is in the problem. If the three covenants set out by H are positive or negative (restrictive covenants) and briefly point out the key problems you will expand on in the scenario.
Main body –
Talk about the general rules of law in covenants:
Enforcement at common law:
Benefit of the covenant can run but the burden cannot. L’S BENEFIT WILL RUN
Contract rights of third parties act 1999 - section 1 enables a person who is not a party to a contract to take the benefit of a contractual term, which purports to confer a benefit on him. As R AND L ARENT ORIGINAL PARTIES TO THE CONTRACT THEY CANNOT BE SUBJECT TO THE COVENANT.
The running of benefit at law smith v snipes farm, P & A swift investments 1989 (EXPLAIN HOW THESE CASES RELATE)
section 79 (1) LPA – The original covenantor being liable for any breaches by successors in title
Enforcement in equity:
Certain negative covenants can run in land… Tulk v Moxhay 4 requirements: the covenant must be negative/restrictive, it must touch and concern the dominant land, covenant must be made with a intent to burden the servient land , covenant must be made to benefit the dominant land retained by the covenantee.
Other ways benefits can run in equity through… for L’s BURDEN TO RUN WAS ANY OF THESE METHODS USED? annexation (attachment of benefit to land), assignment (attaches benefit to person), scheme of development(local laws inside that land made).
- The remedies available for R/ L ,
- damages awarded by court, (SHELFER V CITY OF LONDON (1895) DAMAGES AWARDED TO L FOR BREACHES OF THOSE COVENANTS IF THEY CAN PROVE THE BENEFIT RAN?
- injunctions, (CHATSWORTH ESTATES 1931)
- discharge of covenant s.28 LPA MAYBE R COULD DISCHARGE OF THE COVENANT IF IT DOESN’T SEEM REASONABLE FOR THE PURPOSE.
This is a sample of our (approximately) 14 page long Freehold Covenants notes, which we sell as part of the GDL Land Law Notes collection, a D package written at Cambridge/Bpp/College Of Law in 2017 that contains (approximately) 455 pages of notes across 58 different documents.
Freehold Covenants Revision
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Promise usually contained in a deed and enforceable without the need for consideration
Covenantor: Burden: Servient Land
Covenantee: Benefit: dominant land
Purely personal or 'touches and concerns' the land - i.e. made for the benefit of the covenantee but in his/her capacity as the owner of that particular property
Covenants can be proprietary interests: a purchaser may buy the land subject to/with the benefit of covenants Enforcement between original parties while still in possession A enters into covenant with B: creates legally binding contract: enforceable between these parties (privity of contract): enforceability under usual rules of contract
N.B.: s. 56 LPA 1925: 'a person may take the benefit of a covenant even though he is not named as a party to the conveyance': but in case law this has been limited in its application: would only apply, for example if A made the covenant to M and 'to owners of adjacent properties for the timebeing': only those adjacent landowners not as parties to the deed, would have the right o
Beswick v Beswick - for a non-party to take the benefit he had to be identifiable from the original covenant
Essentially, at common law, the benefit passes but the burden does not. In equity, the benefit passes, and the burden of a restrictive, but not a positive covenant, does pass where the successor has notice Transmission of Covenants at Common Law
Common law rules were inadequate so equity intervened - especially regarding passing the burden
The Benefit Express assignment
Benefit must be expressly assigned by the original covenantee (B) to his/her successor (Y) under S136 LPA 1925 as a chose in action
1. The assignment is in writing; and 1
2. Express notice in writing of the assignment is given to the original covenantor Implied passing of the benefit: benefit may still be enforceable if certain conditions met: confirmed by HL in P & A Swift Investments v Combined English Stores Group plc
1. Touches and Concerns the Land
2. Original parties' intention that the benefit should run with the land retained by the covenantee
3. At the time the covenant was made, the covenantee must have a legal estate in land
4. Successor in title must hold legal estate in land
1. Touch and concern the land
Must show objectively that the covenant benefits the nature, quality, mode of use or value of the land rather than the owner personally
P & A Swift Investments v Combined English Stores plc  (HL): Concerns a leasehold covenant, but ratio still applicable: Lord Oliver drew on the test of touch and concern from Rogers v Hosegood to establish fully comprehensive test for where a covenant does touch and concern the land: in this case conditions were satisfied 1) Covenant benefits only the reversioner for time being, and if separated from the reversioner ceases to be of benefit to the covenantee; and 2) The covenant affects the nature, quality, mode of user or value of the land of the reversioner; and 3) The covenant is not expressed to be personal
Covenant not to compete with a business being carried out on the covenantee's land may touch and concern the dominant land - it may be argued that such a covenant improves the enjoyment and utility of the dominant land - Newton Abbot Cooperative Societ Ltd v Williamson & Treadgold Ltd
2. Must show original parties' intention that the benefit should run with the land retained by the covenantee 2
Evidence may be in original transfer deed: e.g. 'the Purchaser hereby covenants with the Vendor for the benefit of the Vendor's retained land known as Blackacre' or by the covenantor covenanting with 'the covenantee, his successors in title to land known as Blackacre, and those deriving title under him or them'
If the covenant does not expressly state that it is to benefit the land or successors in title - intention will be implied as a result of s78(1) LPA 1925
3. At the time the covenant was made, the covenantee must have held a legal estate in the land
At CL: covenants attach to the legal estate and pass with it: must have legal estate at time of covenanting
4. Successor in title must hold a legal estate in the land
Successor in title must also own a legal estate - historically this meant ownership of the same legal estate - but his has now been modified: Smith and Snipes Hall Farm Ltd
Contracts (Rights of Third Parties) Act 1999
Under this, a person may take benefit of covenant under certain circumstances - even though not party to the original contract
Applies to all contracts after 11 May 2000 - may have usurped function of s56 above but has yet to be tested in relation to freehold covenants in land: not usually used in tort, more of a last resort
Position of the original covenantee
At common law, the original covenantee may still be able to enforce the covenant if: a) The right has not been expressly assigned to his/her successor under s136 LPA 1925; and b) The covenant was not drafted so as to apply only while the covenantee continued to own the dominant land
But: unlikely to want to enforce it and unlikely to have suffered any loss (so nominal damages)
The Burden Doesn't pass at common law 3
At common law, the burden, positive or negative, can never pass with the freehold land; it remains personal to the covenantor (Austerberry v Oldham Corporation)
Breach cannot be enforced directly vs. a successor who commits a breach, but the burden doesn't disappear
Rhone v Stephens: considered and confirmed the rule that the burden doesn't pass
Covenant to keep the common roof over the properties in good repair: should not pass on
Ways to circumvent the common law rule on "burden" Pursue the original covenantor: original covenantor remains liable on all covenants to whomsoever has the benefit
Idea of continuing liability can be conveyed expressly with words such as 'the covenantor covenants for himself, his successors in title and all those deriving title under him or them' - extended by s79(1) LPA 1925 which implies certain wording into covenants
The effect of this is to make successors shoulder liability: Tophams Ltd v Earl of Sefton
But value is limited as can only claim for damages rather than for specific performance, injunction etc. Indirect enforcement via a chain of Indemnity Covenants
When the original covenantor sells his land - he can extract an indemnity covenant from the purchaser - a separate covenant btw A (original covenantor) and X (purchaser) : so where A is liable for X's breach - A could enforce the indemnity covenant vs. X and recover from X the damages A paid out in respect of X's breach of covenant: Means of indirect enforcement
Need to extract indeminity covenants from each successor for the threat of indirect enforcement to work: problematic if it has passed through numerous successors: need a complete chain of indemnity covenants
Mutual benefit and burden: Halsall v Brizell
Cannot take the benefit of a right over your neighbours land without taking the corresponding burden
Halsall v Brizell: owner of a house, had a right to use the roads and sewers on the estate together with a covenant to pay his proportion to the maintenance of the roads and sewers: held that if a successor wanted to take the benefit of the right to use the roads and sewers, he had to take the burden of paying for the covenants. 4
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