Equitable rules: burden and benefit

Equitable rule (burden)

general rule burden does not run at common law

Tulk v Moxhay rule

burden of a restrictive covenant can run in equity if conditions satisfied

Restrictive covenant

obligation not to do something (negative obligation)

Requirement (restrictive)

covenant must be negative not positive

Requirement (dominant land)

covenantee must retain land capable of benefiting

No dominant land

no enforcement of covenant

Touch and concern 2

must benefit the land itself not the owner personally

Touch and concern criteria

affects nature quality use or value of land

Personal covenant

does not run because it benefits a person not land

Example covenant

not to use land for industrial purposes

Proximity requirement

dominant and servient land must be sufficiently close

Intention for burden to run

must be intended to bind successors

Express intention wording

“this covenant shall bind the landowner and successors”

Statutory intention

s 79 Law of Property Act 1925 implies intention unless excluded

Exclusion of s 79

express contrary intention in deed prevents implication

Notice requirement

successor must have notice of covenant

Registered land notice

entry on charges register

Unregistered land notice

Class D(ii) land charge

Failure to register covenant

not binding on purchaser for value

Donee exception

covenant binds someone who acquires land by gift or inheritance

All conditions satisfied

burden runs in equity and binds successor covenantor

Remedy for breach(burden)

injunction

Equitable rule (benefit)

benefit must pass for successor covenantee to enforce

Benefit requirement

covenant must touch and concern dominant land

Methods of passing benefit

annexation assignment building scheme

Annexation

benefit attaches automatically to land

Effect of annexation

benefit passes automatically on sale of land

Express annexation

clear wording linking covenant to specific land

Example express annexation

“for benefit of owners and successors of [land]”

Statutory annexation

s 78 Law of Property Act 1925 implies annexation

Exclusion of s 78

parties can exclude statutory annexation

Assignment

benefit transferred on each sale of dominant land

When assignment used

when benefit was not annexed

Assignment requirement

must be in writing

Assignment repetition

must occur on every transfer of dominant land

Building scheme

mutual enforceability of covenants in estate

Building scheme requirement

common seller

Building scheme requirement 2

land divided into plots

Building scheme requirement 3

covenants intended to benefit all plots

Building scheme requirement 4

purchasers buy with common understanding

Effect of building scheme

all owners can enforce against each other

Original covenantee position

retains benefit in theory

Practical position

no loss suffered so unlikely to enforce

Prohibitory injunction

order preventing breach or stopping ongoing breach

Mandatory injunction

order requiring defendant to undo breach

Delay defeats equity

equity may refuse remedy if claimant delays excessively