Freehold covenants

What is a covenant?

A: A covenant is a promise in a deed relating to land.

Distinguish between positive and restrictive covenants.

• A positive covenant requires expenditure or action (e.g. repair a wall).

• A restrictive covenant restricts land use (e.g. residential use only)

Q: In a covenant, who are the covenantor and covenantee?

• Covenantor = person making the promise

• Covenantee = person receiving the benefit

What are dominant and servient land?

• Servient land = burdened land

• Dominant land = benefited land

What is the status of restrictive covenants and what formalities are required to create covenants?

Restrictive covenants are recognised as proprietary rights in equity under s1(3) LPA 1925. Under s53(1) LPA 1925, covenants must be in writing and signed.

What are the four main covenant enforcement questions?

1. Enforcement between original parties

2. Whether benefit runs to successor of covenantee

3. Whether burden runs to successor of covenantor

4. Whether both benefit and burden run to successors

When can a third party enforce a covenant under s56 LPA 1925?

A: The covenant must purport to be made with the third party, who must be identifiable and in existence at the time the covenant was created.

How did the Contracts (Rights of Third Parties) Act 1999 change third-party enforcement?

A third party may enforce if:

1. The contract expressly says so; or

2. The term purports to benefit them.

They only need to be identifiable by name, class, or description and need not exist when the contract was made.

What are the four common law requirements for the benefit to run?

1. Covenant touches and concerns the land

2. Benefit intended to run

3. Covenantee/successor has legal estate

4. Benefited land identified

What does “touch and concern” mean?

A: The covenant must affect the land’s use, nature, value, or enjoyment rather than being purely personal.

Which provisions imply intention for benefit/burden to run with land?

• s78 LPA 1925 → benefit presumed to run

• s79 LPA 1925 → burden presumed to run

What is the common law rule on burden running?

The burden of a covenant does not run with freehold land.

Why are positive covenants generally unenforceable against successors?

Because they impose personal obligations on someone who never covenanted.

What is the doctrine of benefit and burden? and requirements*

A: A successor cannot take a benefit under a deed without accepting connected burdens.

Requirements:

1. Benefit and burden arise from same transaction

2. Burden is reciprocal to benefit

3. Successor can reject the benefit

What are the requirements for burden to run in equity under Tulk v Moxhay?

1. Covenant must be restrictive

2. Covenant benefits covenantee’s land

3. Burden intended to run

4. Covenant properly registered/protected

Why can only restrictive covenants run in equity?

Equity will not enforce positive covenants against successors.

What are the three methods by which benefit can run in equity?

1. Annexation

2. Assignment

3. Scheme of development

What is annexation and what are the key rules?

Annexation attaches covenant benefit to land. The benefited land must be identifiable.

What are the rules for assignment of covenant benefit?

• Must comply with s136 LPA 1925

• Must be in writing

• Notice given to covenantor

• Must occur alongside transfer of land every time

What is a scheme of development?

: A system of mutually enforceable restrictive covenants affecting properties within an identifiable area.

Requirements:

1. Defined area

2. Mutual intention for all purchasers to benefit and be bound

Rhone v Stephens [1994] 2 AC 310

positive covenants do not run with freehold land, meaning successors in title cannot be compelled to perform obligations requiring expenditure or action. The case firmly establishes the distinction between positive and negative covenants, reinforcing that only restrictive (negative) covenants can bind successors in equity. The significance of the case lies in its rejection of attempts to circumvent this rule, particularly by using easements or the benefit and burden doctrine.

Halsall v Brizell

• Benefit and burden doctrine.

• Cannot take benefit without connected burden.

Davies v Jones

4. Know the 3 requirements for benefit and burden:

• Same transaction

• Reciprocal benefit/burden

• Ability to reject benefit

5. P and A Swift Investments v Combined English Stores Group

5. touch and concern”.

Lord Oliver test

A covenant touches and concerns the land if:

1. The covenant benefits the owner for the time being of the land

   • The benefit is linked to ownership of the land, not a personal advantage.

2. The covenant affects the nature, quality, mode of use, or value of the land

   • It impacts how the land is used or its value/enjoyment.

3. The covenant is not expressed to be purely personal

   • It must relate to the land itself, not just an individual.

Smith and Snipes Hall Farm v River Douglas Catchment Board

• Touch and concern

• Legal estate requirement

• Identifying benefited land

Federated Homes Ltd v Mill Lodge Properties Ltd

• s78 LPA automatically annexes benefit if covenant touches and concerns land.