Freehold covenants 1

• Freehold covenants


  Agreements controlling land use, allowing sellers to retain control over sold land
• Key laws


  • Law of Property Act 1925, enabling interest acquisition
  • Contracts (Rights of Third Parties) Act 1999, allowing third-party enforcement of contract terms benefiting them
• The Contracts (Rights of Third Parties) Act 1999 doesn't cover pre-2000 contracts or covenant burdens
• Passing benefits


  Requires consideration during covenantee land ownership changes
• Passing burdens


  Requires consideration during covenantor land ownership changes
• Types of freehold covenants

  • Positive covenants (promises to do something)
  • Restrictive (negative) covenants (promises not to do something)
• Covenantor


  Person making promise and bearing burden
• Covenantee


  Person to whom a promise is made under covenant, who has its benefit, so who can enforce the promise (hopefully) against the covenantor
• Positive covenants are typically under common law, while restrictive covenants can be under either common law or equity
• The passing of benefit or burden depends on changes in covenantee or covenantor ownership
• In equity, both benefits and burdens of restrictive covenants may pass
• At common law, only restrictive covenants' benefits pass
• If the burden of the restrictive covenant needs to pass in equity, the better view appears to be that the benefit needs to pass in equity as well - Miles v. Easter (1933)
• Passing of the benefit at common law

  • The covenant 'touches and concerns' land of the covenantee
  • At the time when the covenant was made, it was intended that the benefit should run with the land to the covenantee's successors in title
  • At the time the covenant was made, the covenantee held a legal estate in the land to be benefited
  • The successor in title derives his or her title from, or under, the original covenantee
• Smith and Snipes Hall Farm Ltd v. Douglas Catchment Board [1949]


  • River Douglas Catchment Board had covenanted with landowners to prevent flooding. When a flood occurred, Mrs. Smith, a covenantee who leased the land, sued. The court determined the covenant's benefit by two criteria: affecting land use/value and intending to benefit future owners.
• Bryant Homes Southern Ltd v. Stein Management Ltd [2016]


  • A landowner sold land with a covenant for agricultural use, though it was intended for residential development. When part of the land was sold, the covenant's benefit was assigned to the buyer. Subsequently, when the land was sold due to mortgage default, the new owners didn't have the covenant assigned to them. However, the court ruled that since the new owners held a legal estate and the covenant affected land use, it was enforceable under LPA 1925, s. 78.
• Touches and concerns


  • The covenant benefits only the landowner; if separated from the land, it loses its usefulness to the covenantee
  • The covenant affects the nature, use, or value of the land
  • The covenant is not specifically made to an individual; it's not a personal promise
• Common law is not going to pass on a burden. The burden of a covenant does not pass under privity of estate in relation to freehold covenants
• Austerberry v Oldham Corporation [1885]


  • The plaintiff tried to enforce a covenant on road repair against the Corporation, who had acquired the land. The court ruled that neither the burden nor the benefit of the covenant ran with the land.
• Rhone v Stevens [1994]


  • A covenant to maintain a shared roof was deemed a positive covenant, requiring expenditure. The court reaffirmed that, unlike restrictive covenants, positive covenants do not bind successors at common law or in equity.
• Positive covenants are generally dealt with under the common law rules and restrictive ones under the equitable rules
• Passing of the benefit and burden in equity

  • The courts have recognized Restrictive Covenants that comply with certain conditions as equitable interests in land and so are enforceable against successors but do not recognize positive covenants in this way.
• Renals v. Cowlishaw (1878)


  • Landowners agreed to restrictive covenants, but when selling the land to new owners, failed to mention them. The court ruled that the new owners couldn't enforce the covenants as they hadn't legally passed with the land.
• Annexation


  The permanent attachment of the benefit of a covenant to the land of the covenantee
• Express annexation


  Occurs when a covenant intends to be attached to identifiable land, benefiting either the entire land or specific parts
• Rogers v. Hosegood [1900]


  • Example of express annexation
• Federated Homes v. Mill Lodge Properties (1980)


  • LPA 1925 assumed annexation to each part unless stated otherwise
• Renals v. Cowlishaw (1878)


  • The absence of land identification made annexation impossible
• Re Ballard's Conveyance [1932]


  • Established annexation to "each and every part" of the benefited land
• Bath Rugby Ltd. v. Greenwood [2021]


  • Imprecise wording negated annexation, denying the Rugby Club its benefit
• Implied annexation


  Annexation may be implied when circumstances indicate that a covenant was intended to benefit a specific piece of land
• Marten v. Flight Refuelling Ltd [1962]


  • A covenant against non-agricultural land use was made between the claimant's predecessor and the Air Ministry, which later allowed a commercial company to occupy the land. Despite no explicit words of annexation, the court held that the covenant was intended to benefit the land.
• Statutory annexation (LPA S.78)

  States that a covenant relating to any land of the covenantee extends to successors in title and persons deriving title under them
• Federated Homes v. Mill Lodge Properties [1980]


  • A covenant restricting development on the "blue" land was held to be annexed to the "red" land, despite no express assignment. The Court of Appeal ruled that s. 78 operates broadly, annexing the benefit of any covenant touching and concerning the land.
• Roake v. Chadha [1984]


  • Clarified that s. 78 wouldn't annex the benefit of a covenant expressed as personal unless expressly assigned
• Crest Nicholson v. McAllister [2004]

  • Land contract case involving annexation
• Statutory annexation (LPA S.78) states that a covenant relating to any land of the covenantee extends to successors in title and persons deriving title under them
• In Federated Homes v. Mill Lodge Properties [1980], a covenant restricting development on the "blue" land was held to be annexed to the "red" land, despite no express assignment
• Roake v. Chadha [1984] clarified that s. 78 wouldn't annex the benefit of a covenant expressed as personal unless expressly assigned
• In Crest Nicholson v. McAllister [2004], land conveyances near Claygate Common contained covenants restricting use to private dwellings and requiring vendor consent for building plans. Some had express annexation, while others lacked clear identification of benefiting land, leading to non-annexation