FREEHOLD COVENANTS 2

FREEHOLD COVENANTS 2

1. Step 3 - Running of the burden in equity

   • Rules from TULK v MOXHAY
     • 1) Only applies to negative/restrictive covenants
       • A positive covenant may not pass in equity from RHONE v STEPHENS
         • 2) Must accommodate the dominant land: Original covenatee was owner of the benefitted land when covenant granted
           • The dominant and servient tenements must have enjoyed sufficient proximity
             • Proximity test from FORMBY v BARKER - covenants binding land in Hampstead too remote to benefit land in Clapham!!
               • Original parties must of intended burden to run with land, either expressly in deed or impliedly. s79 LPA following case of FEDERATED HOMES v MILL LODGE PROPERTIES
                 • 3) Burden of the covenant must have been intended by both parties to run with servient land. Expressly or impliedly!

2. REGISTRATION OF RESTRICTIVE COVENANTS

   • In many cases even if all conditions are met, will only bind successor if registered
     • Pre 1926 - Doctrine of Notice
     • Post 1926 - Unregistered land needs land charge. Registered land by way of notice
     • If not registered, void for BFP (Cannot be an overriding interest in registered land)

3. Step 4 - Running of benefit in equity

   • Benefit will pass in equity if it touches and concerns the land
     • Or the benefit passes by: Annexation; Assignment or under a Building Scheme
       • Covenant touch & concern the land from SMITH & SNIPES HALL FARM v RIVER DOUGLAS CATCHMENT BOARD
         • Annexation - Expressly: where words of covenant show that benefit was intended to pass to new owners of DT
           • Or impliedly: s78 LPA when covenant relates to the land, benefit will be annexed to DT, unless evidence to the contrary. FEDERATED HOMES v MILL LODGE PROPERTIES
             • Assignment - Unless covenant is annexed to land will remain separate from it. For benefit to pass must be an express assignment of covenant
               • Assignment must be at same time as transfer of the land, usually within transfer deed - ROAKE v CHADHA
                 • Required with every sale or purchase of the land
                   • Building scheme - when a scheme exists, benefit and burden of covenants will pass with land
                     • Requirements in ELLISTON v REACHER
                       • Must be a common vendor
                       • Estate must be laid out in plots before selling
                       • Restrictions must benefit all the lots
                       • Parties will have purchased on basis that covenants enforceable by all other purchasers in same scheme
                       • Area of the scheme is clearly defined

4. REMEDIES at CL

   • If able to prove benefit and burden, could only claim damages, court does not have discretion
   • In Equity - If able to prove benefit and burden may be able to claim, Injunction (Restrictive); Specific Performance (Positive) or Damages
     • Damages would only be awarded when: Injury to claimants rights is small; the damage can be estimated in money; damage can be adequately compensated with small payment or injunction would be too oppressive

5. Discharge of Covenants as they can become outdated

   • Express Discharge - will the benefitted owner agree to the discharge?
   • Unity of Seisin - if you buy both the benefitted and burdened property
   • S84 LPA - Covenants discharged forcibly. ie formerly residential area
   • s28 LPA - Enforced by tribunal

6. Reform Proposals

   • At present: person who agreed to covenant has contract and can be sued.
     • Even if they no longer live at the property
   • Introduction of a 'land obligation' binding on successors
     • Would no longer be enforceable against original covenantor
       • These land obligations would be positive and negative
       • Would be registrable
         • Moving towards the covenant being to the property and not the current owner