FREEHOLD COVENANTS

FREEHOLD COVENANTS

1. A contractual promise contained in a deed

   • 2 types: Positive - requiring covenantor to do something - some physical action or financial outlay. ie build and maintain boundary
     • Negative -requiring covenantor not to do something. ie don't use building for business
     • Acid test - HAYWOOD v BRUNSWICK PERMANENT BENEFIT BUILDING SOCIETY - does the covenant require the expenditure of money? Yes = positive; No = negative

2. Covenantor - person promising to observe the covenant

   • Servient tenement

3. Covenantee - person with the benefit of the covenant

   • Dominant tenement

4. Original covenantor liable to perform the covenant until it ceases. Even if property sold on, still liable.

   • If original covenantor still owns property, remedy would be specific performance or an injunction, if they've moved on, remedy would be damages
     • Different rules in CL and equity. CL difficult to enforce against covenantors successors so original covenantor is vulnerable
       • In equity, negative covenants are more easily enforced against successors

5. START WITH POSITION AT LAW

   • Step 1 - Proving the running of the benefit at CL
     • Benefit of both positive and negative covenants may pass by either express or implied assignment
       • Deed may expressly transfer the benefit, but more often implied
         • Assumed that sale will include covenants.. Consider is it useful for the land or a personal benefit? Covenant cannot be personal
           • 4 Conditions: Covenant must touch and concern the land - either affect the land as regards it mode of occupation or the value of the land
             • From SMITH & SNIPES HALL FARM LTD v RIVER DOUGLAS CATCHMENT BOARD
               • X - must have been an intention that the benefit of the covenant should run with the land. Can be express or implied under s78 LPA.
                 • FEDERATED HOMES v MILL LODGE PROPERTIES LTD - s78 given a wide interpretation, a covenant is deemed to run with the land under s78 unless deed expresses otherwise!
                   • X - The covenantee (benefitter) must have had a legal estate in the dominant land
                     • X - New owner must take a legal estate in that land
     • Step 2 - Prove running of burden at CL
       • AUSTERBERRY v OLDHAM CORPORATION says that, at CL, burden of covenant cannot run with the land
         • Confirmed in RHONE v STEPHENS
           • Ways around the rule but in majority of situations, exceptions won't help
             • The rule in HALZALL v BRIZELL - mutual benefit/burden rule
               • if land has benefit of an agreement, he cannot avoid the associated burden of it. ie easement to use driveway coupled with covenant to maintain it
                 • Operation of a chain of indemnity covenants - but if one person dies or is untraceable, chain broken and original covenantor is still liable
                   • Positive easements - (spurious easements) relate to cattle trespassing, rarely applied
                     • Positive easements - CROW v WOOD - says a covenant to fence may be an easement
                       • Enlargement of long leases - s153 LPA 1925
                         • Rights of re-entry/rent charges - payment of rent which allows owner to enter land and carry out work if necessary