Notes on Freehold Covenants by Jennifer Housen

Introduction

• Focus on freehold covenants, contrasting with previous discussion on leasehold covenants.
• Freehold covenants involve promises made between freeholders regarding land use.
• Freehold represents the best ownership right: fee simple absolute in possession.

Key Concepts of Freehold Covenants

• A freeholder owns land (e.g., a house) and may want to restrict how a neighbor uses their land.
• Common scenario: Selling part of land (e.g., garden) and imposing restrictions on the buyer.
• Example: Seller restricts buyer from building a factory that could create unpleasant smells.

Legal Framework

• The issue of privity of contract arises when land is sold to subsequent parties.
  • Original seller and buyer have a contract, but what happens when they sell to third parties?
  • Benefit of the contract can be assigned, but traditionally the burden could not.
• Equity allows the burden of covenants to attach to the land, affecting future owners.

Types of Covenants

1. Positive Covenants
   • Require the landowner to perform certain actions (e.g., maintain a fence).
   • Historically enforced, but now only negative covenants are enforceable in practice.
2. Negative Covenants
   • Restrict land use (e.g., not allowing commercial use).
   • If compliance means doing nothing (e.g., laying in bed), it's a negative covenant.

Enforcement and Remedies

• Remedies for enforcing restrictive covenants are typically injunctions based on equity.
• Unlike common law remedies (e.g., damages), equitable remedies are discretionary.
• Tolkien Moxie (1848): Case that established principles of restrictive covenants—important for students to review.

Rules of Passing Benefits and Burdens

• Rules differ for passing benefits vs. burdens:
  • Common Law: Benefit of the covenant passes to successors.
  • Equity: Follows the same for benefits but has unique rules for burdens.
• Covenants: Promises in a deed, usually in a conveyance of freehold estate.
  • Covenantor: Party making the promise.
  • Covenantee: Party receiving the benefit of the promise.

Definitions to Remember

• Dominant Tenement: Land benefiting from the covenant.
• Servient Tenement: Land burdened by the covenant.

Nature of Freehold Covenants

• Seen as private control of land use by landowners.
• Contracts may affect future owners due to covenants included at the time of sale.
• Covenants must be made under deed as they may not involve direct consideration.
• Example of a covenant: Promise to keep a roadway in good repair.

Conclusion

• Landowners can create contractual relationships regarding property use if all parties agree.
• Next session will explore operational issues surrounding freehold covenants.