Welcome to Law Sessions. I'm Jennifer Housen. In this session, we will explore freehold covenants.
In an earlier session, of course, we've looked at leasehold covenants, but in this segment, it is all about covenants. between freeholders. Now this segment concerns promises that are made between freeholders of the land in relation to the way they use the land. Now if you go back to the introduction and certainly to when we considered certain terminologies in land, if you remember, freehold looks at the best ownership right you can have, which is a fee simple absolute in possession. And so you're a freeholder.
And the idea is what happens when, for want of a better terminology, I own my house, then I'm a freeholder and I own my house and you own your house. Can I restrict the way you use your house? your land, for example.
So freehold covenants often arise where a person sells the freehold in part of his land, but he wishes to restrict the way that the land is used afterwards. So for example, let's say I sell you part of my land. So let's say I sell you the garden, for example, of my land, because let's assume I live on a two acre piece of land and I sell you the butt garden, which is an acre.
Well, the possibility is that I may very well not want you to build a high-rise apartment building on that piece of land. So what I would then do is within the conveyance is to ensure that I restrict what it is you can do with the land. Because let's say, for example, you want to build a factory and there are smells coming from the factory.
Again, I may want to restrict that. Now, we don't have a problem or this may seem all very well and good as between the original seller and purchaser since the promises themselves are enforced as a matter of contract. But what happens if each piece of land is then subsequently sold to a third party. Well clearly there is no privity of contract between such persons. Now it has long been possible for the benefit of a contract to be assigned to a third party, but the courts would not allow the burden of a contract to be assigned.
So most of what we're looking at here in regards to freehold land, as I said, is where, for example, I own Blackacre and Whiteacre, or before it was Blackacre and Whiteacre, it was just simply Blackacre, but I've divided it. And let's say I call the gardens Whiteacre and I sell Whiteacre to you. Well, the fact is, between you and I, we...
We have agreed that we will place certain restrictions. You've accepted it, you being the Covenantor, and I've gotten the burden of it, me being the Covenantee. But should that continue?
If, for example, I sell my portion, which I continue calling Black Acre, or you sell your newly acquired White Acre, why should it be that it continues to bind any subsequent purchaser? Now, if I take you... back to contract law and privity of contract if you remember there are certain exceptions to privity of contract and one of those exceptions of course is the precise of the air we are looking at which is there may be covenants and certainly the way parties deal as between each other in relation to covenants which may take it outside privity of contract again land law is very special in that it is a special type of contract and as such because it is a real property it is the type of property that is unique there are rules as relating to land contracts which certainly do not relate to any other type of contract so what we will see here is that notwithstanding privity of contract, there will certainly be benefits and burdens, issues as relating to parties.
who are not in privity, which will certainly be enforceable, albeit that there is no privity as between parties subsequently. Well, in the 19th century, the courts of equity allowed the burden of covenants to be attached to the land because the idea was that traditionally and historically, you could get the benefit, but the burden, unfortunately, wouldn't pass. So as I say, equity has allowed this. so that certain covenants which are attached to the land will pass on so that they affect anyone who then acquires the land. Now, originally, equity enforced both positive covenants, and positive covenants are covenants that require the owner of the land to do certain things, for example, to maintain a common fence that run between two properties.
Now, here's a distinction. Positive covenant usually require... the owner of the land to do something as opposed to negative or restrictive covenants which is what we're dealing with here in freehold covenants and these type of covenants are covenants that restrict the way the owner of the land uses his land for example not to use the premises for business purposes now if you ever want to have in your mind a clear distinction of a positive and a negative covenant you tend to find that a positive covenant as I said requires you to act and in and in acting sometimes to spend money but here's one way of knowing if you're dealing for example with a negative covenant If you can, for example, lie in your bed and do nothing and comply with the covenant, it is a negative covenant. So if it says, do not build a house, high-rise block of flats on the land if you lay in your bed and did nothing you would comply with the covenant and that makes it a negative covenant that is one way for me anyway to remember it because it allows you to understand that as we go in further you will see there are certain times when a covenant is drawn negatively, but it has a positive impact. For those of you among us who do maths, of course, think of the double negative.
So you will not not do something will certainly mean that you will do it. So positive covenants used to not be enforced, but now so used to be enforced. But now we see as it. it relates to restrictive covenants nowadays it will only be enforceable if it is a negative covenant so we've seen this is what has happened over time in that equity says that when you're looking at a restrictive covenant it tends to be negative in order to be enforced now since covenant only exists in equity then of course it is going to be vulnerable to all sorts of issues. Now as we have seen and as I have mentioned you are required to for example ensure that any equitable interest you have is protected.
A covenant is always equitable. So restrictive covenants have to be given appropriate protection. And of course, we will touch on this closer to the end of the session. Now, in relation to the remedies used to enforce restrictive covenants, such as injunctions, again, these are based in equity. And because we are looking at an entirely equitable framework, then it is all about discretion.
which unlike the common law remedy of damages is available as of right. It is not available as of right and as such because it is discretionary you have to ensure that the maxims of equity you meet them. The case that first established restrictive covenants of course in Friuland is that of Tolkien Moxie in 1848. It is a case that I will urge you that you should consider.
you read and ensure you understand not only the facts but points coming from it. Now the rules relating to restrictive covenants depend on whether one is looking at whether the benefit of the covenants have passed to a successor in title or one is looking at whether the burden has passed. to the successor in title we have seen that the common law would allow the benefit of the covenant to pass to the success to success successor but equity followed the law here and largely adopted the common law rules so both at common law and in equity we would see the benefit passing however in deciding whether the burden would then pass or run to a successor in title equity developed its own rules. Thus, this particular area of the subject can become a little bit complicated since there are two set of rules, the common law rules and the equitable rules that have to be followed.
Because within the common law rules, we see that the benefit will run at common law, the benefit will run in equity, but the burden only ever runs in equity because... at common law, it will never run. Now let's just get clear on a few definitions that we have to encounter as we go through this session.
First of all, covenant itself. Well, a covenant is a promise contained in a deed, and it's usually in the transfer or the conveyance of the freehold estate, though it may, of course, be in a separate deed. The covenantor is the person who is the person who who makes the promise the Covenant T is the person to whom the promise is made so of course if Blackacre is sold to if the owner of Blackacre sells Whiteacre then the person on Whiteacre who has agreed that he will not build, for example, a high-rise flat, will be the Covenantor. And the Covenantor, of course, would be the owner of Blackacre who is getting... the benefit.
He's the one who said you will not build a high-rise building on Whiteacre. So the Covenant is the person seeking to enforce the covenant. When we speak of the dominant tenement, this is the land owned by the Covenantee. This is the land which has the benefit of the covenant.
And the Servian tenement, this is the land owned by the Covenantor and this is the land which has the burden of the covenant. Positive covenants we've touched on already and a positive covenant will require the person making the promise to positively do something. So for example to act or maintain or appear. A negative covenant is a negative restrictive covenant which will require the person making the promise not to do something.
So for example not to use the property in a particular way. Now freehold covenants can be seen by some as a private control. of land use and this involves the landowner seeking to regulate how the land is used even after purchase. Now the arrangement which people make to take the form of covenants will not only have an effect on the parties entering to the arrangement at the time but also it will have an effect on the successors in title and a covenant is simply a promise contained in a deed, a promise within a a contract between two contracting parties which is elevated to the position of a covenant if it is made under deed. Now again if you remember if you do something by deed from contract law it does not necessarily have to show any sort of consideration and in fact you will see that when you look at the covenantee he doesn't necessarily give anything.
It is the covenantor. who says, I will not build a high-rise flat on my land. The covenantery does nothing. He's the one who's taking the benefit.
So again, precisely because it is a covenant, precisely because it is unlikely to have any consideration attached to it, it needs to be under deed. It is described as an undertaking of one party, which will act as an encumbrance on his land, and which will benefit the land of the other party. So an example of a promise under a covenant of freehold land is a promise to keep a roadway leading to a property in good order and repair. Now, landowners are perfectly free to enter into any contractual relationship they see fit with regards to the sale and use of their property, providing the other parties are happy with it, happy to enter into it, and have signed up to it.
Now then, we will pause there and when we come back, we will consider further some of the other problems that we have discussed. of the issues in relation to freehold covenants and see how this area actually operates in practice