Lecture Notes: Freehold Covenants

Introduction

• Concept of Freehold covenants can be complex due to various variables:
  • Covenantor and Covenantee
  • Common Law vs. Equity
  • Positive vs. Negative Covenants
• Lecture aims to explore these in detail for better understanding, particularly for exams and coursework.

Key Definitions

• Covenantor: The person making the promise (e.g., mowing the lawn), holds the burden of the covenant.
• Covenantee: The person receiving the benefit from the covenant (e.g., having the lawn mowed).

Covenants and Land Transactions

• Importance of understanding covenants in problem scenarios.
• Scenario: Woman sells part of her land to a man, who becomes the Freehold title owner with a covenant to mow her lawn.
• Key issue: What happens when original owners move on?

Common Law vs. Equity

• Common Law:

  • Privity of Contract: Contract is between original parties only.
  • Burden generally does not pass – Case: "Osterbur and Corporation of Alen".
  • Benefit can pass – Case: "Smith and Snipes Hall Farm Ltd and River Douglas Catchment Board (1947)".

• Equity:

  • Case: "Tulk v Moxhay (1843)": Burden can pass if purchaser has notice.
  • Distinction between positive and negative covenants needed.

Positive vs. Negative Covenants

• Positive Covenants:

  • Requires action, often monetary (e.g., mowing a lawn).
  • Burden does not pass in common law and only in specific equity circumstances – Case: "Holol and Brazil (1957)".
  • Limited effect in equity: Reciprocating benefits and burdens are key.
  • Law Commission Report (2011) discusses possible expansion.

• Negative Covenants:

  • Prevents actions (e.g., not building on land).
  • Easier transfer of burden in equity if several requirements are met.

Requirements for Burden Transfer of Negative Covenants

• Must touch and concern the land.
• Dominant land must benefit (Case: "Kelly v Barrett").
• Presumed intention for burden to run with land – Section 79 Law of Property Act 1925.
• Covenant must be registered – Class D(ii) land charge for unregistered, registered notice for registered land.

Benefit of a Negative Covenant

• Can run in three situations:
  • Annexation: Permanently attached to the land – "Federated Homes Case".
  • Assignment: Transferable to new land – Requires simultaneous conveyance.
  • Schemes of Development: Covenants affecting multiple properties like a housing estate.

Third Party Rights

• Not a direct party to covenant but affected:
  • Section 56 Law of Property Act: Allows third-party claims if the covenant is made with them.
  • Contracts Rights of Third Parties Act 1999: Section 1 allows third-party rights if the contract benefits them.

Remedies

• Injunctions:
  • Used to stop or enforce actions related to covenants.
  • Types: Quia timet (anticipatory), ongoing breach prevention, mandatory.
• Damages:
  • Alternative where injunction is too burdensome – Case: "Shelfer v City of London Electric Lighting Co".

Discharge/Modification of Covenants

• Can apply to the Upper Tribunal (Lands Chamber) under Section 84 Law of Property Act.
• Grounds include obsolescence, impractical benefits, all parties' consent, and no injury.

Exam Tips

• Identify parties involved (Covenantor/Covenantee).
• Consider scenarios of land changing hands and how it affects covenant obligations.
• Determine if dealing with common law or equity.
• Identify type of covenant: positive or negative.

Conclusion

• Freehold covenants are complex, require detailed understanding.
• Important to plan and structure answers in problem scenarios.
• For questions, engage with additional resources or discussion boards.