Understanding Freehold Covenants

In this lecture, the concept of freehold covenants, particularly the distinction between positive and negative covenants, the parties involved, and how covenants run with the land, is explored. This is crucial for navigating problem scenarios in law.

Key Terms

• Covenantor: The person who makes the promise (burden).
• Covenantee: The person who benefits from the promise (benefit).
• Common Law vs. Equity: Distinction in how covenants are treated.

Types of Covenants

• Positive Covenants: Require active performance (e.g., mowing a lawn).
• Negative Covenants (Restrictive): Prevent actions (e.g., not building on land).

Covenants and Land

• Running with the Land: Refers to benefits or burdens passing to new landowners.
• Common Law: Generally, burdens do not pass, but benefits can.
  • Key Cases:
    • Burden: Austerberry v. Corporation of Oldham
    • Benefit: Smith and Snipes Hall Farm Ltd. v. River Douglas Catchment Board
• Equity: Allows burdens to pass under certain conditions (Tulk v. Moxhay).

Distinctions Under Equity

• Positive Covenants:
  • Burden cannot pass in common law.
  • Passes in equity only in specific cases (Halsall v. Brizell).
  • Reciprocal burdens and benefits are necessary.
• Negative Covenants:
  • Easier for burdens to pass.
  • Criteria:
    • Must concern the land.
    • Proximity must exist.
    • Requires intention to run (presumed by Law of Property Act 1925).
    • Must be registered (Land Registration Act 2002).

Transferring Benefits

• Annexation: Permanent attachment to the land.
• Assignment: Express transfer of the covenant.
• Schemes of Development: Covenants apply across a development.

Third-party Rights

• Section 56 of the Law of Property Act: Third parties can enforce covenants.
  • Key Cases:
    • Beswick v. Beswick
    • Re Ecclesiastical Commissions for England Conveyance
• Contracts (Rights of Third Parties) Act 1999: Allows third parties to enforce contracts made for their benefit.

Remedies for Breach

• Injunctions:
  • Preventative (quia timet) and mandatory types.
  • Shelfer v. City of London Electric Lighting Co. highlights when damages may be appropriate instead.
• Damages: When injunctions are too burdensome.

Discharge or Modification

• Upper Tribunal (Lands Chamber): Can discharge/modifications under certain grounds, such as obsolescence or lack of benefit.

Conclusion

• Problem-solving: Identify parties and their roles, understand the nature of the covenant, and determine the applicable legal principles.
• Practical Advice: Plan before answering problem questions; consider if the burden or benefit runs with the land and the type of covenant (positive or negative).