Covenants: Overview

[Flash Card 1 of 3]

• covenant: promise contained in a deed / contract except consideration not essential / privity of contract : only parties to contract may sue or be sued / adapted
• restrictive covenant : building (buyer covenant not to erect any building) / general use (buyer not do anything amounts to nuisance) / specific use (buyer only use as flower garden) / type of building (buyer not build above certain height) / siting of building (buyer not build within certain distance of land or particular direction)
• positive covenants : buyer must erect fence along common boundary & maintain afterwards / contribute to shared drainage costs of cleaning, maintenance, repair & renewal
• covenantor : landowner making promise (land burdened by promise) / covenantee : landowner promise is made to (land benefitting from promise)

Enforcement: original parties

• original covenantee / enforce positive or restrictive / against original covenantor: privity of contract / if damages or injunction

Enforcement successors in title

• leasehold covenants: positive & negative / enforceable against successor in title
• freehold covenants: more complex freehold / difference in equity & common law

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Covenants: Overview

[Flash Card 2 of 3]

Common law: benefit of covenant

• benefit covenant / successor in title of original covenantee / may run with land / positive or restrictive
• LPA 1925 s.78 : covenant relating to land of covenantee / deemed made with covenantee & his successors in title / annexed to land
• common law: benefit passes if 3 requirements satisfied / covenant touch & concern land covenantee / original covenantee & person seeking enforce legal estate / parties intend benefit run with land
• touch & concern: affect mode of occupation or by itself value of land / legal estate under s.78 LPA 1925 / not necessary same (freehold or leasehold) Smith & Snipes Hall Farm v River Douglas Board
• express annexation : on creation original parties / expressly attach benefit to land / statutory annexation : intention to attach benefit to land implied s.78 LPA 1925
• if no intention benefit may still pass: if covenantee transferred property to new owner with benefit of covenants / covenant: a thing in action / assignment effective if complies with s.136 LPA 1925

Common law: burden of covenant

• burden covenant / successor in title of original covenantor / not run with land Rhone v Stephens
• A (covenantee) covenant with B (covenantor) / B sells burdened land to C / C breaches covenant / A can only enforce against B / when B sells land: can require C enter indemnity covenant / if A enforces covenant against B can sue C (using chain of indemnity ) / no break in chain
• principle of mutual benefit & burden: exception to burden of covenant not running / if take benefit cannot avoid burden Halsall v Brizell / narrow: not if covenantor can choose accept benefit & burden or reject benefit (being released from burden) Rhone v Stephens / no burden if not use benefit Thamesmead Town v Allotey
• general rule: burden not run with land of covenantor / unless limited exception / or chain of indemnity

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Covenants: Overview

[Flash Card 3 of 3]

Equity: benefit of covenant

• equity like common law / covenant touch & concern / may pass by annexation or assignment
• s.78 LPA 1925 benefit of covenant annexed to every part land / unless contrary intention expressed Federated Homes v Mill Lodge Properties / limited: land intended benefit / must be mentioned or defined in document creating covenant / not identified merely from extraneous facts Crest Nicholson Residential v McAllister / express annexation preferable
• assignment / express wording can require assignment & exclude s.78 LPA 1925 Roake v Chadha

Equity: burden of covenant

• burden of covenant / successor in title of original covenantor / not run at law / restrictive covenant run in equity if buyer full knowledge Tulk v Moxhay
• positive covenant: if not run at law / not run in equity Austerberry v Oldham / reasoning: enforcing positive covenant compel successor perform contract not party / whereas restrictive prevents person exercising right they never acquired Rhone v Stephens

Breach of covenant

• injunction principle remedy / must be sought quickly / or D equitable defence of laches, acquiescence or estoppel
• grant / court's discretion / if damages in lieu of injunction / assess figure could have obtained as quid pro quo for release of covenant Wrotham Park Estate v Parkside Homes
• covenantor may seek from covenantee / express release covenant / by deed / LPA 1925 s.84 : covenantor can apply court for order discharging or modifying covenant

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