Enforcement of covenants affecting freehold land
Enforceability of restrictive covenants on land
In contrast, a restrictive covenant restricts the use and enjoyment of the land. These are things like easements, restrictions, notices, mortgages and covenants. For registered land covenants are either set out in the Charges Register of the Official Copies or else in a separate document held by the Land Registry, in which case that document will be referred to in the Charges Register as containing covenants. The distinction between restrictive or negative covenants and positive ones is important. This means that the title to the blue land should contain a clear statement that the blue land is subject to this restrictive covenant in favour of the green land, but the title to the green land will often make no reference to the covenant at all. What this means is that if a deed grants the owner of a property the right to, for example, use a private road but the same deed also contains a covenant to contribute toward the cost of the upkeep of the road then the owner cannot exercise the right to use the road without contributing to its upkeep. If this is coupled with a right of re-entry for non-payment this ensures the covenant to contribute should not be breached. The important question is whether the person suing will get an injunction stopping the breach ie preventing the action being taken or requiring that something be done or damages for losses caused by the breach. If a breach has continued for a long enough period without any objection being raised, it may be treated as having been abandoned under the principle of estoppel. If neither of these options are possible, an assignee or existing landowner may benefit from section 56 of the Law of Property Act , or the broader definition in section 1 of the Contract Rights of Third Parties Act , which allows an individual to enforce the covenant if they were in contemplation at the time of contracting, or were at least part of a group or class of individuals envisaged by the contract.
It is usually a pre-condition of the insurance that no one has discussed the covenants with the parties who you think have the benefit of them. If you get damages they will be based on the loss of value to your property.
This is important because many old covenants cease to have any material benefit as the nature and character of the surrounding area changes over time.
Covenant on property
For this reason, when B sells to J he will seek an indemnity from J in respect of any claim that A brings against him note that this ability to enforce against B applies to all covenants, not just positive ones. In respect of covenants, for them to be enforceable, both the benefit and burden must run in common law or both must run in equity. Indeed, the Council of Mortgage Lenders at point 5. It is curious therefore that the government have been so hesitant to reform the ever more important area of freehold covenants. Usually they are that the breach has continued for at least 12 months, the property has been used for residential purposes for the last 12 months and will continue to be so used and there is no evidence of enforcement action being taken. Unlike a standard insurance policy, the premium is payable just once and that generally provides cover, for the homeowner, his mortgage lender, successors in title of the homeowner and successive mortgage lenders for the life of the property. These four grounds are: obsolescence; consent from all relevant parties; the fact that there would be no harm caused by discharge or modification; or the covenant impedes a reasonable user of the land and there is no substantial benefit of the covenant to the benefitted owners. A restrictive covenant will generally be enforceable between the original contracting parties as a matter of contract. This can be enforced by placing a restriction on the title of the blue land preventing any registration of a sale of that land without evidence that the direct covenant has been entered into with the current owners of the blue land. When is a restrictive covenant not enforceable? Civil Procedure Rules CPR : In challenging the covenant there is also the option of court proceedings under section 8 of the CPR for declaratory relief, although most parties will go through the Lands Tribunal process. This means that if J makes use of the road, A will be able to enforce the covenant to pay half the cost of maintaining it; however, if J stops using the road, the covenant will no longer be enforceable. It follows from this that any covenant on a title that predates first registration of the property is potentially challengeable: if you can show the restrictive covenant was not properly protected by a Land Charge at the right time, the Land Registry will remove it from the title. Have all the validity tests been met? Direct covenants For more significant positive covenants, particularly in the context of large commercial properties, the owner of the benefitting land may impose a requirement that the burdened owner does not sell the land without first obtaining a direct covenant from the buyer to the owner of the benefitting land — so in our example, J will covenant directly with A to plant trees.
This can be enforced by placing a restriction on the title of the blue land preventing any registration of a sale of that land without evidence that the direct covenant has been entered into with the current owners of the blue land. Even if the transfer uses all the right words, if the covenant does not in fact benefit the adjoining land, it will not work as a restrictive covenant.
To find out how we store and process your data click here. In contrast, a restrictive covenant restricts the use and enjoyment of the land. In theory a chain of indemnity covenants can continue indefinitely however in practice it will come to an end either on the disappearance of the original covenantor or where the chain is broken by a transfer taking place that does not incorporate an indemnity covenant.
However, if any of the requirements are not fulfilled, the covenant will continue to be enforceable as against B but will not be enforceable against his successor in title.
If they are not, and even where insurance is required in respect of a contemplated future breach, then it may still be possible to obtain a bespoke policy, though the premium will generally be higher.
The proposed modification or discharge would not actually injure the beneficiary. The Tribunal may, where a covenant is modified or removed, award compensation to the beneficiary.
Enforcement of covenants affecting freehold land
When you purchase property, it is essential that you are aware of any covenants which burden that property, as they may impact on your plans: the land may come with planning permission for a six-storey office block, but this is potentially worthless if a covenant prevents building above two storeys. The Judicature Acts of the late nineteenth century basically merged the two systems but there are still some differences. Positive covenants The burden of a positive covenant does not usually run with the land. The table provides a good step-by-step approach to trying to understand the current law, but the real concern is that this exercise is completely unnecessary. Chains of covenant In the absence of an express provision the contrary, a covenant continues to bind the original parties even after the land has been sold. Authored by. In other words, the Court needs to decide what the covenantor might reasonably have paid the covenantee to secure release of the covenant and what the covenantee might have reasonably accepted. Environmental law in England and Wales, is likely to become more extensive in the coming decades especially with the ever-increasing scope of European legislation. A move towards greater registration of interests in land has been underway since the passing of the Act, and an adoption of the Law Commission proposals would clearly be a step towards a more streamlined and effective land register.
However, there are some exceptions to this rule and also some ways to get around it. Civil Procedure Rules CPR : In challenging the covenant there is also the option of court proceedings under section 8 of the CPR for declaratory relief, although most parties will go through the Lands Tribunal process.
based on 52 review