The problem a building scheme solves
A covenant is a promise in a deed. When a developer sells a plot, the buyer usually makes that promise to the developer and not to the neighbours.
Consider a later buyer on the same estate who wants to enforce the restrictions against a neighbour who has breached them. She never made a deal with that neighbour, so she has to show that the benefit of his promise has reached her land. In equity there are three routes: annexation (the benefit is attached to her land), assignment (it is expressly passed to her) or a building scheme.
The burden is a separate question. The burden of a restrictive covenant can bind later owners in equity under Tulk v Moxhay. A restrictive covenant is one that, in substance, restricts how the land may be used. For the burden to bind later owners, the covenant must have been made to benefit land and must have been meant to run with the burdened land. To bind a buyer it must also have been protected, by a notice on the register for registered land or by a Class D(ii) land charge for unregistered land. In unregistered land, a covenant made before 1926 binds a buyer who has notice of it. The burden of a positive covenant does not run with freehold land at all (Rhone v Stephens). If the person being sued made the promise himself, he is bound anyway as an original party.
The Elliston v Reacher conditions
The starting point is Elliston v Reacher (1908). A scheme needed four things:
- The plots were sold by a common vendor.
- Before the sales, the vendor laid out the estate, or a defined part of it, for sale in plots, subject to restrictions intended to apply to all the plots. The restrictions could vary in detail from plot to plot, but taken together they had to be consistent, and consistent only, with a general scheme of development.
- The vendor intended the restrictions to benefit all the plots being sold, and they did.
- Each buyer bought on the footing that the restrictions could be enforced by and against every other owner.
Re Dolphin's Conveyance (1970) relaxed the first two, and a scheme was found there even without a common vendor or plots laid out before sale. What the courts look for is the substance: a common interest, and a common intention (in Dolphin, set out in the conveyances themselves) that the owners can enforce the covenants against each other.
The courts still insist on a clearly defined area that all the buyers know about. In Emile Elias v Pine Groves (1993) a scheme failed partly because the buyers of three plots did not know a fifth plot was included, as the plans attached to their conveyances did not show it. The courts also insist on a shared intention that the covenants are mutually enforceable.
A worked example
Over fifteen years, a homeowner sells off parts of a large garden and paddock to five different buyers. There is no plan of plots, each buyer gives promises that differ in substance, though the plots are much alike, and nothing in the transfers says the buyers can enforce the promises against each other. One early buyer promised not to use his land for any business, and he now runs a car repair workshop from it. A later buyer wants to stop him, relying only on a building scheme.
She fails. There is no defined area laid out for a scheme, the promises differ in substance between similar plots and nothing shows an intention that the owners could enforce against each other. What she has is a series of separate sales by the same seller, and a common seller is not enough on its own.
Change the facts. Before selling, the homeowner draws up a plan dividing the land into five numbered plots and attaches the plan to every transfer. Every buyer gives the same set of promises, and every transfer says the promises are for the benefit of all five plots. The conditions are met, a scheme exists, and the later buyer can stop the workshop.
The traps SQE1 questions set
- A common seller does not create a scheme on its own.
- The promises need not be identical. They can vary in detail, but a real difference in substance between similar plots points against a scheme.
- Being a neighbour does not, on its own, give you a right to enforce a covenant made with somebody else.
- Judge a covenant by its substance, not its wording. If it can only be kept by doing something, such as spending money or doing work, it is positive, even when it is worded as a promise not to do something (for example, not to let a fence fall into disrepair). If it can be kept by doing nothing, it is restrictive.
- Check who is being sued: where the defendant made the promise himself, the burden question does not arise and the only issue is whether the claimant has the benefit.
A developer lays out a new estate of 30 numbered plots on a plan, attaches the plan to every transfer, sells every plot on the same restrictive covenants, and each transfer states that the covenants are for the benefit of all the plots. The last buyer breaches. Can the first buyer enforce against her?
Show the answer
Yes, through the building scheme. Annexation would not help: when the last buyer made her promise, the first buyer's plot no longer belonged to the developer. Under a scheme the owners can enforce against each other whatever the order of purchase.
Sources
- Elliston v Reacher [1908] 2 Ch 374
- Re Dolphin's Conveyance [1970] Ch 654
- Emile Elias & Co Ltd v Pine Groves Ltd [1993] 1 WLR 305 (PC)
- Tulk v Moxhay (1848) 2 Ph 774
- Rhone v Stephens [1994] 2 AC 310
Law as at 28 September 2026.