Freehold covenants

LL.06 Freehold Covenants

A covenant is a promise in a deed. The hard question is enforcement after the original parties have sold on. Always identify the burdened land (servient) and benefited land (dominant), then run separate tests for benefit and burden.

Between the original parties

Always enforceable as a matter of contract, even after they part with the land.

Passing the BURDEN (the key issue)

At law: the burden of a covenant does not run with freehold land (Austerberry v Oldham Corporation (1885); confirmed Rhone v Stephens [1994] HL). A successor to the burdened land is not bound at law.

In equity — only the burden of restrictive (negative) covenants runs, under Tulk v Moxhay (1848). All four conditions must be met:

1. The covenant is negative in substance (the "hand in pocket" test — does compliance cost money? If yes, it's positive).
2. It was made to benefit identifiable dominant land. Ordinarily that land must have belonged to the covenantee when the covenant was made. Building-scheme exception: where a valid scheme establishes reciprocal restrictions for plots within a defined area, known and accepted by the purchasers on that reciprocal footing, plot owners can enforce against one another regardless of the order of purchase; enforcement does not depend on the developer still retaining land (Elliston v Reacher [1908]; Small v Oliver & Saunders (Developments) Ltd [2006] EWHC 1293 (Ch), [27], [31]-[35]). Similar restrictions on neighbouring plots alone do not establish a scheme (Small, [45]-[47]).
3. It was intended to run with the servient land (presumed by LPA 1925 s.79 unless excluded).
4. Notice / registration: registered land — protect by a notice on the charges register (LRA 2002); unregistered land — a Class D(ii) land charge (LCA 1972).

Positive covenants never bind successors directly. Workarounds: chain of indemnity covenants; mutual benefit and burden (Halsall v Brizell [1957], confined by Rhone v Stephens — must be a genuine link and a real choice to take the benefit); estate rentcharge; or a leasehold/commonhold structure.

Passing the BENEFIT

At law: annexation (touch and concern + intent, presumed by LPA 1925 s.78), assignment, or the covenantee's successor relies on s.78. In equity: annexation (statutory under s.78 — Federated Homes v Mill Lodge [1980]; express; or to part), assignment, or a building scheme (Elliston v Reacher [1908]; Re Dolphin's Conveyance [1970]) giving mutual enforceability between plot-owners.

Common traps

• Burden runs only in equity, only if negative. A positive covenant (e.g. repair, pay, maintain a fence) never binds a successor directly.
• Don't confuse s.78 (benefit) with s.79 (burden) — s.79 only signals intent, it doesn't make the burden run at law.
• Identify the benefited land and the route of enforcement. Under a valid building scheme, the plots have reciprocal benefit and burden; the developer having sold all its land does not itself defeat enforcement between plot owners.
• Notice/registration is essential for the burden in equity; an unprotected restrictive covenant is void against a purchaser.
• Discharge/modification: apply to the Upper Tribunal (Lands Chamber) under LPA 1925 s.84.

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