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COVENANTS Problem Framework (i) Has the benefit run to C in law or equity (ii) Has the burden pass to D in law or equity
Nature of Covenants
? May be an important source of private planning law b/c can be used to preserve the character of neighbourhood by preventing activity contrary to status quo (e.g. no trade) or limiting the impact of development
? Particular importance in large scale developments where a web of interlocking covenants may be used for benefit of all future Ps of land within development
? B/c may be able to run w/land, obligation may assume permanence which endures irrespective of change of ownership of burden & benefited land
? Covenants = promises made by deed ? binding & enforceable as a matter of contract law b/w parties, irrespective of consideration. Now regarded as equitable proprietary interests in land as well o Tulk v Moxhay - covenant not to build on open land in Leicester Sq. enforced against D who wasn't the original covenantor but a purchaser.
? Key difference b/w law & equity (i) Claim in law against covenantor = damages for breach of contract (ii) Equity = greater range of potential Ds + discretionary measures i) Positive covenant - decree of specific performance ii) Restrictive covenant - injunction
= C may choose to sue in equity b/c he isn't suing the original covenantor or b/c doesn't want mere damages ? registered & unregistered land principles come into operation.
Summary (1) Benefit
? Positive & restrictive covenants - can run in law & equity (2) Burden
? Positive covenants - can never run
? Restrictive covenants - can run only in equity (3) Typical dispute involves these claims: (i) Benefit has passed in equity (ii) Covenant is restrictive (iii) Burden has passed in equity
= Key: there must be duality of burden & benefit = burden & benefit passed in equity or in law. B/c burden of positive covenants can't run at all, C must sue original covenantor on contract in damages if he's to have any remedy at all or use one of the alternatives (below)
Creation (1) Ways to create (i) Intentional conferral as part of a transfer of land (most common)
? E.g. A transfers part of it to B, retaining the other part for himself (ii) Ad hoc - as between neighbours (iii) Proprietary estoppel(not prescription) (2) Formalities (i) Creation by intentional conferral must be in writing (s53 (1)(a)LPA 1925) (ii) Transfer must be by deed (s52 LPA 1925) (iii) If not made in the course of transfer, only writing's required
1.1. Leasehold Covenant
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