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Positive Covenants Overview Notes

Updated Positive Covenants Overview Notes

Land Law Notes

Land Law

Approximately 987 pages

Land Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB land law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

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Positive Covenants

The running of a burden

  • Smith: has long been clear that burden of positive covenants

    • Do not run with any land to which the covenant is attached

      • Rhones v Stephens [1994]:

        • Lord Templeman:

          • As between landlord and tenant both the burden and the benefit of a covenant pass at law with subsequent transfer

            • For everyone else, the benefit of a positive covenant may run with the land at law but not the burden.

          • Restrictive covenants can impose restrictions in favour of the covenantee and deprive the purchaser of some rights they would normally receive from being purchaser.

            • Thus, when the land then passes to another, that successor is also deprived of those rights which the original purchaser did not get

              • All Equity does is prevent said successor from enforcing the rights he never received.

    • In recent decades, number of attempts to extend the burden running which is recognised in equity re: restrictive covenants

      • To the application of positive covenants.

        • However, this has been firmly rejected:

        • Haywood v Brunswick Permanent Benefit BS [1881]:

          • Brett LJ:

            • An assignee taking land subject to a certain class of covenants is bound by such covenants if

              • he has notice of them,

              • and that the class of covenants only restrict the mode of using the land

                • but can’t enforce burdens against the land which are affirmative unless implication = negative burden effect.

Limited ways to make the burden run

  • Commonhold

    • The use of “commonhold”, a form of ownership, can lead to the burden of positive covenants running with the land

      • But commonhold is only suitable for certain types of situations so is not always a way of getting round this restriction.

  • Leasehold covenants

    • Leasehold covenants permit both positive and negative covenants to run

      • Any assignee of the Landlord or the tenants will be bound by the covenants

      • For practical purposes, the use of a long lease will be as sufficient as if it were a fee simple (e.g. for a block of flats where covenants running = necessary)

    • However, number of disadvantages

      • Enable Landlord to enforce covenants, but nobody else can do so

        • Lessees of one flat, for instance, won’t be able to enforce covenants against other lessees in different flat.

      • Means that covenants less flexible – even if you have land benefitted by the covenants you may still not be able to enforce them

  • Chain of Covenants

    • Where covenant relates to the land

      • Will normally provide that covenantor will be liable if he sells the land and purchaser fails to comply with the covenant

    • So covenantor will require purchaser to comply with covenant to avoid attracting liability to covenantor himself

      • And if purchaser does not comply, the covenantee will sue the covenantor who will in turn sue the purchaser

        • Purchaser, when later selling land, will then require next purchaser to comply

        • Thus, positive covenant burden continues

      • Problem = chain is liable to be broken

        • If Covenantee or intermediate purchaser disappears or dies

          • Then chain fails to impose liability of the current owner, meaning current owner not bound to comply.

      • Problem = convoluted route of liability owing to Privity rules

        • C must sue X who must sue Y....

        • Although Contract (Rights of Third Parties) Act 1999 may help here.

  • Require Covenantee’s consent before sale by covenantor

    • This enables the covenantee to require the purchaser to take a fresh and direct obligation

      • As a condition for the covenantee’s consent to the purchase

        • In registered land, sale in breach of the requirements will lead to the sale being prevented by an entry of restriction

    • Process is very slow and cumbersome though

    • And doesn’t work for unregistered land

  • Benefit and burden

    • May be possible to bind a purchaser where covenant is the counter part of rights being enjoyed by purchaser

      • Rhones v Stephens [1994]: X separated two houses, covenanted for all successors to keep roof in good repair. Both houses transferred, and roof fell in from rain damage. Y tried to enforce covenant against X’s successor in title.

      • Lord Templeman:

        • Equity can’t force someone to do something which they never promised to do

          • Otherwise this would contradict the rule that X can only be liable on a contract if he was a party to it.

        • Thus positive covenants are only enforceable against the user who agreed to them

          • Not his successor in title.

            • Unless X receives a benefit which comes with a burden relevant to the exercise of that right.

      • Thamesmead Town Ltd v Allotey [1998]: X bought house...

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