Freehold covenants are too easy to impose upon land and too difficult to remove - Essay Example

? Freehold covenants are too easy to impose upon land and too difficult to remove from it- An Analysis Introduction A covenant is an assurance or promise declared through a contract or a deed. A covenant in respect of a land may be of negative in nature where a party makes a promise not to do some action, or it may be a positive covenant where a party promise to other parties to do something. The law pertaining covenants entered between freeholders which is known as freehold covenants symbolises the manner in which one landowner may impact or control the use of adjoining or neighbouring land. A freehold covenant has both an advantage and an onus in respect of two estates in land owned by different individuals. Thus, covenants symbolise another form of proprietary duty, despite one that obliges its origin to the curative authority of courts of equity. (Dixon 2011:313). A freehold covenant may be explained as promises made through a deed (covenants) between freeholders where one contracting party guarantees to carry out or not to do some actions on the land owned by them for the advantage of adjoining land. For instance, owner of property A promises to the owner of property B not to do some kind of business or trade on his (A’s) land or where the owner of a property X promises to owner of property Y not to construct a wall over above a certain height or without getting approval from the owner of the property Y. The landowner who makes a promise on behalf of his land is known as covenantor (where the onus lies) and the property owner to whom such promise is made is known as covenantee and his land is where the benefit lies. In most of the cases, covenants between freeholders are negative or restrictive in nature, which prevents the owner of the land to do certain things in his own land. (Dixon 2011:313). The land with an advantage under a freehold covenant is known as dominant land where the land with the disadvantage is identified as the servient land. (Holmes 2005:157). Analysis Privity of Contract In a land deal, there will be a contract between the original parties (buyer & seller) and these original parties to the contract under the common law principle of privity of contract, the party with a benefit can be able to implement the promise or covenant against the party with the burden. In case of a land contract deal, the subject matter is not rest with the original parties to the contract whereas in the majority of the other contract deals, the subject matter rests with the original contracting parties. In land contracts, there is every possibility of passing the property to their legal heirs or successors either by gift or by inheritance or by sale. (Morris 1999:6). Under the privity of contract principle, the burden associated with a land cannot be passed on whereas a benefit attached to it can be passed on to the successor. Hence, the successor to the owner of a land with a burden cannot be compelled to enforce the covenant by the successor to the owner of the land with the benefit covenants attached to it. (Morris 1999:6). In conveyancing a freehold land or property which has a positive covenant which demands the buyer to maintain the land or premises by carrying out repair as and when necessary, which can be only implemented by “privity of contract between the original buyer and the seller.” Once the property is disposed off, the vendor who insisted with a covenant may not be interested in such property’s covenants. There will be no virtual advantage or incentive to implement the covenant just to help those still residing in the adjoining areas. Even if the seller remains there and if the buyer disposes the land to a third party, then” no privity of contract will be existing between the new buyer and the original vendor.” Further, under the principle of privity of estate, as pertinent to promises or covenants included in transfer of freehold land or property, the burden will not pass on to the buyer, and it would not be probable to enforce the promise against the new purchaser directly. (Morris 1999:6). In such cases, the seller would have to implement the promise against the original purchaser and afterwards, any successors to title if any, by way of indemnity, which will have to be implemented as a promise against the new buyer. As a result, the repairs to the property or land may not be carried on as specific performance cannot be obtained, and it is possible only to claim damages and hence the adjoining neighbours to the land or property will have to prolong to suffer from the disrepair. Due to this difficulty , banks and building societies in UK are not coming forward to offer secured loans on freehold flats .( Morris 1999 :6). In Purchase v Lichfield Brewery (1915), it was held that there was no liability to perform any of the original tenant’s promises by an equitable assignee of the lease, including the commitment to pay rent. This is the mixed impact of the rule that no privity presents between tenant and landlord under equitable assignment of a legal lease and hence, there would not automatic passing of the leasehold covenants thereby impacting the explicit inter parties transfer of leasehold commitments. (Dixon 2011:214). Tulk v Moxhay This case dealt with whether a restrictive covenant ,if consented by the purchaser of land as a part and parcel of the contract of the sale of land and will it bind the buyer of the same land later. In this case, Tulk, the plaintiff who was the title-holder of many plots of land, sold the garden which located in the centre of the many plots of land to Elms, who consented not to construct any building on it but conserve it in its present condition. Moxhay, the defendant became the owner of that garden after many numbers of conveyances and started to construct a building despite knowing the existing covenant over the garden. After exhausting to avail remedy of recovery of damages under common law as he was not a party to the contract, the plaintiff prayed for an injunction to stop the construction activities on the garden. The court granted the injunction as it was inequitable to allow the erection of building as there existed a covenant. Positive Covenants There are four main elements to be present in a positive covenant, and they are as follows: The promises or covenants must “touch and concern” the specific land and it should not be merely personal. The parties to the contract should have aimed that the advantage to run with the property or land for ever. This will normally be assumed by virtue of s 78 of the Law of Property Act, 1925. The legal estate in the land must be hold by the covenantee and there is no necessity to own the land by a covenantor as decided in the Prior’s case in 1368. A covenantee assignee must also hold a legal estate in the said property or land, and it is not necessarily to have the analogues’ legal estate as held in “Smith and Snipes Hall Farm v River Douglas Catchment Board “in 1949. (Cavendish 2004:90). Positive Covenants as decided in Re Ecclesiastical Commissioners for England's Conveyance1 In this case, the plaintiff transferred a land and a house in 1887 to one HG Grotto. HGG promised on behalf other assigns and for himself and for all future tenants and owners of the land so that the promise would run and would bind the each and every parcel of the said land and to comply with some qualified covenants. A separate covenant was made for the owners of the neighbouring or adjacent land to observe some restrictive covenants on the said land. The main issue in this case was that whether adjoining land owners were authorised to implement the covenants despite, they were not a party to such conveyance, and it was held that they were entitled to do so. (Goo2002:674). For instance, if A is able to implement the covenant against B since there is a privity of contract between A & B. Nonetheless, if B has made a covenant for the advantage of B, his descendants in title and also the occupiers and owners of adjacent land as the owners of the neighbouring land may derive advantage from the covenant since the covenant has been made for their advantage as held in White v Bijou Mansions Ltd2. (Cavendish 2004:90). In normal parlance, it is the party who has obtained a benefit will be the individual who has actually kicked off the contractual arrangement, since it is this party who desires to have the restrictive covenant. The common law will not insist to implement the burden of a covenant against the legal heir or successor in title to the covenantor where even if the legal heir or successor is aware of the fact existence of the covenant. This has been laid down in the famous case Austerberry v Oldham Corp3 . (Hepburn 2001:271). However, in Halsall v Brizell4 , it was decided that a party who promises to offer the maintenance expenses of a service like construction of water pipe or a road, is committed by that promise if he enjoys some advantages from the offering of such services. (Cooke 2003:272). In Tito v Waddell, 5 it was held that commitment to bear the expense in return for enjoying the advantage is an “inherent part” of the benefits enjoyed by the legal heir or successor in title and it has been named as the “advantages on a conditional basis.” If the instrument contains more commitment for the benefits to be enjoyed, then such instrument will always a conditional right. For instance, if an easement is established that advantages are part and parcel of that land and the buyer of such land who bought with benefits, as per the conditions of the instrument establishing such an easement, has promised to pay the cost of repairs or maintenance of such easement, then a legal heir or successor in title of such property who enjoys such an easement should also pay to its maintenance expenses as per the conditions laid down in the instrument. This was also held in ER Ives Investment Ltd v High and also in Rufa Pty Ltd v Cross. (Moore 2005:205). Restrictive Covenants In Formby v Barker, it was held that equity would implement a restrictive promise (covenant) against an assignee of the encumbered property only if such condition has been enforced for the safeguarding the other land owned by the covenantee. Thus, there should be both servient and dominant tenement; the conditions should “touch and concern “the main dwelling which could be disadvantageous to the delectation or value of the chief tenement. (Kodilinye: 144). In Mander V Falcke, the lessor was given an assurance by the lessee that he would not use the said property for any usage that would cause disturbance or annoyance to the neighbouring property held by the lessor. However, sub-leasee ran a bar and brothel house which had become a nuisance to the plaintiff. The plaintiff prayed for an injunction, and he succeeded in getting such an injunction. The very fact of occupancy by the sub-leasee was adequate to facilitate the condition to be implemented against the defendant through an injunction. (Kodilinye 2000: 144). There exist two types of covenants in equity which establish whether or not an advantage or encumbrance of covenant can be passed on the buyer of a property or the land. A restrictive promise or covenant is one where the buyer of a land is required under the law not to do certain actions on the property or land against a third party who may later purchase that land to the land owner or seller , and for instance , a covenant like there should not be blocking of the drain. Thus, in a restrictive covenant, the advantage derived out of a promise which is the promisee’s privilege to sue the promiser which may be relegated onto the buyer of the property or land later. The burden in case of a restrictive covenant, the proof, i.e. the onus on the promissor to be sued is also legitimate. This is mainly due to a stipulation in equity that to implement the onus of a covenant, it should not be of positive nature but should be negative nature where there is a necessity to incur some expenses like repairing or maintenance. It is to be observed that under s78 of the Law of Property Act 1925, it is not required to state specifically that the covenant is for the advantage of the first covenantee and his legal heirs or successors as this is implied if there exists no specific wording to the converse. In Roake v Chadha6, it was held that the advantage annexed with a promise or covenant attached to a property or a land is automatically attached to the whole of the land unless if there is any contrary objective and will be passing on with each portion of the land that sold away separately. A court may refuse to intervene where it feels that it will be inequitable to order so. In Gaskin v Balls , despite having restrictive covenants , the plaintiff was aware of the infringement for a period of more than five years, and he never took any action against such infringement.( Moore 2005:214). Conclusion In Tulk v Moxhay case corroborate that that freehold covenants are too easy to impose upon land and too difficult to remove from it as Maxhay’s (a buyer in later years) efforts to construct a building in the land (with restrictive covenant) where garden is situated as the court granted the injunction as it was inequitable to allow the erection of building as there existed a covenant. Further, in case of positive covenants, the parties to the contract should have aimed that the advantage to run with the property or land for ever. In Re Ecclesiastical Commissioners for England's Conveyance7 the main issue in this case was that whether adjoining land owners were authorised to implement the covenants despite, they were not a party to such conveyance, and it was held that they were entitled to do so. In Halsall v Brizell8 , it was decided is committed by a promise he has made if he enjoys some advantages from the offering of such services. In Tito v Waddell,9 it was held that if the instrument contains more commitment for the benefits to be enjoyed, then such instrument will always a conditional right. In a restrictive covenant, the advantage derived out of a promise which is the promisee’s privilege to sue the promiser which may be relegated onto the buyer of the property or land later. In Roake v Chadha10, it was held that the advantage annexed with a promise or covenant attached to a property or a land is automatically attached to the whole of the land unless if there is any contrary objective and will be passing on with each portion of the land that sold away separately. I view of the above, I agree with the argument that freehold covenants are too easy to impose upon land and too difficult to remove from it \ List of References Cavendish. (2004). Cavendish: Land Lawcards 4/e. London: Routledge & Taylor Francis. Cooke, E. (2003). Property 2002. London: Hart Publishing. Dixon, M. (2011). Modern Land Law. London: Taylor & Francis. Goo S.H. (2002). Sourcebook on Land Law. Routledge Taylor & Francis Group. Hepburn, S J. (2001). Principles of Property Law. London: Routledge Taylor & Francis Group. Holmes, Oliver W. (2005). The Common Law. London: Digi Reads. Kodilinye, G. (2000). Commonwealth Caribbean Property Law. London: Routledge Francis & Taylors Group. Moore G. (2005). Essential Real Property. London: Routledge Francis & Taylors Group. Morris J R. (1999). Principles of Landlord and Tenant Law. London: Routledge Francis & Taylors Group. Read More