Advice Parties to Involves Land Law - Essay Example

? LAND LAW 07 February LAND LAW Law is a set of rules in a jurisdiction that governs people’s behavior. It defines rightsand obligations of individuals and provides outlines for dealing with disobedience to its provisions. There are a number of classifications of law, one of which is the classification by subject. The law of land is a branch of law that regulates dealings related to land. Land is defined as a physical portion of the earth’s surface and resources that are found above and bellow the surface. The definition of land also extends to rights that are associated with land. This paper seeks to advice parties to a case that involves land law. The paper will explore related legal issues that are associated with the case with the aim of offering an informed legal advice to the parties to the case. Facts of the case Connor, a landowner decided to sell off part of his land in order to ease his financial strains. He intended to use the income for developing the remaining parts of his land. He sold his farmhouse to Jane on terms that the firm house shall be used as a residential facility for a single family. Similarly, he sold part of the farm to Bullhorn Company on terms that any subsequent owner of the sold part shall develop and maintain a fence, the sold portion shall not be used for more than twelve dwelling houses, and that the property shall strictly be used for residential purposes. Bullhorn developed twelve independent residential units and sold then to different parties on the terms that the owners shall strictly use the property for residential purposes and shall pay a vendor some maintenance fees for upkeep of the roadway. Jane also sold her property to Oscar who has since established a business enterprise within the property. Alex, one of the buyers from Bullhorn has also been using his house as a bail hostel, a commercial initiative. As a result, other house owners have expressed their dissatisfaction and have refused to maintain their fences as well as payments for road upkeep. Legal issues Covenants Covenants are obligations that are derived from agreements between two landowners. While one party incurs obligations, the other party consequently derives a benefit to the covenant. The common objectives for making covenants include restrictions to the use of the pieces of land or prescription of outline to a development plan. A covenant may for instance control the manner in which a person can use his or her piece of land or even the status of the landowner. Though the general rule imposes rights and liabilities on the original parties to a covenant, there are provisions that covenants may be enforceable over subsequent landowners. Such subsequent enforceability must have however been intended by the original covenant. Further, the subsequent landowners to be bound by a covenant must have been notified of such status. Enforceability of covenants is determined from two perspectives, enforcing the covenant by law or enforcement by equity. In enforcing the covenant at law, benefit and burden are key factors. Covenants under law: benefits A covenant can be recognized only if there is a direct benefit on the land to which it is made. One of the fundamentals of the principle of benefit is that the covenant must ‘touch and concern the land’. This means that the created obligations must have the capacity to affect the rights of the landowner over usage and occupation. This was for instance held in the case of Smith and Snipes Hall Farm Ltd –v- River Douglas Catchment Board [1949] 2 KB 2000.1 Benefits from covenants can further be derived if the claimant has rights in the estate at the time. This implies that enforceability depends on the proprietary status of the claimant at the time of making the claim. A party to a covenant who has transferred his rights over the estate may therefore not be able to seek legal actions over the covenant.2 In cases where titles have been transferred from the original parties to a covenant, the assignee obtains rights from the assignor. This means that the legal rights of subsequent owners of land are transferred from the rights that were created by the covenant to the original parties. Another important aspect of enforceability of a covenant by a subsequent landowner is the intention of the original parties to extend the terms of the covenant to successive owners. This is particularly provided for in the Law of Property Act 1925 s78(1).3 Burden Like benefits, burden is only laid on a party that is part of a contract. This is the general rule for enforcing covenant, on freehold land, at law. There are however a number of exemptions that are applicable to this general rule as was established in the case of Austerberry –v- Corporation of Oldham (1885) 29 Ch D 750.4 Exemptions of the rule include cases of enlarged leases, indemnity covenants and cases of mutual benefits in estate.5 Covenants under equity Enforceability of a covenant can be made under any of the following three approaches, “assignment, annexation and by scheme of development”.6 Under transfer of rights to a covenant by assignment, the covenant must have aimed at protecting an interest in the piece of land, the rights over the covenant must have been transferred alongside the transfer of rights to land and the assignee must have been determinable. These were ascertained in the case of Miles –v Easter [1933] Ch 611.7 Subsequent rights over covenants can also be obtained from annexation, which can be express or implied. Provided for by the Law of Property Act 1925, s78 and interpreted in cases such as Federated Homes Ltd –v- Mill Lodge Properties Ltd [1980] 1 WLR 5948 and Roake –v- Chadha [1984] 1 WLR 409, rights to covenants are transferred to subsequent owners unless expressly stated by terms of individual covenants.10 Scheme of development is another way in which rights to covenants can be acquired. Under this approach, a covenant between a developer and purchasers of part of the development binds co purchasers among themselves. A co owner can therefore enforce covenants that were made between the seller and each of the individual buyers. For the principle of the building scheme to apply, the co owners must have had a common seller with the covenant made between the seller and each of the buyers before the sales, and the buyers must have been informed of the covenants as was established in the case of Reid –v- Bickerstaff [1909] 2 Ch 305.11 Further, equity binds subsequent landowners to covenants that their predecessors entered into provided that the new owner is informed of the covenant prior to contracting for ownership of the land.12 Privity of a contract Covenants, being legal agreements, can also be interpreted alongside the doctrine of pritity of contracts and its exemptions. The principle of privity of a contract states that only parties to a contract can benefit from the contract. The principle prohibits parties that were originally not part of a contract from making claims to a contract. Consequently, a third party to a contract cannot institute a legal claim based on the terms to the contract. The law of privity of a contract however exempts cases in which third parties can make claims to a contract such as in cases of agency.13 Advice to the parties Advice to Connor As the primary seller who maintains adjacent portion of land, Connor has an interest in the covenants that regard the pieces of land. Though common law together with the doctrine of privity of contracts restricts Connor’s rights over subsequent land owners, equity grants him rights to enforce the covenant, that was made between him and both Jane and Bullhorn, on the current owners. Connor therefore, under equity, has a chance of winning cases against Philips, Alex and the other tenants for contravening the initial covenants over their obligations in the pieces of land. Advice to Bullhorn Bullhorn can win cases against Alex and the other tenants for their failure to honor the terms of the covenants that were mad prior to sale of property for usage and maintenance of property. The chances are high because both law and equity define the rights. The tenants The tenants, under the equitable doctrine of ‘building scheme’ have ground to institute legal actions against Alex. This does not however give them the right to breach the terms of the covenant that they made with the seller. Their actions induce liability due to the covenant to maintain fence and roadway. Advice to Oscar While common law does not impose liability on Oscar over the original covenant between Jane and Connor, equity does. Further, successive landowners are bound under statutory annexation, by any covenant that exists over rights to their pieces of land. Oscar is therefore liable to both Connor and Jane for breach of the original covenant. Advice to Alex Alex is liable to Connor and the other tenants for equitable breach of the covenant between Bullhorn. He is liable to Bullhorn under equity, common law and the law property act. Advice to Jane Jane has an infringed right over Oscar’s breach of terms of a covenant that existed on the land prior to their sale. Biography Dixon, M. Modern Land Law. (7th Ed, Taylor & Francis, New York, 2011) Routledge. Land Lawcards 2010-2011. (7th Ed, Taylor & Francis, New York, 2010) Read More