In 1999 Alfred became the owner of two adjoining registered (with absolute title) freehold properties, Blackacre and Whiteacre. In January 2005 he sold and transferred Whiteacre to Brian who covenanted with Alfred as follows:
1) that Brian, and Brian alone, would not build within 60 metres of the boundary between Whiteacre and Blackacre;
2) that Brian and his successors in title would use Whiteacre only as a private dwelling-house. This covenant was expressed to be for the benefit of Alfred’s retained land, Blackacre.
3) That Brian would maintain the fence separating Whiteacre from Blackacre.
Subsequently Alfred sold and transferred Blackacre to Patricia, and Brian sold and transferred Whiteacre to Colin.
Neither of the transfers referred to any of the above matters. Colin now wishes to build office premises within 60 metres of the boundary, and the fence is in disrepair.
Advise the parties
The first issue at hand is whether the covenants are enforceable. Alfred will always be able to enforce the covenants against Brian, but the sale of the land makes the problem more complex. We must now see whether the Burden has passed from Brian to Collin, and whether the benefit of the covenant has passed from Alfred to Patricia.
The common law is very clear that the Burden of a covenant cannot pass in the common law, which is illustrated from the case of Austerberry v Oldham Corp and later confirmed by Rhone and Stephens. This means that it will not be possible to use the common law to determine whether the benefit and the burden have passed for Patricia or Collin. Instead, we will have to use the equitable rules of passing the benefit and the burden of the covenant.
The Burden may pass in equity under the rule in Tulk v Moxhay, there are four requirements that must be met for the benefit to pass under this rule:
- The Covenant must be restrictive
- The covenant must accommodate the dominant tenement
- The original parties must have intended the burden to run
- The person against whom the covenant is made must have notice
The next issue is determining which covenants are negative and which are positive. A Positive covenant will require the landowner to do something to his land, such as keep a fence in good repair. A restrictive covenant merely reduces the amount of rights you acquire during a transfer, so you are not allowed to build on your land.
Clearly covenant 1 and 2 are restrictive covenants because they prohibit building and using the land for anything other than a private dwelling. Covenant 3 is a positive one because it requires the expenditure of money and effort to keep the fence in good repair.
The next issue is whether the covenant accommodates the dominant tenement, which has three parts to it: The original covenantee must have retained an interest in the Dominant tenement when the covenant was made, as in the case of LCC v Allen. The next part is whether the covenant touches and concerns the land, this means it must benefit the land by adding value or quality. The next part to this is proximity, the land need not be adjacent but close to the dominant tenement as in Bailey v Stephens.
In this scenario the original covenantee has retained land and transferred it to his successor in title. Alfred retained Blackacre at the time of the covenant, and it is now owned by Patricia, his successor in title. Restricting Brian from building from within 60 meters of the boundary would add value and benefit to the dominant tenement. The properties are adjoining, which means there is proximity. Restricting the use to only a private dwelling will also accommodate the dominant tenement as it prevents anything other than residential use. Keeping the fence in a good condition adds quality and value to the property. All three covenants meet the second limb test in Tulk v Moxhay.
The next issue is whether the original parties intended the burden to run. The way we can tell this is in two ways. It can be included as express wording in the covenant. The second way is under the LPA 1925 S79. This provision implies that intention exists and is deemed to be made on behalf of yourself and your successors in title, unless the contrary intention is shown.
In this scenario, it is clear that the first covenant was only ever intended to be binding on Brian. This is because it names him directly. S79 can not imply that the covenant will be binding on successors in title because the deed offers intention to the contrary, as in Morrel’s Oxford v Oxford United FC. The second covenant names both Brian and his successors in title expressly in the deed, which means that the burden of this covenant was intended to run with the land. S79 would also imply this because of the wording of the deed. The third covenant does not expressly include the successors in title of Brian. This means that S79 LPA 1925 could imply that by mentioning Brian, it will also imply that the burden is to be passed to successor in title.
The next issue is whether the person against whom the covenant is made had notice of it. This means that it needs to be registered in modern law. In unregistered land the covenant must be registered as a Class D(ii) land charge in Plymouth. S198 LPA 1925 says that registration is notice to the world, and if it is registered will be effective. S4(6) Land Charges Act 1972 says that if the covenant is not registered then the purchaser will not be bound by the land. However if they are gifted the land they will still have to honour the covenant.
If the land is registered S32 LPA 1925 requires the covenant to be registered on the charges register , which gives notice to the world. If the covenant is registered it will be effective, even if the purchaser of the land didn’t know about it. S29 LRA 2002 says that covenant is not binding against the purchaser if it has not been registered.
The first covenant will not be able to pass the Burden because it was only ever intended to bind Brian. The second covenant may pass the burden because it clearly identified that there was an intention to bind future successors in title. The third covenant cannot pass the burden because it is a positive covenant.
The next issue is whether the Benefit has passed in equity. The benefit must touch and concern the land (P&A v Swift), and be passed in one of three ways, as the case of Renals v Cowlishaw suggests:
- Annexation (Express, implied or Statutory)
- Building Scheme
Express Annexation – The language expressly intends the benefit to run. This can be done through language like for the benefit of the land know as Whiteacre. The benefit will then be attached to each and every part of the land (Wrotham Park Est Co Ltd v Parkside Homes Ltd). The wording is Renals v Cowlishaw was not enough to expressly annex the benefit to the land.
In this situation covenant 2 has been expressly annexed to the land. We can see this because the language and wording in the covenant mentions the benefit being for the retained land and successors in title. There is no doubt that the land has been expressly annexed for covenant 2. The benefit of covenant 2 has passed.
Statutory Annexation – S78 LPA 1925 as interpreted in Federation Homes Ltd v Mill Lodge Properties Ltd meant that annexation happens automatically. This wipes out the issues of wording in annexation. Since then in Roake v Chadha it was outlined that it is possible to exclude the effects if S78 LPA either expressly or impliedly. This has been approved in the case of Crest v Nicholson Residential South Ltd v McAllister. S78 only works for post 1926 covenants, as in the case of Small v Oliver Saunders Development .
In this situation Covenant 1 and 3 can potentially be annexed to the land through statutory annexation. The requirement for S78 LPA to automatically annex to the land is that the benefit must touch and concern the dominant land per the interpretation in Federation Homes v Mill. Clearly maintaining the fence and not building near the boundary adds value, quality and benefits the dominant tenement. There is also no contrary intention shown, which means the benefit will pass.
The enforceability of the covenants is as follows:
- Burden of Covenant’s 1 and 3 have not been passed in equity, which means they can only be enforced against Brian. Collin cannot have any award or action made against him for breaching these covenants.
- The burden of covenant 2 has been passed in equity which means it is enforceable against Colin.
- The benefit of the covenant’s have all been passed to Patricia, which is why she is entitled to enforce the covenants.