User:RichsLaw/Covenants in English law

Covenants in English law represent a device by which one land owner can enforce a private promise against another.

At common law
The burden of a covenant cannot be passed at common law; as a general rule of contract only parties privy to an agreement can be obligated to act upon the burdens imposed by others. The benefit of a covenant can pass where an individual sells land covenanted against by another, continuous owner. This is subject to the rules created by the case of Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board. Firstly, the subject of the covenant must affect the actual land or do so by affecting the value of the land. Secondly, the successive legal owner must have a legal estate in the land – though it does not necessarily have to mirror that of the previous owner. Thirdly, the land to be benefitted must be reasonably identifiable. Lastly, it must be the intention of the parties that the covenant should run with the land.

At equity
Equity takes a more liberal approach to the passing of covenants, with the case of Tulk v Moxhay creating guidelines for where the burden – and benefit – of covenants can pass to successors in title. This is distinguishable from the common law approach in that covenants can pass even where both parties to an agreement have changed.

In order to pass the burden of a covenant, it must be restrictive in nature and not impose a positive obligation upon a party, which would result in expenditure or positive acts being necessary. For example, the building or upkeep of any special fixtures on a property could not pass to a successive owner, as confirmed most recently in Rhone v Stephens. There are several requirements in order for a burden to be properly passed. First, there must be a dominant tenement to be benefited by a covenant, as shown in Formby v Barker. Here, the estate of an individual selling off all of his land could not enforce covenants against the subsequent land owners, where no dominant patch of land was retained. Secondly, the land retained must actually benefit from a covenant. Lastly, there must be intention for a covenant to run with the land. Section 79 of the Law of Property Act 1925 automatically infers such an intention, meaning that unless an express contrary intention is stated, a covenant is deemed to pass with land.

The benefit of covenants must be passed in equity if the burden too is passed in such a way. The methods by which this can be done were set out by Sir Charles Hall V-C, in Renals v Cowlishaw. It may run through annexation, assignment, or a scheme of development. Annexation is the attachment of a benefit to a piece of land, prima facie granting it to any successor in title. The old law was unnecessarily complex with regard to annexation, with it being necessary to examine the precise wording of a covenant in order to see if it annexed to land. In addition, a benefit was annexed to a piece of land as a whole, or not at all. The requirement that a covenant must ‘concern or touch’ land meant that the courts were not willing to sever the benefit for part of a plot of land in a conveyance. The complexity of annexing benefits to land was effectively removed by the case of Federated Homes v Mill Lodge Properties Ltd, where it was held that Section 78 of the Law of Property Act 1925 had the effect of annexing the benefits of covenants to land, a decision which was not uncontroversial. However, it can be defended on the grounds that common law would automatically pass the benefit of covenants. An early concern was that Section 78 is not subject to a contrary intention, and thus the benefit of a covenant may pass whatever the intention of the parties. However, this was disproved in Roake v Chadha, where the benefit of a covenant was subject to express assignment, and failed to pass automatically.