COMMON LAW
▪ General rule: Burden does NOT pass to successor (Austerberry v Oldham corporation
1885)
▪ The effect of the rule is that the LIABILITY of the covenant remains with the original
COVENTOR.
▪ Primarily applied to positive covenants
CONTINUING LIABILTIY OF ORIGINAL COVENTOR
▪ At common law, a successor covenantor cannot be sued.
▪ However, the burden doesn’t disappear, it remains with the original covenantor.
(continuing liability of the original covenantor)
▪ The original covenantor can be sued for breach by their successors.
▪ Usually this is in the wording of the deed, but if not, it is applied in LPA 1925 s 79(1)
▪ Only remedy available is DAMAGES.
▪ As part of the sale process, the original covenantor should require its successor to
enter into an indemnity covenant – promising to comply with covenant and
indemnify for any loss incurred as a result of breach.
▪ An indemnity covenant must be sought every time burdened property is sold.
▪ There must be a CHAIN of indemnity – then each person in chain as a direct
enforcement method.
▪ Must be complete chain for it to work
▪ Chain of indemnity is only as strong as its weakest link.
LIMITED EXEPTION TO THE RULE THAT THE BURDEN DOESN’T PASS – THE DOCTRINE OF
MUTUAL BENEFIT AND BURDEN. (RULE IN HALSALL V BRIZELL)
▪ Enables the burden of a covenant to pass to a successor at common law – where th
covenantee grants to the covenantor a benefit in the nature of an easement and
imposes a connected burden.
▪ Original covenantee grants a right to park on covenantee’s land. In same transfer
deed – the covenantor covenants to contribute to the cost of maintaining the
parking area it has a right to use. BENEFIT – right to park | BURDEN – contribute
towards maintenance
3 RULES:
1. Clear link between burden and benefit.
(no general rule that someone who takes a benefit under a deed must submit to
any burden which it imposes) Thamesmead town v Allotey
2. Must be genuine choice as to whether or not to take the benefit. (cannot be
theoretical – if no real choice to take benefit, then normal common law rules
apply and successor doesn’t take the burden) Davies v Jones 2009
3. Benefit and burden must have been conferred in the same transaction
▪ General rule: Burden does NOT pass to successor (Austerberry v Oldham corporation
1885)
▪ The effect of the rule is that the LIABILITY of the covenant remains with the original
COVENTOR.
▪ Primarily applied to positive covenants
CONTINUING LIABILTIY OF ORIGINAL COVENTOR
▪ At common law, a successor covenantor cannot be sued.
▪ However, the burden doesn’t disappear, it remains with the original covenantor.
(continuing liability of the original covenantor)
▪ The original covenantor can be sued for breach by their successors.
▪ Usually this is in the wording of the deed, but if not, it is applied in LPA 1925 s 79(1)
▪ Only remedy available is DAMAGES.
▪ As part of the sale process, the original covenantor should require its successor to
enter into an indemnity covenant – promising to comply with covenant and
indemnify for any loss incurred as a result of breach.
▪ An indemnity covenant must be sought every time burdened property is sold.
▪ There must be a CHAIN of indemnity – then each person in chain as a direct
enforcement method.
▪ Must be complete chain for it to work
▪ Chain of indemnity is only as strong as its weakest link.
LIMITED EXEPTION TO THE RULE THAT THE BURDEN DOESN’T PASS – THE DOCTRINE OF
MUTUAL BENEFIT AND BURDEN. (RULE IN HALSALL V BRIZELL)
▪ Enables the burden of a covenant to pass to a successor at common law – where th
covenantee grants to the covenantor a benefit in the nature of an easement and
imposes a connected burden.
▪ Original covenantee grants a right to park on covenantee’s land. In same transfer
deed – the covenantor covenants to contribute to the cost of maintaining the
parking area it has a right to use. BENEFIT – right to park | BURDEN – contribute
towards maintenance
3 RULES:
1. Clear link between burden and benefit.
(no general rule that someone who takes a benefit under a deed must submit to
any burden which it imposes) Thamesmead town v Allotey
2. Must be genuine choice as to whether or not to take the benefit. (cannot be
theoretical – if no real choice to take benefit, then normal common law rules
apply and successor doesn’t take the burden) Davies v Jones 2009
3. Benefit and burden must have been conferred in the same transaction
