Covenants
1. Covenants:
Covenant = a promise made by one party (the “covenantor”) for the benefit of
another party (the “covenantee”).
Freehold covenants (as with which we are dealing) cannot be legal interests, only
equitable interests.
As we are told by s.1(3) Law of Property Act 1925
s.53(1)(a) LPA 1925 – sets out that the freehold covenant must be in writing and
signed by the covenantor.
If no detail is given as to whether such requirements were complied with,
proceed on the basis that it has.
A = covenantee
B = covenantor
C = successor in title.
B remains liable, even though sells house to C, as under s.79 LPA 1925, B
made the covenant on behalf of C; she is bound forever unless a contrary
intention is expressed.
2. Benefit and Burden:
Who has the burden?
The person who agrees to the covenant = covenantor = the person who carries
the burden of the covenant.
Who has the benefit?
The person with whom the covenant has been agreed = covenantee = the
person who carries the benefit of the covenant.
3. Positive or Negative Covenant?
Covenants can either be positive, imposing a positive obligation in relation to that
land, or negative/restrictive, restricting the use to which the land may be put.
It is essential to establish under which category the covenant in question falls
as each carry with it different rules in relation to successors in title.
Haywood v Brunswick – set out a “hand-in-pocket test” in order to establish whether
a covenant is negative in substance.
If positive covenant –
Equity will never enforce positive covenants against successors in
title – Rhone v Stephens.
4. Has the Burden Passed in Equity?
To establish whether a successor in title is to be held to the covenant, it must be
determined whether the burden has passed; this can be either in equity or at common
law.
The burden of a covenant passes in equity if the four requirements set out in Tulk v
Moxhay are met.
(1) The covenant must be negative in substance.
(2) The covenant must accommodate the benefited land.
(3) The original parties must have intended for the burden to pass.
(4) Notice.
a. Negative in Substance:
“Hand in pocket test” – Haywood v Brunswick
If the result is unclear, it may be possible to sever it into two or more
covenants, allowing just the negative part to pass the test.
b. Accommodates the Benefited Tenement:
Lord Oliver in P&A Swift Investments described this as a question of whether the
covenant “touches and concerns” the benefited land.
In other words, it must affect “the nature, quality, mode of use, or value of the
covenantee’s land.”
1. Covenants:
Covenant = a promise made by one party (the “covenantor”) for the benefit of
another party (the “covenantee”).
Freehold covenants (as with which we are dealing) cannot be legal interests, only
equitable interests.
As we are told by s.1(3) Law of Property Act 1925
s.53(1)(a) LPA 1925 – sets out that the freehold covenant must be in writing and
signed by the covenantor.
If no detail is given as to whether such requirements were complied with,
proceed on the basis that it has.
A = covenantee
B = covenantor
C = successor in title.
B remains liable, even though sells house to C, as under s.79 LPA 1925, B
made the covenant on behalf of C; she is bound forever unless a contrary
intention is expressed.
2. Benefit and Burden:
Who has the burden?
The person who agrees to the covenant = covenantor = the person who carries
the burden of the covenant.
Who has the benefit?
The person with whom the covenant has been agreed = covenantee = the
person who carries the benefit of the covenant.
3. Positive or Negative Covenant?
Covenants can either be positive, imposing a positive obligation in relation to that
land, or negative/restrictive, restricting the use to which the land may be put.
It is essential to establish under which category the covenant in question falls
as each carry with it different rules in relation to successors in title.
Haywood v Brunswick – set out a “hand-in-pocket test” in order to establish whether
a covenant is negative in substance.
If positive covenant –
Equity will never enforce positive covenants against successors in
title – Rhone v Stephens.
4. Has the Burden Passed in Equity?
To establish whether a successor in title is to be held to the covenant, it must be
determined whether the burden has passed; this can be either in equity or at common
law.
The burden of a covenant passes in equity if the four requirements set out in Tulk v
Moxhay are met.
(1) The covenant must be negative in substance.
(2) The covenant must accommodate the benefited land.
(3) The original parties must have intended for the burden to pass.
(4) Notice.
a. Negative in Substance:
“Hand in pocket test” – Haywood v Brunswick
If the result is unclear, it may be possible to sever it into two or more
covenants, allowing just the negative part to pass the test.
b. Accommodates the Benefited Tenement:
Lord Oliver in P&A Swift Investments described this as a question of whether the
covenant “touches and concerns” the benefited land.
In other words, it must affect “the nature, quality, mode of use, or value of the
covenantee’s land.”
