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Enforceability of the Burden of a Freehold Covenant

Document Cited authorities 81 Cited in Related
AuthorWilliam Webster/Robert Weatherley
Pages249-261
Chapter 26


Enforceability of the Burden of a Freehold Covenant

INTRODUCTION

26.1 This chapter is concerned with restrictive covenants. There is a wide range of covenants, and examples of the various types of restrictive covenants are examined in more detail, including where necessary, in cases of ambiguity, an approach to the proper construction of such covenants. In summary, however, restrictive covenants falling within transfers or leases of property typically include the following range of covenants:

▪ covenants which prohibit the covenantor’s land from being used for any trade or business or only certain trades or businesses (and not, for instance, as a place for amusement, hotel, or public house);

▪ covenants which prohibit the use of the covenantor’s land for any purpose other than as a single private dwelling-house;

▪ covenants which prohibit sub-division of the land;
▪ covenants which regulate the height, type, density or location of any fence, hedge, building or other permissible development;
▪ covenants which require the covenantee’s consent to any contemplated activity (such as building work of any specified kind or generally) or, in the case of the inability to apply for planning permission to develop land, without the prior approval of the covenantee or his surveyor of any plans, drawings and specifications, including any revised or amended plans, etc;
▪ covenants which require the approval of plans by both the freehold owner of the neighbouring land and by the individual lessees prior to the submission of an application for planning permission;
▪ covenants which control the use of the land itself, including restrictions on activities which cause annoyance to neighbours such as might arise, for instance, in the case of parking, playing loud music or keeping pets;
▪ covenants which prohibit the carrying on of any activity that constitutes a nuisance, or is offensive and dangerous;
▪ covenants which regulate the specified duration of the relevant restrictions;
▪ covenants which, in a scheme of development, are intended to be enforceable by and against all the owners living on the same estate.

250 Restrictions on the Use of Land

DEVELOPMENT OF THE LAW OF RESTRICTIVE COVENANTS

26.2 The rule that the benefit and burden of a restrictive covenant ran with the land in equity emerged in Tulk v Moxhay.1The case concerned land in Leicester Square which the original covenantor agreed to maintain as undeveloped open space. A later purchaser, whose conveyance did not contain the restriction, but who nonetheless bought with notice of the covenant, was restrained by injunction from building on the land.

26.3 The rule has become subject to various conditions:

(a) The covenant must be negative in nature or restrictive of the use of the burdened land.

(b) The covenant must confer a burden on one parcel of land for the benefit and protection of land held by the covenantee.

(c) There are special rules in relation to the enforceability of a restrictive covenant where the original covenantee has parted with the benefited land.

(d) The covenant must have been intended to run with the covenantor’s land (i.e. the burden must not have been intended to be personal to the covenantor).

(e) The original equitable defence involving purchase of the legal estate for value without notice of the covenant has been displaced by statute.2

COVENANT MUST BE NEGATIVE IN NATURE OR RESTRICTIVE OF THE USE OF THE BURDENED LAND

26.4 This rule arose in 18813and was reaffirmed in Rhone v Stephens.4A useful test for these purposes is whether the covenant requires the covenantor to incur expense. If it does (as would arise, for instance, in the case of a covenant ‘not to let premises fall into disrepair’ which, although expressed negatively, nonetheless calls for expenditure on repairs) then the covenant will not be negative in nature.5

For instance, if land is covenanted to be used for specific purposes (e.g. as a dwelling-house) then it implies a prohibition (i.e. an obligation which is negative

1(1848) 2 Ph 774.

2Land Registration Act 2002, ss 29(1), (2)(a)(i) and 32–34, in the case of registered land, the only recognised form of notice is the entry of a notice in respect of the burden in the charges register of the covenantor’s land. In the case of unregistered land, the passing of the burden requires its registration against the name of the covenantor as a Class D(ii) land charge in the Register of Land Charges (see Land Charges Act 1925, s 10(1) and Land Charges Act 1972, s 2(5)).

3Haywood v Brunswick Permanent Benefit BS (1881) 8 QBD 403 at 409, per Cotton LJ, who stated that where the covenantor is required ‘to put his hand in his pocket’ the covenant will usually be positive in nature.

4[1994] 2 AC 310.

5Haywood v Brunswick Permanent Benefit BS (1881) 8 QBD 403 at 409–410. In Bedwell Park

Quarry Co Ltd v Hertfordshire County Council [1993] JPL 349 at 352, Slade LJ said in the case of the obligation of a quarry operator to restore the land to agriculture that, ‘it was hard to think of an obligation that was more positive in substance as well as form’.

in nature) not to use the land for other purposes.6It has also been held that a covenant to give first refusal (i.e. a right of pre-emption) on the sale of land7

involved a negative contract not to part with the land (which was a racecourse) to anyone else without giving that first refusal. In another case, a covenant in a lease prohibited assignments without the prior consent of the landlord (such consent not to be unreasonably withheld – it was also a pre-condition of any subletting that there be a covenant entered into between the landlord and the subtenants). In breach of covenant, the tenants granted a sublease to parties with knowledge of the covenant. The court granted a mandatory injunction against the sublease. The court indicated that a covenant against alienation or subletting could properly be defined as a restrictive covenant.8

26.5 In Shepherd Homes Ltd v Sandham (No 2),9the defendant purchaser had covenanted with the plaintiff vendor to keep and use land in advance of the building line of a house which was to be built as an ornamental garden and entrance drive only and not to: (a) erect any building in advance of the building line; (b) cut any turf; and (c) erect or plant any fence or hedge in advance beyond such line. The plaintiff had erected a fence around his garden to prevent incursions of sheep and horses from the neighbouring open land. The court ruled that whether a covenant was negative was a question not of wording but of substance. That where, as here, a covenant was worded as a single covenant it could nevertheless give rise to more than one obligation, and that the presence of a positive obligation did not prevent a neighbouring negative obligation from being enforceable.

COVENANT MUST BE MADE FOR THE BENEFIT AND PROTECTION OF LAND HELD BY THE COVENANTEE

26.6 ‘A benefit for this purpose must be something affecting either the value of the land or the method of its occupation or enjoyment’.10It is, therefore, plain that

6German v Chapman (1877) 7 Ch D 271 (where the erection of a building used for the education and lodging of 100 girls in connection with a charitable institution was held to be in breach of a covenant ‘that no house or other building to be erected or built on the land shall be used or occupied otherwise than as and for a private residence only, and not for any purpose of trade’). In Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410, the judge at first instance ([2002] EWHC 2443 (Ch)) had found that the erection of five houses on land would infringe a restriction which precluded the covenantor from erecting more than one dwelling-house on the land (i.e. a user restriction and a building restriction). See also Abbey Homesteads (Developments) Ltd v Northamptonshire County Council (1987) 53 P & CR 1 at 5 and 7; Collins v Castle (1887) 36 Ch D 243 at 253–255; Blumenthal v Church Commissioners for England [2005] 2 P & CR 20 at [33].

7Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37 at 51.

8Hemingway Securities Ltd v Dunraven Ltd (1996) 71 P & CR 30 at 33, in which Esso Petroleum

Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142, was referred to.

9[1971] 1 WLR 1062.

10Re Gadd’s Land Transfer [1966] Ch 56 at 66B, per Buckley J, where the retention of a service road on a developed building estate was sufficient to justify the enforcement of restrictions on user and building on adjoining plots. This was because since any breach of covenant was liable to impact on the quantity of use of the service road which, in turn, might lead to greater expense being incurred by the covenantee in the discharge of the common duty of care which it owed to

252 Restrictions on the Use of Land

covenants (provided they are not of a personal nature11or which otherwise cannot be said to confer a benefit on the covenantee’s land in any relevant sense) which restrict or control the way in which the covenantor’s land is used or developed will, for these purposes, confer a relevant benefit on the covenantee’s adjoining or adjacent land and will, accordingly, be binding on successors of the covenantor. It has also been said that, provided a covenantee reasonably takes the view that a restriction is of value to his land then it will not be treated as spent, even if this is reasonably arguable.12

26.7 There must be two plots of land which are proximate to each other.13A

covenantee loses his right to enforce a covenant against successors of the original covenantor once he has disposed of his interest in the benefited land,14or where
visitors under the Occupier’s Liability Act 1957 which, if not discharged by the covenantee, gave rise to a risk...

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