Right of Re-entry

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Chapter 5

Right of Re-entry

5.1 PRELIMINARY

A right of entry or re-entry used to secure positive covenants provides that, if a covenant or condition attached to the servient land is broken, the beneficiary may enter on the burdened land. It can be granted by a landowner or, more often, reserved on sale. It subsists as a distinct interest in land so that it can stand on its own, although the benefit is normally annexed to a dominant tenement or to a rentcharge. The burden binds the servient land in the hands of a successor to the original covenantor.

The right may operate in one of two ways. The effect of entry may be to determine the freehold estate of the former servient owner, in which case it operates as a forfeiture. Alternatively the dominant owner may be entitled to come on to the land affected and carry out any works which ought to have been done under the positive covenant and then have a separate right, supported by potential forfeiture, to recover the cost of the works from the servient owner. Private rights of re-entry, both as forfeiture and as power to do works, are commonly found in leases and in principle the way the courts approach leasehold re-entry is similar to the way they can apply to entry on a freehold.

These contractual rights of entry are distinct from numerous statutory varieties of public right belonging to central or local government bodies or utilities carrying out public functions¹or rights conferred by Parliament on neighbours.²In such instances the estate of the landowner is not itself affected. In the case of a public right, the authority entering has the right to come on to the land, sometimes to inspect and see whether a statutory duty has been complied with and sometimes with the right to rectify the default and recover the cost of doing so from the landowner.

¹See para 12.6.

²See para 5.4.

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48 Positive Covenants and Freehold Land

There can also be common law rights of entry attached to easements, such as the right to repair a track over which the dominant owner has a right of way, or a right to clean out a drainage ditch or repair a water pipe³but with no power to recover the cost.

Re-entry on forfeiture determines the freeholder’s estate. Before 1926 a determinable fee could subsist as a legal estate in land. The policy of the 1925 reforms was to reduce legal estates to two and the only type of legal freehold was intended to be a fee simple absolute. A determinable fee is not absolute and if an estate potentially subject to re-entry was to be treated as determinable it would have constituted an equitable estate and the land would have had to be held in settlement or trust. This problem was spotted after the LPA 1925 came into force and the Law of Property (Amendment) Act 1926 inserted into the LPA 1925, s 7 (which dealt with freeholds subject to determination) the words ‘a fee simple subject to a legal or equitable right of entry or re-entry is for the purposes of this Act a fee simple absolute’. It is therefore a legal estate even though determinable.

The LPA 1925, s 1(2) lists those rights in land which are capable of being legal interests. Section 1(2)(e) includes ‘Rights of entry exercisable over or in respect of a legal term of years absolute, or annexed, for any purpose, to a legal rentcharge’. Thus a free-standing right of entry exercisable over freehold land and not annexed to a rentcharge is an equitable interest and its exercise is subject to equitable principles. It is not an overriding interest within LRA 2002, Schedules 1 and 3 and therefore must be entered on the register of title.

The LPA 1925, s 4(2)(b)⁴as originally enacted provided that ‘a right of entry, into or upon land whether immediate or future, and whether vested or contingent’ could be disposed of and s 4(3)⁵provided that:

All rights of entry affecting a legal estate which are exercisable on condition broken or for any other reason may after the commencement of this Act, be made exercisable by any person and the persons deriving title under him, but, in regard to an estate in fee simple (not being a rentcharge held for a legal estate) only within the period authorised by the rule relating to perpetuities.

The words from ‘but, in regard’ to the end were repealed by the Perpetuities and Accumulations Act 2009 so that such a right over freehold land can now be made exercisable without limit of time. It would consequently have been possible to convert rights of entry over freeholds and not annexed to a rentcharge into legal interests but that was not done.

³See para 7.4.

⁴Re-enacting the Real Property Act 1845, s 6.

⁵Extending the power of alienation to rights of entry for condition broken.

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5.2 SHILOH SPINNERS v HARDING

The device of a right of entry as a stand-alone remedy to enforce positive covenants, leading to forfeiture on breach, was approved by the House of Lords in Shiloh Spinners Ltd v Harding.⁶The case actually involved an assignment of leasehold property but the House accepted that the same principles applied as on the conveyance of a freehold. Shiloh owned the lease of a mill. In 1961 they assigned part of the leasehold to Thornber Brothers Ltd which covenanted on their own behalf and that of their successors in title to observe and perform some positive covenants to fence, to brick up certain openings and to repair a tower which supported buildings retained by Shiloh. The deed provided that Thornber would not be liable after parting with the property but also included a power for Shiloh to re-enter and take back the property if there was a breach. In 1965 Thornber resold their interest in the premises to Mr Harding. He failed to carry out the obligations and in 1969 Shiloh, relying on their right to re-enter, took proceedings for possession.

The re-entry clause was as follows:

7. (a) If at any time during the lifetime of the last survivor of the descendants now living of His Late Majesty King George V and twenty one years after the death of such last survivor or during such further period (if any) as shall not infringe the law against perpetuities there shall be any failure to perform or observe any of the covenants herein contained implied or referred to on the part of the purchaser then and in every such case and notwithstanding the waiver of any previous default it shall be lawful for the vendor or the owner or owners for the time being of the premises comprised in the first lease and the second lease not hereby assigned at any time or times during the periods aforesaid into and upon the premises hereby assigned or any part...