Despite a clamour several times since 1952, for the reform of the law relating to freehold covenants, they continue to pose difficulties for landowners and property developers.

Not recognised as a formal interest in land, by section 1(2) they continue with their ubiquitous legal position as quasi contractual and quasi-interest in land.

A restrictive covenant, will burden a purchaser of land for value, provided that it meets the criteria set out in the case of Tulk v Moxhay (1842) 2 PH 774 which are;

1.     The covenant is restrictive in nature;

2.     At the date of the covenant, the covenantee owned the land that was benefitted by the covenant.

3.     The covenant touches and concerns the land which it burdens (i.e it is not personal in nature)

4.     A purchaser takes with notice of the covenant;

The covenant needs to also have been properly annexed to the land and be apparent upon a reasonably careful inspection of the property (or, if, it has been correctly noted in the charges register of the property) a reasonable careful inspection of the title to the property. This means, that covenants which are restrictive in nature and seek to prohibit landowners from dealing with their property in certain circumstances are almost always likely to bind successors in title so the burden of those covenants will pass but what about the benefit?

The courts have adopted various approaches, such as the doctrine of mutual benefit and burden as refined in the case of Goodman & Others v Elwood (2013), so that the beneficiary of a restrictive covenant is able to enforce it providing there is a corresponding burden to the covenant for example where there is a covenant to maintain a property this can exist where the land owner of the neighbouring property has a corresponding burden, for example to maintain the roof area or similar.

Mandating the performance of positive covenants by use of chains of indemnity covenants is also commonplace in modern residential and commercial conveyancing practice and can have a similar effect to the doctrine of mutual benefit and burden by mandating the performance of positive covenants. Chains of indemnity covenants operate by seeking to hold the original party with the burden of the obligation or covenant liable and then enabling that party to seek an indemnity from subsequent successors in title. The operation of a chain of indemnity covenants, depends on the party who has the benefit of the covenant, being able to trace the original party who has the burden of the covenant against whom the covenant is ultimately enforceable.

This becomes more problematic as the covenant ages and it can be said that it is at best a practical short term solution to the issue of enforceability of restrictive covenants.

Restrictive covenants can have a significant impact on your ability to deal with or build on land and so please contact us if you have any queries over whether a covenant might be enforceable.   

If you'd like assistance in relation to the issues raised please do contact Liz Turner at lturner@ortolan.com