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FREEHOLD COVENANTS - Coggle Diagram
FREEHOLD COVENANTS
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FREEHOLD COVENANTS
Covenant is a promise usually in a deed BUTa deed is not essential
- To validly create a covenant, it must be in writing and signed by the grantor
Covenantee: receives benefit of promise
Covenantor: makes promise
Servient land: burdened land
Dominant land: benefitted land
Successor covenantee: new owner of dominant land.
Successor covenantor: new owner of servient land.
TypesPositive covenant = promise to do something > involves expenditure of money
Negative or restrictive covenant = promise not to do something > restricts the use of the landDetermining the nature of a covenant
hand in pocket test = If covenantors have to put their hands in their pockets to find money to spend to perform the covenant > positive
- looking at the substance not form
Mixed covenants = promise which has positive and restrictive elements > can be interpreted in one of two ways:
- Separate Covenants = if positive and restrictive aspects of obligation can be separated into 2 covenants
- As one obligation with a condition attached = if cannot be split > overall positive or restrictive with condition attached
COMMON LAW RULES
burden of restrictive covenants can pass using the equitable rules, the common law rules are primarily applied to covenants that are positive in nature
BURDEN
NOT pass to a successor covenanter at common law = covenant is unenforceable against a successor covenantor + burden remains with the original covenantor who can be sued for damages for its own + successor breaches
- Expressly stated OR implied
- only remedy available against the original covenantor is damages
How does the original covenantor recover outlay?
Original covenantor should require its successor to enter:
- Indemnity covenant = promising to comply with the covenant + reimburse for any loss incurred as a result of a breach > Enables the original covenantor to sue their direct successor + If there is a complete chain of indemnity to the current owner in breach, it is method of indirect enforcement.
Exception enabling burden of a covenant to pass to a successor covenantor at common law
- The doctrine of mutual benefit and burden / the rule in Halsall v Brizell
- Burden passes to a successor covenantor at common law if covenantee grants covenantor a benefit in nature of an easement + a connected burden:
- clear link between the burden and the benefit
- genuine choice as to whether or not to take the benefit
- benefit and burden must have been conferred in the same transaction
- Dispose of the land by way of long lease
- All covenants in leases except personal are enforceable by and against successors in title via the doctrine of privity of estate
BENEFIT
original covenantee can enforce a covenant as a matter of contract law
If the dominant land is sold = successor covenantee must show that the benefit has passed to it at common law to enforce the covenant against original covenantor / successor
- Express assignment
Benefit of a covenant can be expressly assigned to a successor = in writing and express notice of the assignment must be given to the covenantor
- Implied assignment
IF no express assignment, benefit of a covenant may pass to a successor covenantee if certain conditions are met = automatically passing every time the land is transferreda. The covenant must touch and concern the land
= must benefit the dominant landb. There must have been an intention that the benefit should run with the dominant land = expressly or impliedly unless it is expressly excludedc. The original covenantee must have a legal estate in dominant land d. Successor covenantee must hold a legal estate in the dominant landc. + d. = can be free / leasehold and need not be same nature
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