Freehold Covenants

Introduction
• Neighbors often make agreements, called covenants, about how they will
or won’t use their land. These agreements are legally binding contracts
between the original parties. However, for the covenants to apply to future
owners of the land, specific legal rules must be followed. These rules
involve both common law and equitable principles.
• Covenants create a relationship between two pieces of land: one benefits
(dominant tenement) and the other is restricted (servient tenement). The
person who benefits is called the covenantee, and the person with the
obligation is the covenantor. Before strict planning laws, covenants were a
key way to control land use and maintain property value. They help
maintain good neighborly relations and protect land value.
• Covenants can be positive (requiring an action, like maintaining a fence)
or negative (restricting an action, like running a business). Enforcing
covenants is straightforward between the original parties, but it becomes
more complicated when the land is sold to new owners.
 Introduction
• A freehold covenant is a legal agreement between two parties
about how land can be used. Covenants can be negative
(restricting an action, like not building a wall above a certain
height) or positive (requiring an action, like building a wall,
which involves cost and effort).
• Originally, covenants are binding only on the parties who made
the agreement. The key question in land law is whether the
covenant will also bind future owners of the land. For this to
happen, the covenant must "run with the land" or "touch and
concern the land," meaning it must relate directly to the land
itself. For example, a covenant to maintain a sewer system on a
neighbor’s land relates to the land, but a covenant to polish a
neighbor’s shoes is personal and does not.
 Introduction
At common law:
• The benefit of a covenant (the right to enforce it) automatically
passes to new owners of the land under Section 78 of the Law
of Property Act 1925, as confirmed in Federated Homes Ltd v
Mill Lodge Properties Ltd (1980).
• The burden of a covenant (the obligation to comply) does not
pass to new owners, even under Section 79 of the Law of
Property Act 1925, as ruled in Rhone v Stephens (1994).
 Sections 78 and 79 of the LPA 1925
Section78 Benefit of covenants relating to land.

• (1)A covenant relating to any land of the covenantee shall be deemed to be made
with the covenantee and his successors in title and the persons deriving title under
him or them, and shall have effect as if such successors and other persons were
expressed.

• For the purposes of this subsection in connexion with covenants restrictive of the
user of land “successors in title” shall be deemed to include the owners and
occupiers for the time being of the land of the covenantee intended to be benefited.

• (2)This section applies to covenants made after the commencement of this Act, but
the repeal of section fifty-eight of the Conveyancing Act, 1881, does not affect the
operation of covenants to which that section applied.
 Federated Homes Ltd v Mill Lodge
Properties Ltd [1980] 1 WLR 594
• In this case ,the Court of Appeal clarified the application of Section 78 of
the Law of Property Act 1925 and its effect on the annexation of the
benefit of covenants to land.
Key Facts:
• The case involved a restrictive covenant imposed on a piece of land
(the servient land) to limit the number of houses that could be built on it.
• The original covenantee (the person who benefited from the covenant)
sold part of the dominant land (the land that benefited from the covenant)
to Federated Homes.
• Mill Lodge Properties, the successor in title to the servient land,
breached the covenant by building more houses than allowed.
• Federated Homes sought to enforce the covenant against Mill Lodge
Properties.
 Federated Homes Ltd v Mill Lodge
Properties Ltd [1980] 1 WLR 594
Legal Issue:
• The main question was whether the benefit of the covenant had passed to Federated Homes,
even though they were not the original covenantee.
Court’s Decision:
• The Court of Appeal held that the benefit of the covenant had passed to Federated Homes under
Section 78 of the Law of Property Act 1925. The court made the following key rulings:
[Link] 78 Automatically Annexes the Benefit:
1. Section 78 provides that the benefit of a covenant relating to land is deemed to be annexed to the land
unless a contrary intention is expressed.
2. This means that the benefit of the covenant automatically passes with the land to successors in title, without
the need for express assignment or annexation.
[Link] to Each Part of the Land:
1. The court held that the benefit of the covenant was annexed to each and every part of the dominant land, not
just the whole.
2. This meant that Federated Homes, as the owner of part of the dominant land, could enforce the covenant even
though they did not own the entire original dominant land.
[Link] Need for Express Words of Annexation:
1. The court rejected the argument that the covenant had to contain explicit words annexing the benefit to the
Federated Homes Ltd v Mill Lodge
Properties Ltd [1980] 1 WLR 594
Significance:
• Automatic Annexation: The case established that Section 78
automatically annexes the benefit of a covenant to the
dominant land, making it easier for successors in title to
enforce covenants.
• Annexation to Parts of the Land: The ruling clarified that
the benefit of a covenant is annexed to each part of the
dominant land, not just the whole. This is particularly important
in cases where the dominant land is divided and sold in parts.
• Simplified Enforcement: The decision simplified the
enforcement of restrictive covenants by removing the need for
express assignment or annexation in most cases.
 Sections 78 and 79 of the LPA 1925
Section 79 Burden of covenants relating to land.

• (1)A covenant relating to any land of a covenantor or capable of being bound by him, shall,
unless a contrary intention is expressed, be deemed to be made by the covenantor on
behalf of himself his successors in title and the persons deriving title under him or them,
and, subject as aforesaid, shall have effect as if such successors and other persons were
expressed.

• This subsection extends to a covenant to do some act relating to the land, notwithstanding
that the subject-matter may not be in existence when the covenant is made.

• (2)For the purposes of this section in connexion with covenants restrictive of the user of
land “successors in title” shall be deemed to include the owners and occupiers for the time
being of such land.

• (3)This section applies only to covenants made after the commencement of this Act.
 Rhone v Stephens [1994] 2 AC 310
• In Rhone v Stephens [1994] 2 AC 310, the House of Lords (now the Supreme
Court) addressed the issue of whether the burden of a positive covenant (an
obligation to do something) could pass to a successor in title (a later owner of
the burdened land). This case is a landmark decision in the law of covenants
and reaffirmed the traditional rule that the burden of positive covenants cannot
run with the land.
Key Facts:
• The case involved two adjoining properties: a house and a cottage.
• The roof of the house extended over part of the cottage, and there was a
covenant requiring the owner of the house to maintain the roof in good
condition (a positive covenant).
• The original covenantor (the person who made the promise) sold the house, and
the new owner (the successor in title) refused to maintain the roof.
• The owner of the cottage, Mrs. Stephens, sought to enforce the covenant
 Rhone v Stephens [1994] 2 AC 310
Legal Issue:
• The main question was whether the burden of the positive
covenant (the obligation to maintain the roof) could pass to the
successor in title, Mr. Rhone, and be enforced by Mrs. Stephens.
 Rhone v Stephens [1994] 2 AC 310
Court’s Decision:
• The House of Lords held that the burden of a positive covenant cannot pass to a successor in title, even
in equity. The court made the following key rulings:
[Link] of Positive Covenants Cannot Run:
1. The burden of a positive covenant (an obligation to do something, like maintaining a roof) cannot run with the land at
common law or in equity.
2. This is because enforcing positive covenants would contradict the fundamental principle that only parties to a contract can be
bound by it.
[Link] Between Positive and Negative Covenants:
1. The court emphasized the distinction between positive covenants (which require action) and negative covenants (which
restrict action).
2. While the burden of negative covenants can pass in equity (under the rule in Tulk v Moxhay), the same does not apply to
positive covenants.
[Link] Equitable Exception:
1. The court rejected the argument that equity could create an exception to allow the burden of positive covenants to pass.
2. Lord Templeman stated that enforcing positive covenants would "flatly contradict" the common law rule that only parties to a
contract can be bound by it.
[Link] Implications:
1. The decision left Mrs. Stephens without a remedy, as the burden of the covenant to maintain the roof did not pass to Mr.
Rhone.
2. The original covenantor (the person who made the promise) remained liable for breaches, but this was of little practical use to
Rhone v Stephens [1994] 2 AC 310
Significance:
• Reaffirmation of Traditional Rule: The case
reaffirmed the long-standing rule that the burden of
positive covenants cannot run with the land.
• Clarification of Covenant Law: The decision clarified
the distinction between positive and negative covenants
and the limitations on enforcing positive obligations.
• Impact on Property Owners: The ruling highlighted
the difficulties in enforcing positive covenants,
particularly in cases involving shared structures or
maintenance obligations.
Introduction
In equity:
• The benefit can pass through annexation, assignment,
or a building scheme.
• The burden of a negative covenant can pass under
the rule in Tulk v Moxhay (1848), which allows
restrictions to bind future owners.
• However, the burden of a positive covenant cannot
pass to new owners, even in equity, as confirmed in
Rhone v Stephens.
 Introduction
• Covenants (both freehold and leasehold) were historically a key way
to control land use before government agencies took on this role.
Today, they are still widely used to make certain areas more
attractive to buyers by preserving local amenities and protecting
property values.
• While it’s generally good for covenants to be enforceable by and
against future owners of the land, enforcing every covenant—no
matter how minor or vague—could create unfair burdens for buyers of
the restricted (servient) land and make it hard to sell. A key principle
of land law is to maintain land value and ensure it can be freely
bought and sold. Therefore, the law must balance the interests of
those who benefit from covenants and those who are burdened by
them. This is why the rules around freehold covenants (which apply to
land ownership, not leases) have developed carefully over time.
 Introduction
• Imagine V sells part of their land to P, and P agrees to certain covenants
(promises about how the land will be used). These covenants are
enforceable between V and P as the original parties. However, if V later
sells their remaining land to X, and P sells their land to Y, the question
arises: can X enforce the covenants against Y?
• For X to enforce the covenants against Y, two things must be shown:
[Link] benefit of the covenant (the right to enforce it) must have passed
to X.
[Link] burden of the covenant (the obligation to comply) must have
passed to Y.
• If both conditions are met, the covenant acts as a restriction on Y’s land.
However, the rules for passing the benefit and burden depend on legal
principles, which can be complex.
Passing the benefit of the covenant at law
The original covenantee (the person who benefits from the
covenant) can always enforce the covenant against the original
covenantor (the person who made the promise), as this is based
on contract law.
Additionally, Section 56 of the Law of Property Act 1925
allows certain third parties to enforce the covenant, even if they
didn’t sign the agreement. For this to apply, the third party must:
[Link] mentioned in the deed (the legal document containing the
covenant).
[Link] at the time the deed was created.
• This means the benefit of the covenant can extend to others who
 Passing the benefit of the covenant
at law
• In Re Ecclesiastical Commissioners for England’s Conveyance [1936] Ch 430, the
court dealt with the issue of whether a covenant (a promise about land use) could
be enforced by someone who was not an original party to the agreement but was
mentioned in the deed.
Key Facts:
• The Ecclesiastical Commissioners sold land and included a covenant in the deed
that restricted the use of the land (e.g., prohibiting certain types of buildings).
• The covenant was intended to benefit adjoining land owned by the Commissioners.
• Later, the Commissioners sold the adjoining land to a new owner, who sought to
enforce the covenant against the original buyer.
Legal Issue:
• The question was whether the new owner of the adjoining land (who was not an
original party to the covenant) could enforce the covenant under Section 56 of
the Law of Property Act 1925. This section allows third parties to enforce a
covenant if they are mentioned in the deed and the covenant was made for their
 Passing the benefit of the covenant
at law
Court’s Decision:
• The court held that the new owner could enforce the covenant because:
[Link] covenant was made for the benefit of the adjoining land, which the
new owner now owned.
[Link] new owner was within the scope of Section 56, as they were a person
mentioned in the deed (indirectly, through the description of the land) and
the covenant was intended to benefit them.
Significance:
• This case clarified that under Section 56 LPA 1925, a third party can
enforce a covenant if they are identified in the deed (even if not by name)
and the covenant was made for their benefit. It expanded the ability of
successors in title to enforce covenants, provided the original deed clearly
intended to benefit them.
 Passing the benefit of the covenant
at law
The Contracts (Rights of Third Parties) Act 1999:
• Applies to contracts (including covenants) made after 11 May
2000.
• Allows a third party (someone not directly involved in the
contract) to enforce a term of the contract if:
• The contract expressly states that they can, or
• The term confers a benefit on them.
• The third party can be identified by name, description, or as
part of a group.
• Importantly, the third party does not need to exist at the time
the contract is made.
 Passing the benefit of the covenant
at law
Comparison with Section 56 LPA 1925:
•Section 56 LPA 1925 also allows third parties to enforce covenants, but
only if:
•They are mentioned in the deed (even if not by name).
•They existed at the time the deed was made.

The 1999 Act is wider in scope because:

•It does not require the third party to exist when the contract is made.
•It applies to any contract, not just deeds involving land.
 Passing the benefit of the covenant
at law
For the benefit of a covenant can pass to a successor in title (someone who later
acquires the land) at common law, the covenant must first "run with the land". This
means it must meet the following conditions:
[Link] Covenant Must "Touch and Concern" the Land:
1. The covenant must directly relate to the use or value of the land, not just be a personal
obligation.
2. Example: A covenant to maintain a fence or not to build above a certain height "touches and
concerns" the land.
3. This principle was established in Smith and Snipes Hall Farm Ltd v River Douglas Catchment
Board [1949] and refined in Swift Investments v Combined English Stores [1989].
[Link] Covenantee and Their Successor Must Have a Legal Estate in the Land:
1. Both the original covenantee (the person who benefits from the covenant) and their successor
must have a legal interest in the land (e.g., freehold or leasehold).
2. This is supported by Section 78 of the Law of Property Act 1925, which assumes the benefit
of a covenant is intended to pass with the land unless stated otherwise.
[Link] Original Parties Intended the Covenant to Run with the Land:
1. The covenant must have been intended to benefit future owners of the land, not just the original
parties.
2. However, some cases (like Smith and Snipes and Swift Investments) suggest that this
requirement is less strict, as Section 78 LPA 1925 implies an intention for the benefit to pass
Smith and Snipes Hall Farm Ltd v River
Douglas Catchment Board [1949] 2 KB
500
• In Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2
KB 500, the court addressed the issue of whether the benefit of a covenant
(a promise about land use) could pass to a successor in title (a later owner of
the land) under common law.
Key Facts:
• The River Douglas Catchment Board (the defendant) entered into an
agreement with the owners of certain land to improve and maintain riverbanks
to prevent flooding.
• The agreement included a covenant (promise) by the Board to maintain the
riverbanks.
• The land was later sold to Smith and Snipes Hall Farm Ltd (the claimants),
who relied on the covenant to ensure the riverbanks were maintained.
• When the riverbanks were not properly maintained, causing flooding, the
claimants sued the Board for breach of the covenant.
 Smith and Snipes Hall Farm Ltd v
River Douglas Catchment Board
[1949] 2 KB 500
Legal Issue:
• The main question was whether the benefit of the covenant (the right to enforce it)
had passed to the claimants, who were not the original parties to the agreement.
Court’s Decision:
• The court held that the benefit of the covenant had passed to the claimants
because:
[Link] Covenant "Touched and Concerned" the Land:
1. The covenant was directly related to the use and value of the land, as it aimed to prevent
flooding and maintain the riverbanks.
2. This meant the covenant was not purely personal but was tied to the land itself.
[Link] Original Parties Intended the Benefit to Pass:
1. The court found that the original parties intended the covenant to benefit future owners of the
land, not just the original covenantee.
[Link] Claimants Had a Legal Estate in the Land:
1. The claimants owned the land and had a legal interest in it, satisfying the requirement for the
 Swift Investments v Combined
English Stores [1989] AC 632
In Swift Investments v Combined English Stores [1989] AC 632, the House
of Lords (now the Supreme Court) clarified the legal principles governing
when the benefit of a covenant (a promise about land use) can pass to
a successor in title (a later owner of the land) under common law.
Key Facts:
• The case involved a restrictive covenant (a promise not to do
something on the land) that was imposed on a piece of land.
• The original covenantee (the person who benefited from the covenant)
sold the land, and the question arose whether the benefit of the
covenant had passed to the new owner, Swift Investments.
• The covenant restricted the use of the land, and the new owner sought
to enforce it against the original covenantor (the person who made the
promise).
 Swift Investments v Combined
English Stores [1989] AC 632
Legal Issue:
• The main question was whether the benefit of the covenant could pass to the new owner under
common law and, if so, what conditions needed to be satisfied.
Court’s Decision:
• The House of Lords set out the following three conditions that must be met for the benefit of a
covenant to pass to a successor in title at common law:
[Link] Covenant Must "Touch and Concern" the Land:
1. The covenant must relate to the use or value of the land, not just be a personal obligation.
2. In this case, the restrictive covenant (limiting the use of the land) clearly touched and concerned the land.
[Link] Original Parties Intended the Benefit to Pass:
1. The court must find that the original parties intended the benefit of the covenant to pass to future owners of the
land.
2. This intention can be inferred from the wording of the covenant or the circumstances.
[Link] Successor in Title Must Have a Legal Estate in the Land:
1. The person claiming the benefit of the covenant must have a legal interest in the land (e.g., freehold or
leasehold).
• The court held that all three conditions were satisfied in this case, so the benefit of the covenant had
Passing the benefit of the covenant
at law
Once the above conditions are met, the benefit of the
covenant can pass to a successor in title through:
[Link]:
[Link]:
 Passing the benefit of the covenant
at law
Express Assignment:
• The original covenantee (the person who benefits from the covenant)
can explicitly transfer the benefit of the covenant to their successor
in title.
• Example: The covenantee might say, "I, A, give to you, C, the benefit of
covenant 2."
• Requirements:
• The covenant must not be purely personal (it must relate to the land).
• The assignment must follow the formalities set out in Section 136 of the Law
of Property Act 1925 (e.g., it must be in writing and clearly state the
intention to transfer the benefit).
• Significance:
• This method is less commonly used today but can be helpful if other methods
 Passing the benefit of the covenant
at law
Annexation
The benefit of the covenant can be permanently attached (annexed) to
the dominant land (the land that benefits from the covenant).
• Types of Annexation:
• Express Annexation: The original parties explicitly state in the deed that the
benefit of the covenant is attached to the land.
• Statutory Annexation: Under Section 78 of the Law of Property Act 1925,
the benefit of a covenant is automatically assumed to be annexed to the dominant
land unless stated otherwise.
• Key Features:
• There is no requirement for the successor in title to own the same legal estate
as the original covenantee. For example, the original covenantee might own the
freehold, but the successor could own a leasehold.
• The statute also applies if the covenantee transfers only part of the dominant
land (not the whole).
 Equitable Rules Matter More
In practice, the equitable rules are more important than the common
law rules for passing the benefit of covenants. This is because:
[Link] common law rules are inapplicable in certain situations, such as:
[Link] the claimant’s land is part of a scheme of development (a planned
area where covenants apply uniformly to all plots).
[Link] the servient tenement (the burdened land) has been sold, and
enforcement depends on the equitable doctrine of restrictive covenants.
[Link] such cases, it is often argued that for the burden of a covenant to
pass in equity, the benefit must also pass in equity. This is not usually
a problem because the equitable rules for passing the benefit are more
flexible than the common law rules.
 Equitable Rules Matter More
Key Features of Equitable Rules:
[Link] Nature:
1. Equitable rules are based on fairness and discretion, so a court may refuse to
enforce a covenant if:
[Link] is unnecessary delay (laches), or
[Link] claimant acted in bad faith (mala fides).
2. This means that even if the common law rules for passing the benefit and the
equitable rules for passing the burden are satisfied, a court might still deny
enforcement on equitable grounds.
[Link] in Modern Courts:
1. Courts today take a flexible approach to equitable rules, avoiding the overly rigid
and technical interpretations of the past.
2. However, the claimant must still show that:
[Link] covenant touches and concerns their land (i.e., it relates to the use or value of the land).
[Link] have acquired the benefit of the covenant through one of the three equitable methods:
[Link]: The benefit is permanently attached to the land.
[Link]: The benefit is explicitly transferred to the claimant.
[Link] of Development: The land is part of a planned area where covenants apply uniformly to all
 Passing of Benefit under Equity
Express Assignment:
• The benefit of a covenant can be explicitly assigned
(transferred) to the covenantee’s successor in title (the new
owner of the land).
• This method is particularly important where Section 78 of the
Law of Property Act 1925 (which automatically annexes the
benefit to the land) has been excluded.
 Passing of Benefit under Equity
Key Points to Note:
(1) The Covenant Must Protect Ascertainable Land:
• The covenant must have been created to protect specific, identifiable
land owned by the covenantee.
• The assignment of the benefit must occur at the same time as the
transfer of the dominant land (the land that benefits from the covenant).
• Case Example: In Newton Abbot Co-operative Society Ltd v Williamson
and Treadgold Ltd [1952], the court held that the dominant land did not
need to be explicitly identified in the conveyance, as long as it could be
reasonably inferred. However, if the dominant land had been far away
(e.g., a mile from the servient land), the outcome might have been
different, as the connection between the covenant and the land would
be less clear.
Newton Abbot Co-operative Society
Ltd v Williamson and Treadgold Ltd
[1952]
• In Newton Abbot Co-operative Society Ltd v Williamson
and Treadgold Ltd [1952] Ch 286, the court dealt with
the issue of whether the benefit of a restrictive
covenant (a promise not to do something on the land)
could be expressly assigned to a successor in title (a
later owner of the benefited land). This case is
significant for clarifying the requirements for the
assignment of the benefit of a covenant.
 Newton Abbot Co-operative Society
Ltd v Williamson and Treadgold Ltd
[1952]
• Key Facts:
• The case involved a restrictive covenant that prevented the
use of a property for the sale of "motor spirit" (petrol).
• The original covenantee (the person who benefited from the
covenant) sold the benefited land to the Newton Abbot Co-
operative Society.
• The new owner of the burdened land (the land subject to the
covenant), Williamson and Treadgold Ltd, began selling petrol
in breach of the covenant.
• The Newton Abbot Co-operative Society sought to enforce the
covenant against Williamson and Treadgold Ltd.
Legal Issue:
• The main question was whether the benefit of the covenant had been validly
assigned to the Newton Abbot Co-operative Society, allowing them to enforce it against
the new owner of the burdened land.
Court’s Decision:
• The court held that the benefit of the covenant had been validly assigned to the
Newton Abbot Co-operative Society, and they could enforce it against Williamson and
Treadgold Ltd. The court made the following key rulings:
[Link] for Assignment:
1. For the benefit of a covenant to be assigned, it must:
[Link] to identifiable land: The covenant must protect specific, identifiable land owned by the covenantee.
[Link] assigned contemporaneously with the transfer of the land: The assignment of the benefit must occur at
the same time as the transfer of the benefited land.
[Link] of the Benefited Land:
1. The court found that the benefited land was sufficiently identifiable from the deed, even
though it was not explicitly described in detail.
2. The deed referred to the land as "the property hereby conveyed," which was enough to identify
the land benefiting from the covenant.
[Link] Need for Incredible Detective Work:
1. The court emphasized that the benefited land does not need to be described with extreme
precision. As long as it can be reasonably identified, the assignment is valid.
2. The court noted that it did not require "incredible detective work" to identify the benefited land in
Newton Abbot Co-operative Society
Ltd v Williamson and Treadgold Ltd
[1952]
Significance:
• Clarification of Assignment Requirements: The
case clarified that the benefited land does not need to
be described in great detail in the deed, as long as it
can be reasonably identified.
• Practical Implications: The decision made it easier for
successors in title to enforce restrictive covenants by
allowing the benefit to be assigned without overly
technical requirements.
Passing of Benefit under Equity
(2) Assignment Does Not Annex the Benefit:
• An assignment does not permanently attach (annex)
the benefit of the covenant to the dominant land.
• Instead, a chain of assignments is required each time
the land is sold. Each new owner must explicitly assign
the benefit to the next owner.
• Case Example: In Re Pinewood Estate, Farnborough
[1958], the court emphasized that a chain of
assignments is necessary to pass the benefit of the
covenant.
Re Pinewood Estate, Farnborough
[1958]
• In Re Pinewood Estate, Farnborough [1958] Ch 280, the
court dealt with the issue of whether the benefit of a
restrictive covenant could be passed to a successor
in title through a chain of assignments. This case is
significant for clarifying the requirements for the
assignment of the benefit of a covenant and the
limitations of this method.
Re Pinewood Estate, Farnborough
[1958]
• Key Facts:
• The case involved a restrictive covenant that prevented the
use of land for purposes other than residential.
• The original covenantee (the person who benefited from the
covenant) sold the benefited land, and the benefit of the
covenant was assigned to the new owner.
• The land was subsequently sold multiple times, with each new
owner receiving an assignment of the benefit of the covenant.
• The current owner of the burdened land (the land subject to the
covenant) sought to argue that the benefit of the covenant had
not been validly passed to the current owner of the benefited
land.
Re Pinewood Estate, Farnborough
[1958]
• Legal Issue:
• The main question was whether the benefit of the
covenant had been validly passed through a chain of
assignments to the current owner of the benefited
land.
 Re Pinewood Estate, Farnborough
[1958]
Court’s Decision:
• The court held that the benefit of the covenant had not been validly passed to the current
owner of the benefited land because there was no direct assignment from the original
covenantee to the current owner. The court made the following key rulings:
[Link] of Assignments:
1. For the benefit of a covenant to be passed through a chain of assignments, each assignment in the chain
must be valid and complete.
2. If any link in the chain is missing or invalid, the benefit of the covenant cannot be passed to the final owner.
[Link] Direct Assignment:
1. In this case, there was no direct assignment of the benefit from the original covenantee to the current
owner.
2. Instead, the benefit had been passed through a series of intermediate owners, but the chain of assignments
was incomplete.
[Link] vs. Assignment:
1. The court emphasized that assignment is a different method from annexation (where the benefit is
permanently attached to the land).
2. Unlike annexation, which automatically passes the benefit with the land, assignment requires a specific
transfer of the benefit each time the land is sold.
Re Pinewood Estate, Farnborough
[1958]
Significance:
• Clarification of Assignment Requirements: The
case clarified that the benefit of a covenant cannot be
passed through a chain of assignments unless each
assignment is valid and complete.
• Limitations of Assignment: The decision highlighted
the limitations of using assignment to pass the benefit
of a covenant, as it requires careful documentation and
direct transfers.
Passing of Benefit under Equity
(3) Assignment of Part of the Dominant Land:
• Equity allows the benefit of a covenant to be assigned
with part of the dominant land, even if the covenant
was originally intended to benefit the whole of the land.
• Case Example: In Stilwell v Blackman [1968], the court
held that the benefit of a covenant could be assigned
when part of the dominant land was sold, as long as the
covenant was intended to benefit that part of the land.
 Stilwell v Blackman [1968]
Key Facts:
• The case involved a restrictive covenant that prevented the use of land for
purposes other than residential.
• The original covenantee (the person who benefited from the covenant) owned
a large piece of land (the dominant land) and sold part of it to the plaintiff,
Stilwell.
• The benefit of the covenant was assigned to Stilwell as part of the sale.
• The defendant, Blackman, owned the burdened land (the land subject to the
covenant) and sought to argue that the benefit of the covenant could not be
assigned with only part of the dominant land.
Legal Issue:
• The main question was whether the benefit of the covenant could be
assigned with part of the dominant land, even though the covenant was
originally intended to benefit the whole of the dominant land.
 Stilwell v Blackman [1968
Court’s Decision:
• The court held that the benefit of the covenant could be assigned with part of the
dominant land, even though the covenant was originally intended to benefit the whole
of the dominant land. The court made the following key rulings:
[Link] of Benefit with Part of the Land:
1. The benefit of a covenant can be assigned with part of the dominant land, provided that the
covenant was intended to benefit that part of the land.
2. The court found that the covenant in this case was intended to benefit the part of the land sold to
Stilwell.
[Link] of the Original Parties:
1. The court emphasized that the intention of the original parties is crucial in determining
whether the benefit of a covenant can be assigned with part of the dominant land.
2. If the original parties intended the covenant to benefit the whole of the dominant land, the benefit
can still be assigned with part of the land, as long as that part is within the scope of the original
intention.
[Link] Implications:
1. The decision made it easier for successors in title to enforce restrictive covenants when the
Significance:
• Clarification of Assignment Rules: The case clarified
that the benefit of a covenant can be assigned with part
of the dominant land, even if the covenant was
originally intended to benefit the whole of the land.
• Flexibility in Enforcement: The decision provided
greater flexibility for enforcing restrictive covenants
when the dominant land is divided.
 Passing of Benefit under Equity
Annexation:
1. Express Annexation:
• The original parties can explicitly state in the covenant that the
benefit is attached to the dominant land.
• The wording must clearly show an intention to benefit the land,
not just the original covenantee.
• Example: A covenant that refers to the land being benefited
(e.g., "for the benefit of Blackacre") is sufficient.
• Case Example: In Renals v Cowlishaw (1879), a covenant made
with the "heirs and assigns" of the covenantee was not
sufficient to annex the benefit to the land because it did not
mention the land itself.
Passing of Benefit under Equity
2. Implied Annexation:
• If the covenant does not explicitly state that the benefit
is annexed to the land, the court may infer this
intention from the wording of the deed or the
circumstances.
• Example: If the covenant clearly relates to the use or
value of the land, the court may infer that the parties
intended the benefit to pass with the land.
 Passing of Benefit under Equity
3. Statutory Annexation (Section 78 LPA 1925):
• For covenants created after 1925, Section 78 of the Law of Property Act 1925
automatically annexes the benefit of the covenant to the dominant land, provided
the covenant "touches and concerns" the land.
• Key Features:
• The benefit is annexed to each part of the dominant land, not just the whole. This means
that if the land is divided, each new owner of a part can enforce the covenant.
• The benefited land must be readily identifiable from the deed.
• Case Examples:
• Federated Homes Ltd v Mill Lodge Properties Ltd [1980]: The Court of Appeal confirmed that
Section 78 applies to covenants that touch and concern the land and that the benefit is
annexed to each part of the land.
• Crest Nicholson Residential (South) Ltd v McAllister [2004]: The court reaffirmed that Section
78 applies only if the benefited land is clearly identifiable in the deed.
• Roake v Chadha [1984]: The court held that the parties can exclude the operation of Section
78 by expressly or impliedly stating their intention to do so in the deed
Passing of Benefit Under Equity
4. Pre-1926 Covenants:
• For covenants created before 1926, Section 78 does
not apply, so express or implied annexation is
necessary.
• Case Example: In Sainsbury v Enfield Borough Council
[1989], the court confirmed that statutory annexation
under Section 78 does not apply to pre-1926 covenants.
 Passing of Benefit Under Equity
Scheme of Development
A scheme of development (or building scheme) is a legal
arrangement where a large area of land is divided into plots and
sold, with mutually enforceable covenants imposed on all
plots. This creates a kind of "local law" where:
• Each plot owner is bound by the covenants.
• Each plot owner can enforce the covenants against other plot
owners within the scheme.
• This is particularly useful in residential developments to maintain
uniformity and protect property values.
Passing of Benefit Under Equity
Key Conditions for a Scheme of Development:
• The classic conditions for a valid scheme of development were set
out in Elliston v Reacher [1908]:
[Link] Vendor: There must be a single seller (or developer) of all
the plots in the scheme.
[Link]-Planned Layout: The plots must be laid out in advance.
[Link] Restrictions: The covenants must be intended to benefit all
plots mutually.
[Link] of Mutual Enforcement: All buyers must know that
the covenants are mutually enforceable.
[Link] Defined Area: The area covered by the scheme must be
clearly defined (Reid v Bickerstaff [1909]).
 Passing of Benefit Under Equity
Modern Approach:
• In recent years, courts have taken a more relaxed approach to these
conditions, focusing on the intention of the original parties and the clarity
of the scheme. Key cases include:
• Baxter v Four Oaks Properties Ltd [1965]: A valid scheme existed even
though the plots were not pre-determined in size.
• Re Dolphin’s Conveyance [1970]: A scheme was upheld despite no common
vendor and plots being sold over 20 years.
• Emile Elias and Co Ltd v Pine Groves Ltd [1993]: The area of the scheme must
be fixed before plots are sold.
• Birdlip v Hunter [2016]: The conveyancing documents must clearly indicate
the existence of the scheme.
• Whitgift Homes v Stocks [2001]: Certainty is essential; if the boundaries of
Passing of Benefit Under Equity
Key Points:
[Link] is Crucial:
1. The area covered by the scheme and the mutual enforceability of
covenants must be clear.
2. Without certainty, the scheme may fail (Whitgift Homes v Stocks).
[Link] of Traditional Conditions:
1. Courts now focus on the intention of the parties and the practical
reality of the scheme, rather than strict compliance with Elliston v
Reacher conditions.
[Link]:
1. Restrictive covenants in a scheme must still be registered to be
enforceable against future owners.
Passing of Benefit Under Equity
Contracts (Rights of Third Parties) Act 1999:
• Under Section 1 of this Act, a third party (e.g., a
successor in title) can enforce a covenant if:
• The contract expressly provides that they can, or
• The contract purports to confer a benefit on them.
• This applies even if the covenant does not "touch and
concern" the land, as long as the third party is identified
(e.g., as "successors in title").
Passing the Burden of a Covenent
under Common Law
General Rule:
• The burden of a covenant (the obligation to comply
with it) cannot pass at common law to a successor in
title (a later owner of the burdened land).
• This rule is based on the principle that only parties to a
contract can be bound by it (Austerberry v Oldham
Corporation [1885] and Rhone v Stephens [1994]).
Passing the Burden of a Covenent
under Common Law
Why This Rule Exists:
• The rule prevents land from being indefinitely
fettered by obligations, which could make it difficult to
sell or use the land freely.
 Passing the Burden of a Covenent
under Common Law
Ways to Circumvent the Rule:
• Because the rule can be inconvenient, several methods have been developed to
enforce the burden of covenants indirectly:
[Link] Covenants:
1. If the land is transferred on a long lease, the burden of covenants can pass to the tenant under
leasehold covenant rules. The lease can later be converted to a freehold.
[Link] Arrangements:
1. In a commonhold development, covenants are enforceable against all owners within the
scheme.
[Link] Fee Simple:
1. The land can be transferred as a conditional fee simple, subject to a right of re-entry if the
covenant is breached.
[Link] of Mutual Benefit and Burden:
1. Under this doctrine (from Halsall v Brizell [1957]), if a person claims a benefit under a
conveyance (e.g., the right to use a road or drains), they must also accept the corresponding
burden (e.g., contributing to maintenance costs).
Passing the Burden of a Covenent
under Common Law
Limitations:
• The original covenantor (the person who made the
promise) remains liable for the covenant even after
transferring the land. However:
• The covenantee can only claim damages for breach of the
covenant, not specific performance (e.g., they cannot stop the
successor from breaching the covenant).
• The successor in title is not directly bound by the covenant
at common law.
Passing the Burden of a Covenent
under Common Law
Practical Implications:
• The rule makes it difficult to enforce positive
covenants (obligations to do something, like
maintaining a fence) against successors in title.
• However, the doctrine of mutual benefit and
burden and other methods provide some flexibility for
enforcing covenants indirectly.
 Passing the Burden of a Covenant
under Equity
The Common Law Rule:
• At common law, the burden of a covenant (the obligation to comply with
it) cannot pass to successors in title (later owners of the burdened land).
• This rule is based on the principle that only parties to a contract can be
bound by it.
Equity’s Role:
• Equity has softened this rule by allowing the burden of restrictive
(negative) covenants to pass to successors in title, provided certain
conditions are met.
• This principle was established in Tulk v Moxhay (1848), where Lord
Cottenham emphasized that without equitable enforcement, landowners
could not sell part of their land without risking the value of the remaining
land.
Tulk v Moxhay (1848) 47 ER 1345
• In Tulk v Moxhay (1848) 47 ER 1345, the court
established the principle that the burden of a
restrictive covenant (a promise not to do something
on the land) can run with the land in equity, even
though it cannot run at common law. This case is a
landmark decision in the law of restrictive covenants
and laid the foundation for the enforcement of such
covenants in equity.
 Tulk v Moxhay (1848) 47 ER 1345
• Key Facts:
• The case involved a piece of land in Leicester Square, London,
which was sold by Tulk to Elms in 1808.
• As part of the sale, Elms agreed to a restrictive covenant that
prohibited building on the land and required it to be kept as an
open space for the benefit of the surrounding properties.
• The land was later sold multiple times, and eventually, it was
purchased by Moxhay, who knew about the covenant but
intended to build on the land.
• Tulk, who still owned surrounding properties, sought to enforce
the covenant against Moxhay.
Tulk v Moxhay (1848) 47 ER 1345
Legal Issue:
• The main question was whether the burden of the
restrictive covenant could be enforced against
Moxhay, a successor in title to the original covenantor
(Elms), even though Moxhay was not a party to the
original agreement.
Tulk v Moxhay (1848) 47 ER 1345
Court’s Decision:
• The court held that the burden of the restrictive covenant could be enforced
against Moxhay in equity, even though it could not be enforced at common law. The
court made the following key rulings:
[Link] Enforcement of Restrictive Covenants:
1. The court established that restrictive covenants (which restrict the use of land) can be
enforced in equity against successors in title, provided certain conditions are met.
2. This is because it would be unfair to allow a successor in title to ignore a covenant that was
intended to benefit the land and was known to them at the time of purchase.
[Link] of the Covenant:
1. The court emphasized that Moxhay had notice of the covenant when he purchased the land,
which was a key factor in allowing the covenant to be enforced against him.
[Link] Rationale:
1. The court noted that if equity did not enforce such covenants, it would be "impossible for the
owner of land to sell part of it without incurring the risk of rendering what he retains worthless."
2. This principle ensures that landowners can control the use of their land and protect its value
Tulk v Moxhay (1848) 47 ER 1345
Significance:
• Foundational Case: Tulk v Moxhay is the foundational
case for the enforcement of restrictive covenants in
equity.
• Equitable Doctrine: The case established the doctrine
that the burden of a restrictive covenant can run with
the land in equity, provided the successor in title has
notice of the covenant.
• Protection of Land Value: The decision allows
landowners to protect the value and use of their land by
enforcing restrictive covenants against successors in
title.
Tulk v Moxhay (1848) 47 ER 1345
Conditions for Enforcement in Equity:
• Following Tulk v Moxhay, the burden of a restrictive
covenant can be enforced in equity if:
[Link] covenant is negative (restricts the use of the
land).
[Link] covenant touches and concerns the land (relates
to its use or value).
[Link] original parties intended the covenant to run with
the land.
[Link] successor in title has notice of the covenant
(actual, constructive, or imputed).
 Passing the Burden of a Covenant
under Equity
Requirements for the Burden to Run in Equity:
• For the burden of a restrictive covenant to pass to a successor in title, the following
conditions must be satisfied:
[Link] Covenant Must Be Negative:
1. It must restrict the use of the land (e.g., not to build on it or not to use it for business purposes).
[Link] Covenant Must "Touch and Concern" the Land:
1. It must relate to the use or value of the land (Swift Investments v Combined English Stores
[1989]).
[Link] Must Protect Land Retained by the Covenantee:
1. The covenant must benefit the dominant land (the land that benefits from the covenant).
[Link] Must Be Intended to Run with the Land:
1. The original parties must have intended the covenant to bind future owners.
[Link] Successor Must Have Notice of the Covenant:
1. The successor in title must be aware of the covenant, either through actual notice or registration.
Passing the Burden of a Covenant
under Equity
Positive Covenants:
• The burden of positive covenants (obligations to do something,
like maintaining a fence or paying for repairs) cannot pass to
successors in title, even in equity.
• This was confirmed in Rhone v Stephens [1994], where Lord
Templeman stated that enforcing positive covenants would
contradict the common law rule that only parties to a contract
can be bound by it.
• Example: In Rhone v Stephens, a covenant to maintain a roof in
good condition was held to be positive, so the burden did not
pass to the buyer of the house, leaving the adjoining cottage
owners without a way to enforce the covenant.
Passing the Burden of a Covenant
under Equity
Distinguishing Positive and Negative Covenants:
• Whether a covenant is positive or negative depends on
its substance, not its wording.
• Example: A covenant to "keep land as a wilderness" is
effectively a negative covenant (not to build on the
land), even though it is phrased positively.
• Generally, if a covenant requires spending money or
taking action, it is positive and its burden will not run
with the land.
Passing the Burden of a Covenant
under Equity
Practical Implications:
• Restrictive Covenants:
• The burden can pass to successors in title if the conditions in
Tulk v Moxhay are met.
• This makes restrictive covenants a valuable tool for protecting
land value and controlling land use.
• Positive Covenants:
• The burden cannot pass to successors in title, making them
harder to enforce over time.
• Alternative methods (e.g., leasehold covenants or the doctrine of
mutual benefit and burden) may be used to achieve similar
outcomes.
 Passing the Burden of a Covenant
under Equity
When Courts May Refuse to Enforce Restrictive Covenants:
• Courts may refuse to enforce a restrictive covenant in certain situations, such as:
[Link]:
1. If the person entitled to enforce the covenant has ignored repeated breaches by others,
they may be deemed to have abandoned the covenant.
2. Case Example: In Chatsworth Estates Co v Fewell [1931], the court found no
abandonment despite the covenantees’ inactivity, as they had not completely ignored the
breaches.
[Link] and Acquiescence:
1. If the covenantee delays enforcing the covenant, and the covenantor is lulled into a false
sense of security, the court may refuse an injunction and award damages instead.
2. Case Example: In Shaw v Applegate [1977], the court refused an injunction due to the
covenantee’s delay and awarded damages instead.
[Link] in Neighbourhood Character:
1. If the character of the neighbourhood has changed significantly, the covenant may be
 Passing the Burden of a Covenant
under Equity
Lands Tribunal’s Power to Modify or Discharge Covenants:
• Under Section 84(1) of the Law of Property Act 1925, the Lands Tribunal has the
power to modify or discharge restrictive covenants. This can happen if:
[Link] Covenant is Obsolete:
1. Due to changes in the neighbourhood or other circumstances, the covenant no longer serves its
original purpose.
[Link] Covenant Impedes Reasonable Use of the Land:
1. If the covenant prevents reasonable use of the land, and:
1. Money compensation is adequate, and
2. The covenant provides no practical benefit or is against the public interest.
[Link] of the Parties:
1. If all parties entitled to the benefit of the covenant agree to its modification or discharge.
[Link] Injury to Beneficiaries:
1. If the modification or discharge will not harm those entitled to the benefit of the covenant.
• The Lands Tribunal generally takes a restrictive approach and will not modify or
discharge a covenant simply because planning permission has been granted for a
Passing the Burden of a Covenant
under Equity
• Interaction with Planning Law:
• The Town and Country Planning Act 1990 (and its
predecessors) introduced public planning controls,
reducing the reliance on private covenants for
regulating land use.
• However, private covenants (both freehold and
leasehold) continue to operate alongside planning laws.
Passing the Burden of a Covenant
under Equity
Law Commission’s Proposed Reforms:
• In 2011, the Law Commission published a report recommending
significant reforms to the law of covenants. Key proposals include:
[Link] of Land Obligations:
1. A new type of obligation that would allow both positive and negative
obligations to be enforced by and against successors in title.
[Link] Creation and Registration:
1. Land Obligations would need to be expressly created and registered on
the titles of both the benefited and burdened land.
[Link] Response:
1. In 2016, the government announced its intention to implement some of the
Law Commission’s recommendations, though no major changes have yet
been enacted.
Commonhold
What is Commonhold?
• Commonhold is a form of property ownership introduced in
the UK in 2002.
• It allows individual units (e.g., flats, houses, or shops) within
a development to be owned as freehold, while the
common parts (e.g., hallways, gardens, parking areas) are
managed collectively by a commonhold association.
• This system is designed to address issues with leasehold
ownership, particularly in blocks of flats, by giving owners
more control and eliminating the risk of losing their property
due to leasehold terms.
 Commonhold
Key Requirements for Commonhold:
[Link]:
1. The land must be registered as a commonhold estate (s.1(1)).
2. The developer must start with a registered absolute freehold title, and all parties with an
interest in the land must consent to the conversion (ss.2(1) and 3).
[Link] Association:
1. A commonhold association (a private company) is created to manage the common parts of the
development.
2. The association is governed by a certificate of incorporation, memorandum and articles of
association, and a community statement (s.31), which sets out the rules and obligations for
managing the development.
[Link] Units:
1. There must be at least two units within the commonhold scheme (s.11).
[Link] of Units:
1. When the first unit is sold, the buyer becomes the registered owner, the commonhold association
becomes the owner of the common parts, and the developer retains ownership of unsold units.
2. Once all units are sold, the commonhold association takes full effect.
Commonhold
Management of Commonhold:
• The commonhold association is responsible for
managing the common parts of the development.
• The association is made up of the owners of the
individual units, who are also its members.
• The association has legal title to the common parts,
such as staircases, gardens, and hallways.
Commonhold
Reciprocal Obligations:
• A key feature of commonhold is that positive
covenants (e.g., obligations to maintain shared areas)
can be enforced and will run with the land.
• This means that when a unit is sold, the new owner
automatically takes on the obligations related to the
unit (s.16).
Commonhold
Advantages of Commonhold:
[Link] Ownership:
1. Owners have freehold title to their units, giving them greater security and
control compared to leasehold.
[Link] Risk of Losing Property:
1. Unlike leasehold, there is no risk of losing the property due to non-payment
of service charges (s.31(8)).
[Link]:
1. Units are freely transferable (ss.15 and 19), but long leases and subdivision
are not permitted (ss.17–22).
[Link] Management:
1. Owners have a say in the management of the development through the
commonhold association.
Commonhold
Termination of Commonhold:
• The commonhold association can be dissolved:
• By a unanimous resolution of its members (s.44).
• If 80% of members agree, a court application is required
(s.45).
Commonhold
Limitations:
• The requirement for consent from all interested
parties before converting to commonhold has made it
difficult for many existing leasehold developments to
adopt this system.
• Commonhold has not been widely adopted in the UK,
partly due to this requirement and the complexity of
transitioning from leasehold.