LLB220 Lecture 12: Week 12 – Restrictive Covenants
Week 12 – Restrictive Covenants
• Restrictions created by private entities
• Like leases and easements, this involves the intersection of property and contract
• When do contractual arrangements between the parties gain the status of property
rights (binding successive owners)?
Terminology
• Covenant → some form of promise/obligation undertaken
• Covenants may be:
- Positive → a promise to do something
- Negative → a promise not to do something
• Covenantor → person making the promise (has burden)
• Covenantee → the person to whom the promise is made (has benefit)
A Covenantee
(benefit of covenant)
B Covenantor
(burden of covenant)
A Covenantee
(benefit of covenant)
B Covenantor
(burden of covenant)
B1 Successor in title
to Baz
A1 Successor in title
to Ann
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Enforceability of Covenants
What rules apply depend on whether:
• Enforcement is in law or in equity
• Enforcement is of the burden or the benefit of the covenant
• Covenants are always enforceable between the original parties (covenantor and
covenantee) because their relationship is contractual
• Issue is enforcement against successors in title
Substantive Requirements for 4 Scenarios
Original Covenantor
Successor to Covenantor
Original
Covenantee
1.
Covenant enforceable due to privity
of contract
3.
The burden of the covenant does not run at law.
Ask: Does it run in equity?
Successor to
Covenantee
2. Ask:
Does the benefit of the covenant run
at law?
4.
The burden of the covenant does not run at law
Ask: Does it run in equity?
Also, does the benefit run in equity?
The Benefit of the Covenant: At Law
• At law – express assignment of benefit (s 12 CA)
• OR benefit of the covenant can run with the land → sometimes being called
aeed to the lad – without express assignment
• Only need to consider whether the benefit of a covenant runs at law
- Where successor in title to the covenantee seeks to enforce against the original
covenantor AND
- The covenantees successor in title has a legal interest
Benefit is Annexed if:
1. The covenant touches and concerns the land
- The covenant must benefit the land (not be a personal benefit). Means: 1) better
enjoyment; or 2) enhanced value
- The oeat ust either affet the lad as regards to the ode of use or
oupatio of the lad or the alue of the lad Rogers v Hosegood [1900])
- Question of fact
- Benefit to the land is assessed at the time covenant created
2. Intention that the benefit of the covenant run with the land
- Parties to the original covenant must have intended covenant annex to the land
→ assessed at time of creation of the covenant
- Common law – requires words of annexation
Words indicating that the land was to benefit
Benefits successors in title to covenantee
Benefits land
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- Altered by statute → CA s 70(1)
Section has been called a statutory annexation of covenant to the land
benefitted
Presumption can be rebutted by intention to contrary in the instrument
Coeat a e efored a oupier of the lad
3. Benefited land is identifiable
- At common law can be identified in the instrument or by extrinsic evidence
- CA s 881, istruet reatig oeat ust learl idiate eefited lad
- See text at [13.7]
4. Successor in title to the covenantee obtains a legal estate
- If the successor in title obtains an equitable estate, must consider whether the
benefit runs in equity
- Old System – requires Deed
- Torrens title – requires registration
Benefited Land:
• Land must not be too large to be reasonably benefited by covenant
- Question of fact, depends on the nature of the land and the nature of the
covenant
- If the eefited lad is too large, o poer i ourt to seer. Beefit ill ot
flow with the land
• Distance between land benefited and land burdened may mean land not reasonably
benefitted
• Land must be identified
- At common law, could be identified from surrounding circumstances
- CA s 881, istruet reatig oeat ust learl idiate eefited lad
• Subdivision
- Presumption that covenant is only for the benefit of the land as a whole –
subdivision destroys covenant
- However, can be rebutted re surrounding circumstances (i.e. nature of land and
covenant)
S 70(1)
A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and the
covenantee's successors in title and the persons deriving title under the covenantee or them, and shall have effect
as if such successors and other persons were expressed
For the purposes of this subsection in connection 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.
find more resources at oneclass.com
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Document Summary
Terminology: covenant some form of promise/obligation undertaken, covenants may be: Positive a promise to do something. Negative a promise not to do something: covenantor person making the promise (has burden, covenantee the person to whom the promise is made (has benefit) Covenant enforceable due to privity of contract: ask: The burden of the covenant does not run at law. Where successor in title to the covenantee seeks to enforce against the original covenantor and. The covenantees successor in title has a legal interest. Benefit is annexed if: the covenant touches and concerns the land. The covenant must benefit the land (not be a personal benefit). Means: 1) better enjoyment; or 2) enhanced value (cid:862)the (cid:272)o(cid:448)e(cid:374)a(cid:374)t (cid:373)ust either affe(cid:272)t the la(cid:374)d as regards to the (cid:373)ode of use or o(cid:272)(cid:272)upatio(cid:374) of the la(cid:374)d or the (cid:448)alue of the la(cid:374)d(cid:863) (cid:894)rogers v hosegood [1900])
