For a restrictive covenant to be enforceable by a successor in title, the benefit must have passed to the person trying to enforce it (by annexation, assignment, or by there being a building scheme) and it must:
- be restrictive;
- 'touch and concern the land'; and
the land benefiting from the covenant must be identifiable
Benefit Must Have Passed:
This often relates to the original drafting of the Covenant:
For instance, a recent case involved an 1896 covenant with ‘the vendors, their successors and assignees’ not to use land in a particular way ‘without the consent in writing of the vendors’. So, whilst the covenant was with successors in title, the clause said that consent had to be obtained from the vendors (with no mention of successors in title). The complication here was that the original vendor (with the benefit of the covenant) was a building society that had been dissolved in 1929. The question was whether the covenant still enforceable by the building society’s successors in title? The answer was ‘no’. Firstly, the 1896 document did not identify the land to which the covenant was annexed (ie the land that was supposed to benefit from the restrictions being imposed by the covenant). Thus, it was unenforceable. Secondly, the wording meant that the covenant was personal to the building society and could only be enforced by it (which meant the covenant became unenforceable when the building society was dissolved).
Cases of this sort always depend on their own facts. But, it is a useful illustration of the importance of checking that the land to be benefited is sufficiently identified (if only by implication), and also checking whether the covenant is personal to the original seller.
Another example is where a covenant said that any alterations to the building had to be approved by ‘the seller’. However, the seller had died and the question then arose as to whether his successors in title had the benefit of the covenant and so could enforce it. The document in question referred to ‘successors in title’ in some places, and in others did not. The court therefore placed a considerable importance on the fact that successors in title were not referred to in this particular clause and concluded that it was a covenant personal to the original seller (and so not enforceable by successors in title). (Margeson 2008).
‘Touching and Concerning the Land’
To 'touch and concern the land' the covenant must be imposed for the benefit of or to enhance the value of the land retained by the person with the benefit.
Section 78 of the Law of Property Act 1925 helps with interpretation by stating that the benefit of a covenant will be for all of the (retained) land unless there is a contrary intention.
It is also important to remember that a restrictive covenant has to be registered to be enforceable.
The person with the benefit of the covenant must have registered the benefit at the Land Charges Registry. However, this does not apply to new restrictive covenants where the transaction imposing the restrictive covenants itself requires compulsory registration.
Points to Consider When Determining Whether or Not a Restrictive Covenant is Enforceable:
When faced with a restrictive covenant there are, therefore, a number of issues to consider before a decision can be made as to whether the covenant affects the land, in particular:
- what is the extent of the land affected by the covenant;
- who has the benefit of the covenant;
- has the covenant been properly protected, if required, by registration under the Land Charges Act 1975;
- is it clear that the benefit of the covenant has passed to subsequent owners; and
- what does the covenant mean?
There have been a number of recent cases which help to clarify several important areas:
Does the Land Benefit?
In Crest Nicholson Residential (South) Ltd v McAllister , Crest Nicholson proposed to develop the rear gardens of a number of properties. The land had been sold by a common seller in the 1920s and 1930s. A restrictive covenant restricted each of the plots to a single private dwelling. The case concerned who had the right to enforce this covenant and whether the benefit of the covenant had been annexed to the land.
There were a number of conveyances to consider in which the wording was different. But it was held that s78 of the Law of Property Act 1925 was sufficient to annex the benefit of these rights to the retained land of the seller at the date of the conveyance.
Therefore, those falling within the retained land of the seller when the conveyances were created had the benefit of the covenants. Those which had been sold before the conveyances did not have the benefit. Furthermore, it was essential that the land with the benefit could be identified. If not, the covenant could not be enforced. The decision makes it clear that the land with the benefit of a restrictive covenant must be identified. To ascertain this, it will often be necessary to check the original documentation to ensure that the land with the benefit was clearly identified at the outset.
Interpreting the Meaning of the Covenant:
Two recent cases on interpretation are Martin v David Wilson Homes Ltd and also Jarvis Homes Ltd v Marshall.
Both of these cases concerned a restrictive covenant restricting the use of a property to 'a private residence' only.
In the Martin case, it was decided that the reference to 'a private dwelling house' in the covenant was not a restriction on numbers. The court held that the word 'a' is an article and not a number, and therefore did not impose a numerical restriction. In this respect, the court took a different line to the Crest Nicholson v McAllister case. It shows the importance of not just the drafting of covenants, but also their interpretation. Many will have interpreted the reference to 'a private dwelling house' to mean 'one private dwelling house', whereas the court did not.
In the Jarvis Homes case, land was bought by a developer subject to a restrictive covenant that the land was not to be used for more than 'one two-storey private dwelling house with outbuildings and garage'.
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