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Covenants: Types, Enforcing and their Relation to Conveyancing

This article explain covenants – its types, the manner in which they can be enforced with respect to their burden and benefits, etc.

Promises made within a deed are called covenants. When a person sells a part of his land, upon completion of the transaction, he causes the property to become two new parcels of land. Covenants are first imposed on such sales to determine the usage of these two lands.

Types of Covenants:

There are two types of covenants:

Positive Covenants:

such a covenant requires certain steps to be undertaken to ensure compliance with the promise.

Restrictive Covenants:

this type of covenant limits the use of land in a certain way and does not require any positive action to ensure compliance.

But the real test is the substance of the covenant and not its wordings. For instance, a covenant that requires the owner to ‘leave the land uncovered by buildings’ is still negative although the words do not indicate this. These words indicate that a person ‘should not build’ anything on the land and is hence an example of a restrictive covenant.

On the other hand, a covenant that asks a person to ensure the land ‘does not fall into disrepair’ is still positive as the substance of these words indicates that the person should keep the property in repair. Such a distinction is very important when enforcing freehold covenants.

Enforcing a Covenant:

It is a known fact that only original parties to the covenant can enjoy the benefits or face the burden of the covenant and the person who has the benefit of the covenant has the right to sue a person upon whom the burden of the covenant lies. But, the nature of land is such that it changes hands from one owner to the other. It is important to know about the fate of covenants when ownership changes. We shall understand the same by understanding the burden and benefits separately.

Burden:

Conventionally, the burden of a covenant does not run with the land and cannot be claimed against the successor of the land who has the benefit of the covenant. However, the ruling under Tulk vs. Moxhay (1848, 2, Ph. 774) lays down certain exceptions to this principle. Thus, the burden of a restrictive covenant can run with the land if:

  • The covenant touches the burdened land.
  • The covenant was entered to benefit the benefitted land.
  • The original parties to the covenant intended that the burden should run with the land and not intended it be a personal matter between themselves.
  • Subsequent owners of the land buy the property with ‘notice’ of the covenant. But this largely depends on the land; whether it is registered or not.

It is generally accepted that a well written covenant is one where the burden is intended to run with the land so as to affect its successors also.

Benefit:

Generally a covenant of benefit runs with the land. But in practice the burden of a positive covenant cannot run with the land and hence the issue is more of concern with restrictive covenants. Again, a well written covenant is one where the benefit is intended for each and every part of the land and runs with the successors in title.

Indirect Enforcement of Covenants:

Although it may not always be the case, the burden of a positive covenant does not run with the land and the burden of a negative covenant does, but on fulfillment of certain conditions. There are two ways through which the burden of positive and restrictive covenants can be indirectly enforced:

Indemnity Covenants:

Unless otherwise categorically stated, a person upon whom the burden of a covenant lies shall remain forever liable- even after he sells or has ceded the title to his land. Thus, he can be sued anytime for a breach committed by a successor. To protect himself from such an eventuality, it is advised that he should obtain an indemnity covenant from the new owner. As a result of such an indemnity covenant, the new owner also becomes liable for a breach of covenant.

If a breach occurs in the future, and the original covenantor is sued, he can always sue the new owner under the indemnity. Even if the new owner cannot be sued, the threat of being made to pay under the indemnity will indirectly compel him to comply with the terms of the covenant.

When the new owner sells the title to his land, he in turn obtains another indemnity covenant from his successor. Thus, every successor indemnifies his predecessor. What follows is a chain of indemnity covenants. Such a practice is cumbersome and may cause the original covenantor to slip without a trace.

Such an inconvenience can be avoided by limiting the liability of the original covenant to the period of ownership. However, this solution is not common and may not be acceptable to the original covenantee, especially in situations where a positive covenant is sought to be enforced.

Who Claims the Benefit Must Submit the Burden:

It is a generally accepted rule in common law that a person who claims the benefit of a covenant must also submit to the burdens associated with such a benefit. This was illustrated in Halsall vs. Brizell [1957], Ch. 169. In this case, an easement of way over roads in a housing estate was given to the owner, along with a positive covenant that he shall contribute towards the maintenance of the road. It was decided that the subsequent purchaser was bound by the burden (in respect of maintenance).

For a burden of positive covenant to be enforced on subsequent purchasers it is important that the burden is associated with the benefit enjoyed.

Covenants and their relation to Conveyancing:

The existence of covenants shall have a two way impact on a transaction;

  • the buyer will have to make sure that the terms of the covenant do not interfere with his plans.
  • the buyer will also have to make sure that the property has the benefit of all covenants applicable to the land.

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