LAND LAW 2.12 RESTRICTIVE COVENANTS
Ordinarily, a covenant is an agreement under seal in which one party (the covenantor) promises another (the covenantee) that he will (positive covenant) or will not (negative covenant) engage in a specified activity in relation to the defined area of land.
A positive covenant imposes an obligation to do a specified thing while a negative covenant imposes an obligation not to do a specified thing in relation to the land. A positive covenant requires the covenantor to “put his hand in his pocket”-Fornby V Baker i.e. spend to fulfil.
The covenant is enforceable between the covenantor and covenantee whether or not it touches the land. However, where a third party is involved the following applies:
:: AT COMMON LAW: the covenant can be enforced if (the following are met):
- It touches and concerns an identifiable land.
- The covenantee must have legal estate in the land benefitted… so also must the assignee.
- There must have been an intention (when covenanting) that the benefit should run with the land.
The burden of a covenant does not run at common law except it amounts to an easement-Jones V Price. Smart conveyancers apply the following conveyancing tricks: -they create a lease (instead of selling) and then take a covenant of indemnity from the purchaser thus creating a chain of indemnity.
:: IN EQUITY: both burden and benefit may be enforceable against a party with notice-Tulk V Moxhay. In this case, the court held that the covenant to “keep the land uncovered… in a neat and ornamental state” was enforceable against the defendant (a third party) who had notice of the covenant… it granted an injunction to restrain the defendant from violating the covenant. As Lord Cottenham noted that the question is not whether the covenant ran with land but whether the party had notice of the covenant at the time of acquiring the land.
For Restrictive Covenant in Equity, the following must be noted:
- The covenant must be negative or restrictive rather than positive-Haywood V Brunswick Permanent Benefit Building Society. Positive requires expenditure of money.
- The covenant must accommodate the dominant tenement-London County Council V Allen: the courts have required that the benefitted land be sufficiently close to the burdened land to enjoy benefit of the covenant.
- The covenant must have been intended to run with the covenantor’s land-Rosanwo V Sarkis.
- The covenantee should own an adjacent land or one capable of being protected by the covenant-London County Council V Allen
- The covenant must touch and concern the land.
- The burden runs only in equity. Thus only equitable remedies are available for it to be enforced. In consequence, a bona-fide purchaser of the legal estate without notice is not bound. A squatter is not protected-Re-Nisbet and Potts Contract. Section 193 PCL.
Remedies for breach of restrictive covenant: damages, injunction, specific performance (where the covenant is positive). No breach where the land is compulsorily acquired for authorized purpose.
Discharge of Restrictive Covenant: Where the benefitted and burdened land come into common ownership, the covenant can be discharged. Can also be discharged by mutual agreement in writing between the parties to discharge the covenant.