This advice will address how Jarman can achieve his wishes to impose certain obligations on the bungalow he is selling to Derek, and to ensure these obligations are binding on future owners. The central legal issue is the enforceability of freehold covenants against successors in title. This will involve analysing each of Jarman’s requirements to determine whether they create positive or restrictive covenants, and then applying the relevant legal rules to see if the burden of these covenants can 'run with the land'.
The Law of Freehold Covenants
A freehold covenant is a promise made in a deed by one landowner (the covenantor) to another landowner (the covenantee), which affects their respective lands. Jarman, as the seller of the bungalow and owner of the retained house, will be the covenantee. Derek, as the buyer of the bungalow, will be the covenantor. The land owned by Derek (the bungalow) will be the 'burdened land', and the land retained by Jarman (the house) will be the 'benefited land'.
A key distinction in the law of covenants is between restrictive and positive covenants. A restrictive (or negative) covenant prevents the covenantor from doing something on their land, such as building a structure. A positive covenant requires the covenantor to take action, which usually involves spending money or effort, such as maintaining a fence. This distinction is crucial because the rules on enforceability against future owners differ significantly between the two.
While covenants are always enforceable between the original parties (Jarman and Derek) under the law of contract, the main challenge is ensuring they are enforceable by and against their successors in title. For Jarman's wishes to be fully achieved, the 'burden' of the covenants must pass to future owners of the bungalow, and the 'benefit' must pass to future owners of his house.
The Burden of the Covenants
The primary issue for Jarman is whether the burden of his desired obligations will bind future purchasers of the bungalow. The rules for the running of the burden are different at common law and in equity.
At common law, the burden of a covenant, whether positive or negative, cannot run with the land to bind successors in title. This rule was established in Austerberry v Oldham Corporation (1885) and confirmed by the House of Lords in Rhone v Stephens [1994]. This immediately creates a problem for any positive obligations Jarman wishes to impose.
In equity, however, the burden of a restrictive covenant can run with the land if the conditions established in Tulk v Moxhay (1848) are met. These are:
- The covenant must be restrictive (negative) in substance.
- The covenant must ‘accommodate’ (or 'touch and concern') the benefited land.
- The original parties must have intended the burden to run with the land.
- The successor in title to the burdened land must have notice of the covenant.
We can now apply these rules to each of Jarman’s specific requirements.
(c) Not to build on the front garden
This is the most straightforward of Jarman's wishes. A covenant "not to build on the front garden of the bungalow" is clearly restrictive in nature, as it prohibits an action. To make this enforceable against future owners, Jarman must ensure the Tulk v Moxhay conditions are satisfied.
First, the covenant is negative. Second, it must 'accommodate' Jarman's house. This means the covenant must benefit the land itself, not just Jarman personally. A promise not to build on an adjacent garden, which would preserve a sea view from the house, clearly enhances the value and amenity of the house as a property. This satisfies the test in P&A Swift Investments v Combined English Stores Group [1989]. Third, the parties must intend for the burden to run. This can be stated expressly in the transfer deed. If not, section 79 of the Law of Property Act 1925 (LPA 1925) implies such an intention unless the deed states otherwise. Finally, for the burden to bind a future purchaser of the bungalow, they must have 'notice'. Since the bungalow is registered land, Jarman must protect the covenant by entering a notice on the charges register of the bungalow's title at the Land Registry, as per section 32 of the Land Registration Act 2002.
Advice: If Jarman drafts this as a restrictive covenant in the transfer deed to Derek and protects it by entering a notice on the register for the bungalow, the burden will run in equity and bind all future owners.
(a) Pruning the hedge and (b) Paying for road maintenance
These two requirements are more problematic. Both require the owner of the bungalow to take positive action: to actively prune the hedge and to spend money on road maintenance. As such, they are positive covenants.
As established in Austerberry, the burden of positive covenants does not run at common law. It also does not run in equity (Haywood v Brunswick Permanent Benefit Building Society (1881)). Therefore, these covenants will not be directly enforceable against any future purchaser of the bungalow after Derek. Jarman could sue Derek for a breach by a successor, but this is an unsatisfactory remedy.
However, there are indirect ways to secure the performance of positive covenants. The most relevant method for Jarman is the doctrine of mutual benefit and burden. This principle, from Halsall v Brizell [1957], states that a person who chooses to take the benefit of a right given in a deed cannot refuse to accept the corresponding burden that was intended to be linked to that benefit.
Applying this to requirement (b), paying for the shared road, is quite effective. Jarman will grant Derek (and his successors) a right of way (an easement) over the shared private road. The transfer deed should link this right to the obligation to contribute to the road's maintenance costs. A future owner of the bungalow cannot use the road (the benefit) and then refuse to pay for its upkeep (the burden). The House of Lords in Rhone v Stephens confirmed this principle but stressed that the benefit and burden must be closely related. Here, the use of the road and the cost of its maintenance are directly linked, so the doctrine should apply.
Applying the doctrine to requirement (a), pruning the hedge, is much more difficult. For the doctrine to work, there must be a corresponding benefit which the successor can choose to take. It is not clear what benefit a future owner of the bungalow would be taking in return for the burden of pruning the hedge. Unlike the road, they cannot be excluded from a benefit if they fail to perform the burden. Therefore, it is unlikely that the Halsall v Brizell principle could be used to enforce the hedge-pruning covenant.
Another, less direct method is to create a chain of indemnity covenants. Jarman would make Derek promise to require any future purchaser from him to enter into a direct covenant with Jarman (or his successors), or to promise to observe the original covenant and to indemnify Derek if they fail to do so. This creates a chain of personal promises. However, this is a weak mechanism; the chain can be broken if a seller forgets to include it, and enforcement depends on being able to find and sue the original covenantor (Derek).
Advice: The obligation to pay for road maintenance (b) can likely be made to bind successors by using the doctrine of mutual benefit and burden, by linking it in the deed to the right to use the road. The obligation to prune the hedge (a) is a positive covenant whose burden will not run, and it is unlikely to be enforceable against successors through indirect means.
The Benefit of the Covenants
Jarman also wants the covenants to be enforceable by "anybody it might be sold to in the future". This means the 'benefit' of the covenants must run with his land (the house).
The benefit of both positive and restrictive covenants can run at common law or in equity. The simplest method to ensure the benefit runs is through statutory annexation under section 78 of the LPA 1925. As interpreted in Federated Homes Ltd v Mill Lodge Properties Ltd [1980], this section has the effect of automatically 'annexing' the benefit of a covenant to the covenantee's land, provided the land intended to benefit is identifiable in the deed.
Advice: To ensure his successors can enforce the covenants, Jarman should ensure that the transfer deed to Derek clearly identifies his retained land (the property with the house) as the land which is intended to be benefited by the covenants. This will annex the benefit to the land, allowing any future owner of the house to enforce the covenants.
Conclusion
In summary, Jarman can be advised as follows:
- The covenant not to build on the front garden (c) can be made fully effective against Derek and all his successors in title. This should be drafted as a restrictive covenant in the transfer deed and protected by the entry of a notice on the bungalow’s title at the Land Registry.
- The covenant to contribute to the maintenance of the shared road (b) is a positive covenant and its burden will not run directly. However, it can be made indirectly enforceable against successors through the doctrine of mutual benefit and burden. The transfer deed must clearly grant the right to use the road and link it to the obligation to contribute to its maintenance.
- The covenant to prune the hedge (a) is also a positive covenant, and it will be very difficult to make this binding on successors in title. The doctrine of mutual benefit and burden is unlikely to apply, and other methods like a chain of indemnity are unreliable. Jarman must be advised that this obligation will likely only be enforceable against Derek personally.
To ensure that future owners of his house can enforce these obligations, Jarman must ensure the land to be benefited is clearly identified in the transfer deed, which will annex the benefit of the covenants to his property.
References
Austerberry v Oldham Corporation (1885) 29 Ch D 750
Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594
Halsall v Brizell [1957] Ch 169
Haywood v Brunswick Permanent Benefit Building Society (1881) 8 QBD 403
P&A Swift Investments v Combined English Stores Group [1989] AC 632
Rhone v Stephens [1994] 2 AC 310
Tulk v Moxhay (1848) 2 Ph 774
Legislation
Land Registration Act 2002
Law of Property Act 1925
