covenants running with land

7/24/2019 Covenants Running With Land

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UNIVERSITYOFPETROLEUM& ENERGYSTUDIESCOLLEGEOFLEGALSTUDIES

B. A. L.L. B (HONS.)- A

SEMESTER-V

ACADEMICYEAR: 2015-16 SESSION: AUG-

DECEMBER

PROJECT

Covenants Runnin !it" t"e Lan#

FORP$o%e$t La!

Un#e$ t"e Su%e$vision o'( M$s) S"i*"a Di+$i

NAME( DIVYANS,UGUPTA

SAPNO(.../0123ROLLNO(R1./24.1.


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INDEX

INTRODUCTION.3.

REAL COVENANTS6.

RESTRICTIVE COVENANTS/

COVENANTS RUNNING WITH THE LAND..9.

CASE STUDY..22.

CONCLUSION....23.


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INTRODUCTION

Covenan

An agreement, contract, or written promise between two individuals that frequently constitute

s a pledge to do or refrain from doing something.

The individual making the promise or agreement is known as the covenantor, and the individ

ual to whom such promise is made is called thecovenantee.

Covenants are really a type of contractual arrangement that, if validly reached, is enforceable

by a court. They can be phrased so as toprohibit certain actions and in such cases are sometim

es called negative covenants.

There are two major categories of covenants in the law governing real property transactions:

covenants running with the landand covenantsfor title.1

Covenan! R"nn#n$ %#& &e Lan'

A covenant is said to run with the land in the event that the covenant is annexed to the estate

and cannot be separated from the land or theland transferred without it. uch a covenant exist

s if the original owner as well as each successive owner of the property is either subject toits

burdenor entitled to its benefit.A covenant running with the land is said to touch and concer

n the property. !or example, an individualmight own property subject to the restriction that itis only to be used for church purposes. "hen selling the land, the person can only do soupon

an agreement by the buyer that he or she, too, will only use the land for church purposes. The

land is thereby burdened or encumbered by a Re!(#)#ve

Covenan, since the covenant specifically limits the use to which the land can be put. #n addit

ion, the covenant runs withthe land because it remains attached to it despite subse$uent chang

es in its ownership. This type of covenant is also called a covenantappurtenant.

1%egaldictionary.com
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Certain &A&'&(Talso run with the land. An easement, for example, that permits one lando

wner to walk across a particular portion of theproperty of an adjoining landowner in order to

gain access to the street would run with the land. ubse$uent owners of both plots would take

the land subject to such easement.

A covenant in grossis unlike a covenant running with the land in that it is personal, binding o

nly the particular owner and not the land itself. Asubse$uent owner is not re$uired to keep the

promise as one would with a covenant appurtenant.

Covenan! *o( T#+e

"hen an individual obtains title to, or possession and ownership of, real property, six covena

nts are ordinarily afforded to him or her. Theyare )*+ covenant for seisin )-+ covenant of the r

ight to convey )+ covenant against encumbrances )/+ covenant for,"#e

En-oen )0+covenant of generalWa((an and )1+ covenant for further assurances.

A deed to real property that provides for usual covenantsgenerally includes the first five of th

ese covenants. "hen a deed provides forfullcovenants, it is regarded as giving such protectio

n as is extended pursuant to all six covenants.

Covenants for seisin and of the right to convey are ordinarily regarded as being the same thin

g. &ssentially, they make a guarantee to thegrantee that the grantor is actually the owner of th

e estate that he or she is transferring.

The covenant against encumbrances promises to the grantee that the property being conveyed

is not subject to any outstanding rights orinterests by other parties, such as mortgages, liens, e

asements, profits, or restrictions on its use that would diminish its value. Theexistence of 0on

#n$restrictions do not constitute breach of this covenant however, the existence of a violatio

n of some type of 2oning orbuilding restriction might be regarded as a breach thereof.

The covenants of $uiet enjoyment and general warranty both have the legal effect of protectin

g the grantee against all unlawful claims ofothers, including the grantor and third parties, who

might attempt to effect an actual or constructive eviction of the grantee.

The sixth covenant, which is the covenant for further assurances, is not widely used in the 3n

ited tates. #t is an agreement by the grantor toperform any further necessary acts within his o

r her ability to perfect the grantee4s title.
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The first three covenants of title ordinarily do not run with the land, since they become perso

nal choses in action5rights to initiate a lawsuit5if breached upon delivery of the deed. The

others are covenants appurtenant or run with the land and are enforceable by all grantees of th

eland.

#n order to recover on the basis of a breach of a covenant of title, financial loss must actually

be sustained by the covenantee, since suchcovenants are contracts of indemnity. #n most juris

dictions, the maximum amount of damages recoverable for such a breach is the purchaseprice

of the land plus interest.

1"(o!e!

%and use planning is often effected through the use of covenants. Covenants facilitate the cre

ation of particular types of neighborhoods aspart of a neighborhood plan.A housing develope

r might, for example, buy up vacant land to divide into building lots. A low price is paid for t

heundeveloped land, which the developer subse$uently sells burdened with a number of restri

ctive covenants. The developer might stipulate inthe contract of sale that the owner must retai

n the original si2e of a lot. 6evelopers can also make owners agree that houses to beconstruct

ed upon the lots must be larger than a certain si2e and include other specifications to ensure t

hat such property will more than likelysell for premium prices because of the desirability of t

he neighborhood. Courts enforce such covenants provided they benefit and burden allthe prop

erty owners in a neighborhood e$ually.

Covenants will not, however, be enforced if they are intended to accomplish an illegal purpos

e. The upreme Court ruled in Shelley v.Kraemer, / 3.. *, 17 . Ct. 71, 8- %. &d. **1* )

*8/7+, that no court or state officials have the power under law to take any action towardthe e

nforcement of a racial covenant.#n this case, a group of neighbors were bringing suit to prohi

bit a property owner from sellinghis hometo blacks, based on the argument that the owner ha

d purchased the home subject to the restrictive covenant not to sell to blacks. Thecovenant wa

s found to be unenforceable based on e$ual housing laws. To enforce it would constitute a C#

v#+ R#$&!violation.
http://legal-dictionary.thefreedictionary.com/Civil+Rightshttp://legal-dictionary.thefreedictionary.com/Civil+Rightshttp://legal-dictionary.thefreedictionary.com/Civil+Rightshttp://legal-dictionary.thefreedictionary.com/Civil+Rights


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REAL COVENANTS

5"at A$e Rea6 Covenants7

9eal Covenants are promises that concern the use of land. They can either be an affirmative

promise to do something with the land )e.g. build a front gate+ or a negative promise to not do

something )e.g. not use the land for public events+. 9eal Covenants consist of two elements:

the burden and the benefit.

5"at Is t"e 8u$#en o' a Rea6 Covenant7

The burden of a real covenant describes the promissor4s duty to perform the promise. !or

example, suppose A owns a lake near 4s house. #f A promises not to use the lake for

commercial purposes )e.g. sell lake usage to fishermen+, A now has a duty to honor his

promise to . #n this case, the ;burden; is A4s inability to use his lake for commercial

purposes.

5"at Is t"e 8ene9t o' a Rea6 Covenant7

The benefit of a real covenant describes the promisee4s right to enforce the promise. 3sing

the same example above, has the right to enforce A4s promise. The ;benefit; here is 4s

power to limit what A does with his land, which in this case is preventing commercial use of

the lake.

5"at ,a%%ens to a Rea6 Covenant 5"en t"e Lan# is

So6# to So+eone E6se7

&ven if the land changes ownership, it4s still possible for a real covenant to remain. A key

feature of real covenants is their ability to run with the land. #n other words, whoever owns

the land can be forced to honor a previously made real covenant. ut in order for either the

burden or the benefit of a real covenant to run, a few re$uirements must be met.

5"at Is Nee#e# 'o$ t"e 8u$#en o' a Rea6 Covenant to

Run7

There are five re$uirements that must be met before the burden of a real covenant can run:


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o(: The real covenant must be in some form of writing )e.g. contract, clause, or a separate

document+

Inen: The original promissor and promisee must have intended for the burden stating, ;# promise > to build a picket fence

around my farm.; ?ere, the promise is directed solely to >. #n contrast, suppose = says, ;#

promise to build a picket fence around my farm.; ?ere, the promise is not directed at a

particular person, and therefore it4s possible that the promise was meant to run.

To")& an' Con)e(n: The real covenant must relate to direct use or enjoyment of the land.

Ho(#4ona+ 1(#v#: This refers to a special relationship that exists between the original

promisor and the promisee, which can vary from state to state.

Ve(#)a+ 1(#v#: The person being burdened by the promise must own theEXA!same

piece of land as the promisor under the original real covenant.

5"at Is Nee#e# 'o$ t"e 8ene9t o' a Rea6 Covenant to

Run7

#n order for the benefit of a real covenant to run, four re$uirements are needed. The first

three are the same *o(, #nen, and o")& an' )on)e(nre$uirements necessary for the

burden of a real covenant to run. The last re$uirement, ve(#)a+#, only re$uires that the

person enforcing the benefit own some piece of the land owned by the promisee under the

original real covenant.

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Se)#on 5 #n T&e T(an!*e( o* 1(oe( A)7 82

urden of obligation imposing restriction on use of land.5"here, for the more beneficial

enjoyment of his own immoveable property, a third person has, independently of any interest

in the immoveable property of another or of any easement thereon, a right to restrain the

enjoyment *in a particular manner of the latter propertyB, or r of obligation annexed to

ownership but not amounting to interest or easement.5"here a third person is entitled to the

benefit of an obligation arising out of contract and annexed to the ownership of immoveable

property, but not amounting to an interest therein or easement thereon, such right orobligation may be enforced against a transferee with notice thereof or a gratuitous transferee

of the property affected thereby, but not against a transferee for consideration and without

notice of the right or obligation, not against such property in his hands. #llustration A

contracts to sell ultanpur to . "hile the contract is still in force he sells ultanpur to C,

who has notice of the contract. may enforce the contract against C to the same extent as

against A.

O( o* o:+#$a#on anne;e' o o%ne(! :" no ao"n#n$ o #ne(e! o( ea!een.Se)#on 5?

2. Covenan! R"nn#n$ %#& &e Lan'


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3. Con(a)"a+ O:+#$a#on! Anne;e' o O%ne(!

RESTRICTIVE COVENANTS:

COVENANTS RUNNING 5IT, T,E

LAND

A covenant affecting land is restrictive if it restricts the doing of something to, on, over or

under land or in relation to an estate or interest in land

(ormally, a restrictive covenant is contained in a deed conveying land, although there is

nothing to prevent a restrictive covenant from being created by a separate document. At first

glance, one might ask why this subject is being included in a course on ;Dractical Droperty;,

since the above description of a restrictive covenant appears to rest on contractual rather than

property principles.

#f A conveys land to , and in the deed , in consideration of the conveyance, agrees not to

use the land for purposes other than residential purposes, does not the usual re$uirement of

privity of contract apply, and if this re$uirement is not met, can it not be said that A only has aremedy against if breaches this covenant, unless there is a voluntary assumption of

liability for its breach by 4s successors in title to the landE

This was the case until *7/7 when Tulk v. 'oxha )*7/7+/,was decided. 3ntil that time, it

was possible for A, who had the benefit of the covenant, to assign the benefit of the covenant

to the purchaser when he sold the property, but, in the absence of a voluntary assumption of

liability on the covenant by subse$uent purchasers of the land the benefit of the covenant

would be practically useless, the covenant being designed, as it was, to enhance the value of

the property retained by A by restricting the use of the neighbouring property originally

conveyed to .

3&lphinstone @Covenants Affecting %and, page 0.

4/* &.9.**/


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;A restrictive covenant is a contract between two neighbouring land owners by which the

covenantee, anxious to maintain the saleable value of his property, ac$uires the right to

restrain the covenantor from putting his land to certain specified uses.; 0

At common law, therefore, the purchaser of a property, the use of which was restricted by

covenant, could, with full knowledge of the covenant, purchase the property and ignore the

restriction, and nevertheless be free from all liability for its breach, and, by the same token,

the person who made the covenant could sell the property in $uestion the next day at a profit

and free from the restriction. As a result, the courts of e$uity intervened in Tulk v. 'oxhay 1

#n that case, the covenant under consideration was a covenant by the purchaser of property

which included %eicester $uare to maintain %eicester $uare as a garden. A successor in title

to the purchaser cleared the entire area of vegetation and the original covenantee brought an

action against him to restrain this breach of the covenant. The court pointed out how

ine$uitable the result would be if the covenantee was left without a remedy when it said, F:

; ....nothing could be more ine$uitable than that the original purchaser should be able to sell

the property the next day for a greater price in consideration of the assignee being allowed to

escape from the liability which he had himself undertaken.; The Court, in this case, treated

the covenant not only as a contract but also as an interest in real property appurtenant to the

land owned by the covenantee, or the person having the benefit of the covenant originally,

which burdens or encumbers the title to the land owned by the person who originally gave the

undertaking under the covenant. 9estrictive covenants which benefit land and burden other

land, therefore, are akin to easements, since there must be both a dominant tenement, that is,

the land to be benefited, and a servient tenement, that is, the land to be burdened.

?owever, in order for a restrictive covenant to have this effect, certain conditions must be

met.

These conditions are correctly described as follows:7

56. G. 6onahue, Conveyancer4s Huide to 9eal &state Dractice in ntario, at pages F-@F,

6supra.

Tulk v. 'oxhay, page **//

!page 0- of &lphinstone @ Covenants Affecting %and


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)a+ The intention of the parties that the benefit of the covenant should be capable of passing

with the land to be benefited, must appear from the instrument creating the covenant

)b+ the covenant must have the object of protecting land which, at the date of the covenant

belongs to, and after the date of the covenant, is retained by, the covenantee

)c+ at the dates of the covenant and of the conveyance or assignment and at the date of the

breach complained of, the covenant must be capable of protecting the land intended to be

protected and

)d+ the land intended to be protected must be described by the instrument creating the

covenant so as to be ascertainable with reasonable certainty. The covenant must also be

negative in substance: 8

%et us examine each one of these characteristics more closely. The first characteristic, that is,

the characteristic that the parties intended that the benefit and burden of the covenant should

be capable of passing with the title must appear either expressly or by implication in the

document creating the covenant. #n order for a covenant to have the second characteristic,

that is, have the object of protecting land, it must ;touch or concern; the land.

;Adopting the definition of =a#+e7 @.7 #n Con$+eon Co(o(a#on v. 1a#!on87the covenant

must either affect the land as regards mode of occupation, or it must be such as per se, and

not merely from collateral circumstances, affects the value of the land;. Accordingly, a

restrictive covenant burdening one property must be capable of benefiting another property.

!or example, a covenant that property shall be used only for residential purposes clearly

benefits, and enhances the value of the property which is intended to be benefited,

notwithstanding who the owner of that property may be. **

#t is because of this principle that a covenant which is expressed to benefit lot A by restricting

the use of lot , which may be many miles away, is probably not enforceable. Thus, if A

owns property in the south end of the City of ?alifax and owns another property in the north

end of the City, sells the property in the north end, and purports to include a covenant in the

deed for the benefit of the south end property to the effect that the north end property will be

"Ietland v. 6river *88B Ch. *.

10)*7J7+, *J &ast *J, *0

11!arwell, G., in 9ogers v. ?osegood *8JJB - Ch. 77, at page 80


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used for residential purposes only, that covenant is clearly incapable of actually benefiting the

south end property, notwithstanding what the parties intended, and is therefore only

enforceable between the original parties and not between the successors in title to the south

end property and the north end property. The next characteristic of a restrictive convenant

which runs with land, it will be recalled, is that the land intended to be protected or benefited

must be described by the instrument creating the covenant so as to be ascertainable with

reasonable certainty, although a full legal description is probably not necessary if the property

is otherwise identifiable with reasonable certainty: In Re Un#on o* Lon'on an' S#&!

=anB L##e'82

!inally, a covenant which runs with land must be negative in substance. This is so because

the remedy for a breach is injunctive in nature and the courts are reluctant to grant injunctionswhich re$uire the doing of positive acts which re$uire continuous supervision by the courts.

?owever, a covenant may be positive in form but negative in substance. !or example, in Tulk

v. 'oxhay*, a covenant which was positive in form, providing, as it did, that the covenantor

would maintain %eicester $uare as a garden, was held to be negative in substance as actually

being a covenant not to use the property for any purpose other than as a garden. #n addition to

meeting these general conditions, when drafting restrictive covenants, one should also keep in

mind the following considerations:

)a+ A restrictive covenant which forbids the sale, mortgage or lease of land is void and

unenforceable under the general principle that any restriction on alienation is void if it is

designed to prevent the exercise of a power, such as the power of alienation, which is

inherent in the ownership of a legal estate in fee simple: */

)b+ #f a covenant is intended to protect only a part of the land described, and is only expressed

as benefiting all the land described, but is actually capable of benefiting only part of that land,

it does not run with all the land notwithstanding that it may be capable of benefiting a part of

it. !or example, in the case #n 9e allard4s Conveyance*0 where the covenant was with the

owner of the Childwickbury &state, which consisted of *FJJ acres, there were no words such

12*8B Ch. 1**, 1*.

13supra

14haw v. !ord )*7FF+ F Ch. 6. 118 at page 1F/.

15*8FB Ch. /F


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as ;all or any of the lands; to indicate that the benefit of the covenant was to pass by a

conveyance of a part of the land. Accordingly, Clauson, G. held that while the covenant might

touch or concern a small portion of the Childwickbury &state, it did not touch or concern the

remainder of it and that the covenant could not be severed and treated as annexed to that part

of the land as was actually touched by or concerned by the covenant. ?e did, however, say

this*1: ;#n 9ogers v. ?osegood the benefit of the covenant was annexed to all or any of certain

lands adjoining or near to the covenantor4s land and no such difficulty arose as faces me here

and there are many other resported cases in which, for similar reasons, no such difficulty

arose.; "hat are the practical considerations which result from these principlesE !irst of all,

let us place ourselves in the position of a solicitor for a client who is planning to sell part of

his property and to protect the property being retained by him, for all time, by creating a

restrictive covenant which will burden the land which he intends to sell and benefit the land

which he intends to retain. ?e must determine whether4 the covenant is

)a+ capable of benefiting the land to be retained, regardless of who the owner may be, and

)b+ contrary to the policy of the law, such as a restriction on alienation. nce the solicitor has

satisfied himself on these points, he should ensure that the deed contains a covenant which is

negative, that the deed clearly expresses an intention that the burden and benefit run with the

title to both lots A and , and that the problem which arose in the case #n 9e allard4s

Conveyance*F is avoided by using the words suggested by the Court in that case..

Accordingly, the deed should contain a covenant which could be in the following form: To

the intent that the benefit of the following covenant runs with and to the benefit of all or any

of the lands described in chedule A and the owner, owners, occupier or occupiers from time

to time of such lands, and that the burden of that covenant runs with and burdens all or any of

the lands described in chedule , the grantee, his heirs, executors, administrators, successors

and assigns covenant with the grantor, his heirs, executors, administrators, successors and

assigns as follows: )?ere insert negative covenant+

#t will be remembered that the grantee is creating an e$uitable interest in the lands being sold

which is appurtenant to the title to the lands being retained. Accordingly, the client who

wishes to protect the property he is retaining is concerned not only as to whether or not the

covenant is enforceable against the title to the land he is selling but also that the interest he is

169ogers v. ?osegood ,at page /7*

1supra


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receiving, as owner of the retained land, is a first charge on the property being sold so that the

benefit of the covenant cannot be destroyed by some prior charge.

"hat then, is the effect of a mortgage on a property which is made before the creation of a

restrictive covenant affecting the same propertyE #f the property to be burdened by the

restrictive covenant is, at the time the restrictive covenant is created, subject to a prior

mortgage, or a judgment, )under the 9egistry Act a judgment has the same effect as a

mortgage+ it is my view that if the property subject to the restrictive covenant is sold at a

foreclosure sale respecting the mortgage or at an execution sale respecting the judgment, the

purchaser at the sale takes the property free of the restrictive covenant, since the purchaser at

the sale gets all the interest which the owner of the burdened property had at the time the

mortgage or judgment came into existence. #n this case, the property was not burdened by therestrictive covenant at the time the mortgage or judgment came into existence. As a result,

when acting for a client who wishes to have his property protected by the device of a

restrictive covenant on an adjoining or neighbouring property, it is essential that a full title

search of the adjoining or neighbouring property be carried out and that if any prior

encumbrances are found, those encumbrances be released or subordinated to the rights of the

person entitled to enforce the restrictive covenant. !rom the point of view of the person who

is, for a consideration, burdening his property with a restrictive covenant, it must be

remembered that the covenant is, as far as he is concerned, not only a negative easement on

his title, but also a contractual oblgation. Accordingly, it is advisable, from his point of view,

to include in the restrictive covenant a provision that he is liable in damages in an action in

contract only for a breach of the restrictive covenant which occurs while he is the owner and

occupier of the property. o far, # have discussed the first major intervention by the courts of

e$uity in a field which, were it not for this intervention, would only be contractual in nature.

The next major extension to the law was made in &lliston v. 9eacher*7This further extension

of the e$uitable principle laid down in Tulk v. 'oxhay became necessary as a result of

developers selling off lots in accordance with plans of subdivision without expressly

burdening the unsold lots with the same restrictive covenants contained in the deeds to the

lots. #n such cases, an extension of the doctrine in Tulk v. 'oxhay*8was necessary in order to

have the burden of restrictive covenants imposed on lots as they are sold burden the unsold

1!*8J7B - Ch. 6. F/.

1"supra


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lots, so that the owner of each lot in a subdivision may enforce the restrictions which burden

his lot against other lots in the subdivision. #n order to overcome this problem the courts,

beginning in &lliston v. 9eacher-J, have, under certain circumstances, held that on each sale,

the purchaser not only covenants with the vendor to observe the restrictions imposed on his

lot but that the vendor also covenants impliedly with the first purchaser to observe the same

restrictions with respect to each unsold lot. As a result, each unsold lot becomes burdened in

e$uity with the implied covenant and the lot sold to the first purchaser is not only burdened

by the covenant but benefited with its protection as against the title to the other lots. This

device is known as a ;building scheme;, but before a building scheme will be implied the

following conditions, as outlined in the judgment of Darker, G. in &lliston v. 9eacher-*, must

be met:

)a+ the person claiming the benefit of the restrictions and the person bound by the restrictions

must claim under a common vendor

)b+ before selling either the land protected by the restrictions or the land bound by the

restrictions, the common vendor must have laid out a defined area of land belonging to him

)including the land protected and the land bound by the covenant+ for sale in lots, subject to

restrictions intended to be imposed on all the lots which, though they may vary in detail as to

particular lots, are consistent only with the general scheme of development

)c+ the restrictions must have been intended by the common vendor to be and have been for

the protection of all the lots intended to be sold, whether or not they were also intended to be

and were for the benefit of other land retained by the vendor but not comprised in the

scheme

)d+ the land protected and the land bound by the restrictions must have been purchased from

the common vendor upon the footing that the restrictions were to enure to the benefit of the

other lots included in the scheme, whether or not they were also to enure to the benefit of

other land retained by the vendor but not included in the scheme

)e+ the first purchaser must have had notice of the relevant facts and

20supra

21supra


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)f+ the scheme must have been formulated before the first sale. #t is apparent that whether a

series of conveyances with restrictions amounts to a building scheme is a $uestion of fact in

each case, and that it is not essential, as it is in cases which do not amount to a building

scheme, to describe the land to be benefited. A building scheme, properly created, amounts to

a general local law for a subdivision which each owner can enforce against the other by

injunction. #n a building scheme, the technical drafting is not as important as is the intent of

the parties to be gathered from all the circumstances--.

?owever, in view of the fact that it is difficult to predict whether or not a court will imply an

intent to create a building scheme, # would, notwithstanding this rule, recommend that the

formalities, such as specifically mentioning the land to be benefited, be &ollowed when

drafting restrictive covenants in a subdivision. # now return to certain additional steps whichshould be taken when imposing restrictive covenants either by the device of a building

scheme or pursuant to the doctrine in Tulk v. 'oxhay. #s it necessary that the purchaser sign

the deed creating the restrictionsE #n Hilpinville %td. v. 6umares$-?arris, C.G. held that a

purchaser who accepts title under a deed containing a restrictive covenant is bound thereby

although he did not sign the deed, and an agreement containing a similar covenant signed by

him as a preliminary to the giving of the more formal deed, is admissible as evidence of his

intention to be bound. #n the result, if it can be shown that the first purchaser accepted the

deed containing the restrictive covenant but did not sign it, he is bound by the covenant, and

the covenant runs with the land. The signing is only an evidentiary matter and the lack of a

signature is not fatal if the court concludes, on all the evidence, that the purchaser did, in fact,

accept the restrictive covenant. ?owever, when creating a restrictive covenant, it is advisable

to have conclusive evidence that the purchaser accepted the restrictive covenant and therefore

it is the better practice to have each first purchaser from the subdivider execute the deed

containing the restrictions.

#t is also important, when preparing or perusing an agreement of sale, to make sure that the

agreement clearly provides that the deed to be given at the closing be subject to the restrictive

covenants and that the covenants be specifically set out in the agreement. #t is true that the

standard form of agreement of purchase and sale provides that the title to be given is subject

to ;easements and restrictions which do not materially affect the enjoyment of the property;.

229e %akhani and hapiro )*87*+, *1 9.D.9. J0 at pages * and */ )nt. ?.Ct.+

23 *8-FB * 6.%.9. FJ )(...C.T.6.+


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?owever, since it may be highly arguable whether the particular restrictive covenants which a

vendor proposes to put in a deed do, in fact, materially affect the enjoyment of the property to

be sold, # would recommend that the agreement of purchase and sale specifically set out the

restrictive covenants which the subdivider intends to put in the deed. #t is also important to

remember that even if the agreement of sale contains a provision that the deed be subject to

restrictive covenants, if the deed given pursuant to the agreement, at the closing, does not

contain the restrictive covenants, then the deed prevails and the restrictive covenants

mentioned in the agreement cannot be enforced: 'illborn v. %yons-/.ince a restrictive

covenant is an e$uitable charge on land it can, if not recorded, be defeated by a subse$uent

registered instrument taken by a purchaser for value in good faith without notice of the

restrictive covenant.

ection -0 of the 9egistry Act provides as follows: ;(o e$uitable lien, charge or interest

affecting land shall be valid as against a registered instrument executed by the same person,

his heirs or assigns.;-0Accordingly, whether the restrictive covenants are contained in a deed

or in a separate instrument, the document creating them should be registered in the registry of

deeds in order to preserve them against subse$uent purchasers for value and without notice of

them. # now turn to the position of a solicitor for the purchaser of real property subject to

restrictive covenants. #f, in searching the title, the solicitor comes across covenants in a deed

in the chain of title, and the agreement of purchase and sale does not provide that the

conveyance is to be made subject to the restrictions, and the purchaser does not wish to take

the property subject to the restrictions, then, because restrictive covenants create an e$uitable

charge, there is an objection to title, and the removal of the restrictions must be re$uisitioned

within the time, as provided in the agreement, that other re$uisitions to title must be made. #

At the outset, # should point out that it is not true that merely because a restrictive covenant is

framed as being in effect for all time, it offends the rule against perpetuities and is therefore

not enforceable. This is not i the law and, indeed, unless a restrictive covenant becomes

unenforceable in other circumstances which # will mention shortly, it remains enforceable for

all time, no matter how long ago it was created: 'acKen2ie v. Childers-1 #f a solicitor for a

proposed purchaser finds, in his search, covenants which appear to him to be restrictive

24*8*/B - Ch. -*

25ection -0 of the 9egistry Act

26)*778+, / Ch. 6. -10 at page -F8.


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covenants which may run with the land, and has instructions to re$uisition a release of those

covenants, it is important that the re$uisition be not only made on time, but that it be framed

properly. The re$uisition must be for a release from the present owner of, and anyone else

who has an interest in each property benefited of the covenant, together with a release from

each mortgagee and each encumbrancer of the property benefited by the covenant, including

a tenant, since the benefit of a restrictive covenant, when it is expressed to benefit the owner

of the property and his ;assigns;, extendsn to a tenant of the owner.-F#t is immediately

apparent that in the case of a large subdivision, where most or all of the lots have been sold,

such a re$uisition, for all practical purposes, could be fatal to a sale.

?owever, if, in each deed, the subdivider has reserved to himself the right to vary or give

consent to a breach of a building restriction, then a release from the owners of the lots is notnecessary and the scheme may be varied by the original subdivider only, since each purchaser

bought on this footing.-7The form of the release is important. #t will be remembered that a

restrictive covenant not only imposes a contractual obligation but also creates an e$uitable

right in property and therefore the release should not only release the purchaser from any

liability in contract, but, in addition, should release the property right in the lot. As a result,

the release should contain, in addition to a release of personal liability in contract, the

following clause: ;The releasor also releases to the releasee any right, title or interest the

releasor has in the )describe the lands being sold+ by virtue of a restrictive covenant contained

in a deed dated the day of made between as grantor and as grantee, registered in the registry

of deeds.; "hen a purchaser re$uisitions a release of a restrictive covenant, the vendor often

takes the position that the covenant is contractual in nature and does not ;run with the land;

because it does not meet all the tests which must be met before a covenant runs with land. #t

is apparent that more often than not there is no clear answer to this $uestion, and, as a result,

a court, in an application made under the Lendors and Durchasers Act, may be asked to

determine whether a covenant does run with land and therefore whether or not an objection to

title which is made respecting a covenant is valid. An application under the Lendors and

Durchasers Act is certainly a speedy and fairly cheap method of having this $uestion

determined in a summary manner by a chambers judge on an agreed statement of facts.

?owever, the application may only be between the vendor and the purchaser, and the

2Taite v. Hosling )*7F8+, ** Ch.-F.

2!"hitehouse v. ?ugh *8J1B * Ch. 6. -0.


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$uestion arises as to whether or not an order made in such an application is binding on those

persons entitled to enforce the covenant but who are not parties to the application. #t is not

safe to assume that because a restrictive covenant was made more than twenty years ago it is

no longer effective because of the %imitation of Actions Act. #t must be remembered that the

time for bringing an action with respect to a restrictive covenant begins to run not from the

time when the restrictive covenant was created but from the time of its breach: Turner v.

'oon-8.Although a restrictive covenant is, subject to this limitation period, enforceable at

any time, there are other circumstances in which a restrictive covenant becomes

unenforceable. #t must be remembered that the enforcement of an e$uitable charge is by way

of injunction and that an e$uitable remedy cannot be pursued if there is any delay or laches in

bringing the action.

#n addition, a person entitled to the benefit of a restrictive covenant affecting land may be

estopped from enforcing the covenant if he

)a+ knows of his own rights and of another person4s intention to commit a breach of the

covenant

)b+ by his acts or omissions causes or permits the other person to believe that the covenant

does not exist, or is no longer enforceable against that other person or that he, the person

entitled to enforce the covenant, has waived his right and

)c+ by his acts or omissions causes or permits the other person to commit a breach of the

covenant and incur expenditure in reliance upon such beliefJ.

Also, a restrictive convenant becomes unenforceable if there is a general change in the

character of the neighbourhood. !or example if a subdivision, originally designed to be

residential, and subject to restrictive covenants which re$uire that lots shall be used for

residential purposes only, becomes, nevertheless, commercial in nature, then the restrictive

covenants are no longer enforceable.*!inally, a right to an injunction against an owner will

be lost if there has been ac$uiescence in previous breaches by other owners. !or example in

2"*8J*+ - Ch. 7-0

30&lphinstone @ Covenants Affecting %and, page *JF

31&lphinstone @ Covenants Affecting land, p. **J.


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Turney v. %ubin-it was held that the failure to initiate proceedings with respect to previous

breaches by other owners subject to the covenant amounted to an implied approval of the

breach complained of in that case.

#f property is expropriated, does the expropriation extinguish any burden on the title to the

property created by a restrictive covenant entered into before the expropriationE This $uestion

is answered in 'egarry and "ade @ The %aw of 9eal Dropertyas follows: ;"here land

which is subject to a restrictive covenant is ac$uired compulsorily by a public authority under

statutory powers, no action lies for breach of the covenant if what is done on the land is

validly done in the exercise of statutory powers. The authority of Darliament then overrides

the contractual restriction, and the covenantee4s only remedy is to claim compensation for the

injurious affection of his own land which was previously benefitted by the covenant. ut thisdoes not extinguish the covenant, which continues to bind the ac$uired land as regards any

use not authori2ed by statute. Thus where the Air 'inistry compulsorily purchased

agricultural land for use as an aerodrome and later let it to a firm for use for commercial

flying, an injunction was granted to present the firm from so using the land in breach of a

covenant restricting it to agricultural use but an injunction to prevent them from using it for

Air 'inistry work was refused.; #n closing, # will briefly discuss the nature of the remedies

which may be sought in the event a restrictive covenant is breached. #f a restrictive covenant

is breached and the original covenantee or any other person entitled to the benefit of the

covenant brings the action against the original covenantor, the court, on proof of the breach,

will grant an injunction as of course without re$uiring proof of any injury or prospect of any

injury in the future. #f, however, the action is against a successor in title of the original

covenantor and the plaintiff is thereby entitled to sue in e$uity only, an injunction will be

granted only where it is shown that continuance of the breach will cause injury to the plaintiff

in the future./

Accordingly, it is my view that if there is a restrictive convenant against pruning trees, an

injunction probably would not be granted against a successor in title to the original purchaser,

unless the plaintiff showed, in some way, that the continuance of this activity would cause

him substantial injury in the future. #t should be noted that the plaintiff4s motive in bringing

32)*87J+, *J 9.D.9. 78 ).C..C.+

33)/th &d.+ at page FF0

34&lphinstone Covenants Affecting %and, pp. 81, 8F.


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the action is irrelevant, once he has discharged this burden.0!inally, it should be noted that a

person entitled to enforce a restrictive covenant cannot use a self@help remedy to stop a

continuing breach.16amages were awarded for using a steam roller to demolish a wall

erected in breach of a restrictive covenant. #t should be noted that a restrictive covenant is

enforceable against a s$uatter.F

CASE STUDY

TUL; V) MO,


22/27

certain form as a public Mpleasure groundN. The deed restriction was covenant for heirs and

assigns re$uiring that the land be maintained as a s$uare garden. The Dlaintiff continued to

own homes and live around the s$uare after its sale. #n *7J7, the person who originally

purchased %eicester $uare from the plaintiff had notice of the covenant contained in the

deed. !orty years later, the property was sold to the 6efendant, 'oxhay. 'oxhal sought to

build upon the land on the s$uare. Dlaintiff brought a bill for injunction to stop any

construction.

I!!"e.Can a covenant restricting a property to a specific use be enforced against a subse$uent

purchaserE

?eld. "hether or not the covenant runs with the land, such an agreement could properly be

enforced in e$uity because the one who purchases the land from Tulk had notice of that

covenant. 6efendant, 'oxhal could not stand in a different situation from the owner from

whom he purchased the property.

D#!)"!!#on. An e$uitable servitude is enforceable by injunction with no regard to privity, so

long as the promise is intended to run and the subse$uent purchaser has actual or constructive

knowledge of the covenant.

CONCLUSION

ec./J@O 6eals with what < when ;Covenants )agreements+; between two parties with regard

to property would bind the 4other4 parties .

This ection should be read along with section ** of the T.D Act. The general rule is that on a

transfer of property no condition restrictive of the enjoyment of the property should be

imposed on the transferee ec.** Dara ij. ?owever an exception to this general rule had been

made in ec.** Dara ii. The exception made by the second para of ec.** is a recognition of

the rule that the transfer may impose conditions restraining the enjoyment of land if such

restrictions are for the benefit of his adjoining land.

"hile ec.** relates to the enforcements of the restriction against the transferee )i.e in the

case of transfer+ ec./J refers to the enforcement of the restriction against the purchaser from

the transferee. )i.e the case of subse$uent transfer+.


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ec.** recogni2es that both the 4Dositive4 and the 4(egative4 Covenants may be enforceable as

between the actual parties to the transfer, that is the transferor and the transferee.

ut according to ec./J an affirmative covenant cannot now be enforced against a purchaser

from a transferee i.e in case of second transferB. Dositive covenants compel the transferee to

do some positive acts like digging a well etc but cannot compel subse$uent purchasers. uch

covenants do not run with the land.

ln the case of Austerberry vs ld ?am Corporation, Austerberry conveyed a land to with

a condition that he should make a road upon the land and keep it good for the benefit of the

public. The condition was for the benefit of adjoining land. The land transferred hands and

finally came into the hands of ld ?am Corporation. The Corporation refused to construct aroad on the land. Austerberry filed a suit for the enforcement of the condition. The Court held

that it was a positive convenant, and in no way benefit any adjoining land and so such

covenant cannot run with the land at all.

ii+#n ?alsall vs ri2ell )*801+ the Court was considering the case of a developed estate in

which the developers retained the ownership of roads and sewers. 3nder certain covenants,

the developers were obliged to permit purchasers of properties in the estate to use them, and

the purchasers were obliged to contribute towards the cost. The $uestion arose as to whether

the successors of the original purchasers were bound to contribute to the cost of the roads and

sewers. The Court held that the successors could not be sued on the covenant for it was a

positive covenant, which did not run with the land, but that it is ancient law that a man cannot

take benefit under a deed without subscribing to the obligations there under. The court held

that the successors had no right to use the roads and sewers except under the deed, and that as

they desired to take its benefits, they were bound by the covenants contained in it.

#t is only a negative covenant like not to build, not to dig well etc. runs with the land and bind

the subse$uent transferees also. ec.00)-+, 11 and *J7 of the T.D Act deal with these

covenants.

1. Re!(#)#ve Covenan! >Se)#on 5?

According to this section, where a third person5


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)*+ has for the more beneficial enjoyment of his own immovable property and independently

of5

)a+ any interest in the immovable property of another, or

)b+ any easement thereon, a right to retain the enjoyment in a particular manner, or

)-+ is entitled to the benefit of an obligation5

)a+ arising out of contract, and

)b+ annexed to the ownership of immovable property, but not amounting to an interest in or

easement thereon,

)+ uch right or obligation may be enforced against5

)a+ a transferee with its notice,

)b+ a gratuitous transferee of the property affected thereby,

)/+ ut not against a transferee5for consideration and without notice of the right or

obligation, nor against such property in his hands. Covenants are written agreements or

contracts with respect to a property. "here the covenants restrict the use or enjoyment of a

property, they are known as restrictive covenants. Therefore, the restrictive covenants are

conditions imposed by the transferor restraining the use or enjoyment of property by the

transferee. The general rule of law is that a personal contract, even if it is related to a

property, is binding only between the parties to the contract and their privies. #t is not

enforceable against third persons. As noted earlier section ** of the Act says that where on a

transfer of property an interest is created in the property absolutely in favour of any person

but the terms of the transfer directs that such interest shall be applied or enjoyed by him in a

particular manner, he shall be entitled to receive and dispose of such interest in such a manner

as if there was no such direction. ut if such interest has been made in respect of one piece of

immovable property for the purpose of securing the beneficial enjoyment of another piece of

such property, such a direction shall be a valid direction. "here the transferee is re$uired to

do some act it is known as affirmative covenant but where he is restrained from doing certain

things, it is known as negative covenant. ection ** deals with covenants enforceable against


25/27

the transferee but not against the subse$uent transferees. ection /J deals with negative

covenants and their enforceability against subse$uent transferees. This section says that if a

transferor imposes a negative covenant in a transfer of property then such covenant is binding

and enforceable against the assignee of the transferee provided the following conditions are

fulfilled:5

)i+ The covenant is for the more beneficial enjoyment of the transferor4s own immovable

property,

)ii+ The subse$uent transfer is for value and the assignee has notice of the covenant, or

)iii+ The subse$uent transfer is without consideration. 9estrictive covenants are annexed to

the land as if they are part of the land and alongwith the transfer of land they pass on to every

subse$uent transferee. This section enacts the e$uitable rule that the burden of a covenant

runs with the land. Therefore, such covenants are enforceable against any person who has

interest in that land. Affirmative covenants are not annexed to the land and do not run with

the land.

COVENANTS RUNNING WITH THE LAND

This expression is borrowed from the &nglish law of real property. A covenant running with

the land is a covenant annexed to the land. A covenant may run with the land at law or in

e$uity. A covenant runs with the land at law when the benefit of it passes to the assignee of

the covenantee or when the burden of it passes to the assignee of the covenantor, and in either

case, independently of notice. A covenant runs with the land in e$uity when the burden of it

can be enforced against the assignee of the covenantor.

Tulk v. 'oxhayl. This section is based on the &nglish law, laid down in the case of Tulk v.

'oxhay. #n this case, T owned a land in %ondon. This land had a garden surrounded by the

houses. T sold the garden to & with the covenant that & and his successors or assignees will

keep the garden intact as garden ornamental and shall not construct any building on it. T

retained the ownership of the houses urrounding the garden with him. After sometime &sold the garden to another person who sold it further to some other person and ultimately it


26/27

was purchased by '. ' had the notice of the covenant but he attempted to develop building

in the garden. T enforcing the covenant sought an injunction to restrain ' from constructing

buildings in the garden. The Court held that in e$uity all the subse$uent transferees were

bound by the covenant and it restrained ' from building houses in the garden. %ord

Cotenham %.C. observed that since ' had notice of the covenant and T had legitimate

interest in preserving the garden, the covenant was enforceable at e$uity against '.

Therefore, the rule laid down was that in e$uity a restrictive covenant imposed for the benefit

of the land retained by the transferor was binding on purchaser with notice.

CONTRACTUAL O8LIGATION ANNE


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covenants running with land

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