Freehold covenants; does burden of covenant run in equity?
Equity was prepared to enforce a covenant against a successor in title to the original covenantor where that successor had notice of that covenant.
The criteria has been refined as follows:
(a) the covenant must be restrictive
(b) the covenantee owned land for the beneﬁt of which the covenant was taken, ie the covenant must ‘touch and concern’ the land
of the covenantee;
(c) the parties must have intended the burden to run with the covenantor’s land. This may be done expressly in the deed creating the covenant. The following are examples of such express wording:
- (i) ‘to the intent that the burden of the covenants will run with and bind the property and every part of it’,
- (ii) ‘so as to bind the property hereby transferred’.
In the absence of express wording, such intention may be implied by s 79 of the Law of Property Act 1925. The effect of s 79 is that, unless a contrary intention is expressed in the deed, it will be implied by statute that the parties intended the burden to pass to successors in title. However s 79 will only apply to the burden of covenants created after 1925;
(d) the person against whom it is sought to enforce the covenant must have notice of it
If the title to the covenantor’s land is registered then the restrictive covenant will be an interest affecting a registered estate. The method of protection is to enter a notice on the Charges Register before registration of the successor as the new proprietor.
Where the title to the land is unregistered, the restrictive covenant will be protected by the entry of a Class D(ii) land charge against the name of the original covenantor on the Land Charges Register before the date of completion of a sale to a successor.
However, if the restrictive covenant was created before 1925, it will be binding on a purchaser, unless that purchaser is equity’s darling. Pre-1926 restrictive covenants cannot be registered as land charges and they will be enforceable against everyone, except a bona ﬁde purchaser for value of the legal estate without notice.