Freehold covenants

Freehold covenants occupy an awkward but examinable position in Land Law. A covenant is, at its base, a promise: A promises B that A will, or will not, do something in relation to land. The difficulty is not formation between A and B, but transmission. If A sells the burdened freehold to C, is C bound? If B sells the benefited freehold to D, may D enforce? Land law answers those questions differently according to whether the covenant is positive or restrictive, whether enforcement is sought at law or in equity, whether the benefit has passed, and whether the burden has been protected on the appropriate register.

The core distinction is between positive and negative obligations. A positive covenant requires expenditure or action: to repair a wall, contribute to road maintenance, build a fence, pay towards upkeep. A restrictive covenant restrains use: not to build above one storey, not to use premises otherwise than as a private dwelling, not to trade, not to obstruct a view. English land law allows the burden of restrictive covenants to run in equity against successors, subject to conditions derived from Tulk v Moxhay. It does not allow the burden of positive covenants to run with a freehold estate, either at common law or in equity. This asymmetry is the central puzzle.

The explanation is historical rather than elegant. The common law was hostile to making successors personally liable on someone else's promise. Equity intervened to prevent conscience-based evasion where a purchaser took land with notice of a restriction imposed for the benefit of neighbouring land. But equity did not extend the doctrine to compel successors to spend money or perform acts. Rhone v Stephens confirms that limitation in emphatic terms. It is therefore misleading to say that covenants simply run with land. The benefit and burden must be analysed separately, and positive and restrictive covenants must never be conflated.

For Cambridge Part IB purposes, freehold covenants sit at the meeting point of several previous weeks. Week 1 supplies the distinction between estates, interests, legal rights and equitable rights. Week 2 supplies registration: in registered land, a restrictive covenant is normally protected by a notice in the charges register; in unregistered land, it is registered as a land charge. Week 3 supplies priority logic: registration does not create validity, but determines enforceability against later purchasers. Week 8 and Week 9 should prevent a common confusion: leasehold covenants are governed by a more developed statutory regime and by privity of estate; freehold covenants are not.

In an exam, the safest method is sequential. First, identify the covenant and construe it: is it truly negative, positive, or mixed? Secondly, ask whether the claimant has the benefit. That may occur by annexation, assignment, or a building scheme. Thirdly, ask whether the defendant is subject to the burden. For restrictive covenants in equity, apply Tulk: the covenant must be negative in substance, benefit identifiable land, touch and concern that land, be intended to bind successors, and be properly protected against the defendant. For positive covenants, explain the basic bar, then consider substitutes: chain of indemnity, rentcharge, leasehold structure, benefit-and-burden, estate scheme, commonhold or statutory reform. Finally, consider remedies: injunction, damages, discharge or modification under section 84 of the Law of Property Act 1925.

The best answers do not recite rules mechanically. They show why the law is conceptually strained. Freehold covenants are used to create private planning regimes in residential estates, commercial developments and neighbourhoods. Yet the law's toolkit is a patchwork of contract, equity, registration, and conveyancing devices. That patchwork is practically important, but doctrinally unstable.

The modern law begins from the reluctance of the common law to permit the burden of personal obligations to attach to freehold estates. The common law recognised certain proprietary incidents of land, but it did not treat ordinary promises by a freeholder as capable of binding all successors. A covenant in a deed could create contractual liability between covenantor and covenantee. It could also, in some circumstances, allow the benefit to pass to successors of the covenantee. But the burden of a covenant affecting freehold land did not run. The leading Victorian authority is Austerberry v Oldham Corporation, where the Court of Appeal refused to enforce against successors a covenant to maintain a road. The case fixed the orthodoxy that positive freehold burdens do not run at law.

Equity developed a limited workaround. Tulk v Moxhay concerned Leicester Square. The purchaser had acquired land subject to a covenant that the square should be kept as an ornamental garden. He later sought to build on it. Lord Cottenham LC restrained him. The rationale was not that the covenant ran at law, but that equity would not allow a purchaser with notice to use land inconsistently with a restrictive obligation imposed for the benefit of other land. This doctrine was later rationalised as the running of the burden of restrictive covenants in equity.

The historical point matters. Tulk was not a comprehensive law of land obligations. It was an equitable response to a particular mischief: the purchaser who knowingly acquired land at a lower price because it was restricted and then sought to ignore the restriction. From that origin came the conditions that still structure the doctrine. The covenant must be restrictive in substance; it must be imposed for the benefit of land retained by the covenantee; and the successor must take subject to the equity, now expressed through the registered-title system rather than the older language of notice.

The nineteenth-century settlements also explain why freehold covenants are less coherent than easements. An easement is recognised as a proprietary right fitting within a defined category: a right of way, drainage, support, light, and so forth. A covenant is an obligation. To allow any obligation to become proprietary would risk fragmenting ownership and imposing indefinite personal liabilities on future owners. That anxiety is the background to the numerus clausus instinct in land law: not every useful arrangement should be capable of binding the world.

The Law of Property Act 1925 simplified conveyancing but did not solve the central problem. Sections 78 and 79 deem certain covenants to be made with, or by, successors in title unless a contrary intention appears. Section 78 became unexpectedly important after Federated Homes, where the Court of Appeal treated it as effecting statutory annexation of the benefit of covenants to the covenantee's land. Section 79, by contrast, has never been treated as making positive burdens run. Its function is mainly interpretative: it can assist with intention, but it cannot override the common law rule against transmission of freehold burdens.

The twentieth century then added registration. Restrictive covenants affecting unregistered land became registrable as land charges. Under registered land, they are protected by notice. This did not convert contractual obligations into proprietary rights indiscriminately. Registration affects priority and enforceability against purchasers; it does not cure defects in creation, annexation, dominant land, or substance.

Contemporary land use has outgrown the historical scheme. Residential estates often require continuing contributions to roads, lighting, gardens, drains, gates, and shared services. Developers therefore avoid pure freehold positive covenants by using leasehold structures, estate rentcharges, service companies, long chains of indemnity covenants, or commonhold. The persistence of these devices is itself an indictment of the doctrine. It shows that the law refuses to do directly what conveyancers frequently achieve indirectly.

1. Separate benefit and burden. This is the first rule of freehold covenant analysis. It is not enough that the original parties made a valid covenant. The claimant must show that the benefit of the covenant has reached them; the defendant must be subject to the burden. These are analytically distinct questions. A claimant may have no benefit even though the defendant's land appears burdened. Conversely, a claimant may have the benefit but be unable to enforce against a successor because the burden has not run or has not been protected.

1. Distinguish law and equity. At common law, the benefit of a covenant may pass where the covenant touches and concerns the land, the covenantee had a legal estate, and there is sufficient intention that successors should benefit. The burden of a freehold covenant does not run at law. In equity, the burden of a restrictive covenant may run under the Tulk v Moxhay doctrine. The burden of a positive covenant does not run in equity. The practical result is that ordinary enforceability against successors usually depends on equitable restrictive covenants.

1. Construe the covenant by substance, not label. A covenant described as restrictive may in substance be positive. A promise not to let a wall fall into disrepair may require expenditure and so be positive. A covenant not to build without consent is restrictive, though it may contain machinery for approval. A covenant to pay money is positive, even if payment funds a negative objective such as maintaining amenity. Where a covenant contains both positive and negative elements, it may be severable; but courts will not disguise a demand for money or action as a mere restraint.

1. The burden of restrictive covenants in equity. The orthodox conditions are these. First, the covenant must be negative in substance. Secondly, it must accommodate or benefit identifiable land of the covenantee, often called the dominant land. A covenant in gross, imposed merely for personal or commercial advantage, will not suffice. London County Council v Allen is the classic example: the council had no land capable of being benefited. Thirdly, the original parties must have intended the burden to run. Section 79 of the Law of Property Act 1925 usually supplies this intention unless excluded, but it does not make positive burdens run. Fourthly, the successor to the burdened land must take with the covenant binding in equity and subject to priority rules. In modern registered land, that ordinarily means entry of a notice. In unregistered land, it means registration as a Class D(ii) land charge where applicable.

The case law should be understood as a sequence of attempted compromises. Tulk v Moxhay establishes the equitable enforceability of restrictive covenants against successors. It is not a general theory of land obligations. Its factual setting is important: the purchaser took land subject to a known restriction preserving the amenity of neighbouring land. The case gave equity a means of preventing unconscionable circumvention of a restriction reflected in the price paid for the land.

Austerberry v Oldham Corporation supplies the counterweight. A covenant to maintain a road did not bind successors to the covenantor's freehold estate. That result is often criticised for commercial inconvenience, but it reflects the common law's unwillingness to impose positive personal duties on future owners merely because they acquire land. Haywood v Brunswick is similarly important because it prevents a claimant from converting an obligation to spend money into a restrictive covenant by verbal ingenuity.

London County Council v Allen is the leading authority on dominant land. The council sought to enforce a covenant when it had no land benefiting from the restriction. The Court of Appeal refused enforcement. The case marks the boundary between proprietary covenant and covenant in gross. A restrictive covenant is not a roaming planning power; it must protect land.

Elliston v Reacher concerns building schemes. It shows how mutual enforceability can arise within a defined estate sold in plots, where purchasers buy on the footing that common restrictions apply for the benefit of all. The attraction of a building scheme is obvious: it avoids the need to trace individual assignments of benefit for every plot. The doctrinal discipline is equally important: the area must be defined, the scheme must be common, and reciprocity must be intended.

Federated Homes is the leading modern case on statutory annexation. Brightman LJ treated section 78 as annexing the benefit of restrictive covenants to the covenantee's land. This greatly simplified enforcement by successors and reduced reliance on express assignment. But Crest Nicholson later curbed over-expansion. The benefit cannot be annexed to land that the instrument does not adequately identify. The two cases must be read together: Federated Homes is generous, but not magical.

Rhone v Stephens is the modern anchor for positive covenants. Lord Templeman reaffirmed that the burden of a positive covenant does not run with freehold land. He also confined the benefit-and-burden principle. A successor cannot be forced to perform a positive covenant simply because they acquire land affected by a related benefit. The burden must be genuinely conditional on taking the benefit, and the owner must have a real choice whether to take that benefit.

Wilkinson v Kerdene illustrates practical conveyancing responses to the positive covenant problem. Holiday village owners were required, through an estate rentcharge mechanism, to contribute to maintenance. The case demonstrates that positive estate obligations are often achieved indirectly by property devices other than running freehold covenants. It is therefore a useful case for problem questions involving gated estates, private roads, shared gardens or holiday complexes.

See practice questions section below.

See further reading section below.