Pre-2010 Covenants
Freehold Overview
Covenants are obligations comprised in a document that is executed as a deed. In the context of land, they subsist as contractual obligations between the original parties to the deed. As a general rule, covenants being contractual obligations do not bind the successors to the original parties.
However, in the context of property law, certain types of covenants relating to the property/land itself, continue to bind the successors of the original covenantor and covenantee as owners of the relevant property. The relevant rules were reformed by the 2009 Land Law legislation. The 2009 legislation applies to covenants entered after 1st December 2009. There are some issues of interpretation as to its scope.
Under both the pre-2009 and post-2009 legislation, a third party may take the benefit of a covenant in relation to land, whether or not named in the relevant deed. The covenant must relate to land. Purely personal covenants are not enforceable in this way. Generally, the original covenantee who has parted with the property may not enforce a covenant that is for the benefit of the land and is not for his benefit in a personal capacity.
Succeeding to the Benefit
Common law and equity apply slightly different rules in relation to the enforceability of covenants, by and against successors of the original parties. Generally, the benefit of the covenant runs for the benefit of successors under common law principles, However, it ran only for the benefit of successors, who held the legal estate.
The benefit of the covenant at common law did not confer the benefit of equitable remedies, particularly the injunction, which is the principal method of enforcing a covenant against use. Therefore the rules as to whether equity recognises the passing of the benefit were and remain of practical importance and relevance.
Annexation to Land
Equity requires that the covenant must be “annexed” to the land. This may be express or implied. Annexation requires that there is an intention to benefit the land owned by the covenantee and burden the land of the covenantor. The land benefitted must be ascertained. The covenant must be capable of benefitting the land. It must be intended to run with the ownership and title of the land.
If the covenantee is the successor to the original covenantee in relation to part only of the land, he may enforce the covenant, provided that it is expressly or impliedly for the benefit of each part of the land, and not just the whole of the land only. If it is so annexed, it will attach to each part of it and may accordingly be enforced by each successor as owner of the part.
Where a covenant benefits a substantial part of the land, the question may arise as to whether it is intended to be annexed to the whole of the land. This is a matter of interpretation in the circumstance. Annexation will be readily found where there is a scheme of development affecting land or a group of units on land. A covenant that has been annexed to the land cannot be dealt with separately from it.
Even if the benefit of the covenant has not been annexed to each part of the lands, but is annexed to the entirety only, the covenant may be enforceable in equity by an owner of part of the land, provided that
- if it has been expressly assigned in successive parts to their respective purchasers;
- that the land is benefited by the covenant;
- it is as ascertainable in scope; and
- the covenantee cannot enforce the covenant after all the lands have been transferred.
For this purpose, the covenant may not be assigned once this is no longer necessary to benefit the land for which it was originally created.
Statutory Succession to Benefit
The Real Property Act 1845 allows a successor of the covenantee to have the benefit of a covenant that is intended to benefit him, notwithstanding that he is not a party to the relevant deed. The covenantee may be a trustee or fiduciary on behalf of others who have the requisite interest and who are intended to be benefitted. The 2009 Act continues this provision but makes more thoroughgoing reforms.
Positive covenants may therefore “run” with the land, for the benefit of the successors of the owners in whose favour, they were made. The successor must have the same estate or interest in the land, as the original covenantee. He must have an interest in the subject matter of the covenant. The covenant must “touch and concern” the land.
The benefit of a covenant may also pass under the so-called “all estates” clause, which is usually implied by law in a deed of sale of land. The Conveyancing 1881 and its successor the Land and Conveyancing Law Reform Act, 2009 provides that that privileges, rights and advantages pertaining to or reputed to pertain to the land, pass to the successor in title.
It is necessary that the successor has the same estate in the land as the original covenantee. Therefore, a covenant may not be available to a lessee of the covenantee who is not the covenantee’s successor.
It is a question of interpretation of the covenant as to whether it is intended to continue to apply for the benefit of successors. The successor must have an interest in the land, the subject matter of the covenant. The person who claims the benefit of the covenant must own some property that it protects or enhances. Succession to the covenant must be connected with the land.
Benefit Pre-2009
The net effect of the above rules in relation to pre-2009 covenants is as follows;
The covenant may be made for the benefit of successors. There may be a specific assignment of the benefit of the covenants. However, this is not necessary once the covenant is annexed to the land as it passed under the “all estate” clause in the Conveyancing Act which includes with the land, all easements and rights attaching to the land.
Automatic assignment of the covenant takes place where the covenant is annexed to the land on creation or at a later date. If the wording of the relevant deed shows an intention to benefit the land, for example, by being made with the owner of the land, for the time being, the land concerned is ascertainable and is capable of being benefitted, then provided that benefit is annexed to the land, the benefit of the covenant passes with the land
Where the benefit of the covenant is annexed to the whole of the land, only an assignee of the whole can take it. If it is annexed the whole or part of it, an assignee of a part may take the benefit of it.
Burden of Covenants
The burden of a positive covenant does not generally “run” with the land and bind the covenantor’s successors in title.
The original owner may remain liable, notwithstanding that he had sold or otherwise parted with the land. Accordingly, it is necessary to have a so-called chain of indemnities, by which the successor covenants to indemnify the original covenantor against his liability on the covenant (which would remain).
A covenant may be enforceable against a successor of the original covenantor, provided that it is negative and restrictive, rather than positive. The distinction is justified on the basis that a restrictive covenant is something to which a property is subject when bought. Equity does not compel the successor to perform a positive obligation but prevents him from ignoring the restrictions to which his purchase was subject.
Enforceable Restrictive Covenants
Negative (or restrictive) covenants may be enforceable under equitable principles. A person who purchases land with notice of the burden (obligation) of such a covenant ( restricting the land in some way), takes the land with that covenant, subject to certain conditions. A purchaser who buys without notice of the covenant is not affected.
The principle does not apply to positive covenants, which require action or expenditure. A covenant is a positive covenant where in substance, it requires action or expenditure even if expressed in negative language. If a covenant contains both positive and negative elements, the positive elements may be severed, so that the negative or restrictive elements only, remain to bind subsequent owners.
Restrictive covenants typically restrict the land affected from being used for a particular purpose, or from being developed in some way or at all. The deed which creates the covenant must show an intention that the burden or obligation should bind successors. The successor must purchase the same estate or interest, as the original covenantee.
The Courts of Equity enforce negative covenants on the basis that a person who purchases property with notice of a restrictive covenant which affects it should be obliged to perform and observe it.
In order to be enforceable in equity, a restrictive covenant must be intended to benefit the land concerned. If it is for personal benefit only then it is enforceable by successors.
The covenant must touch and concern the land and interest to which it relates. It must benefit the land as such, and not merely the owners or occupiers of the land in a personal capacity.It must be relevant to the right which allows the benefit to be received. The successors must have the opportunity to choose whether to take the burden of the covenant or not. Having taken the land with the relevant benefit and chosen not to renounce it, they must take the burden.
The covenant need not affect the covenantee’s land exclusively nor immediately. It is sufficient that it protects it in a broad sense. For example, a covenant to contribute towards repairs would touch and concern the land. It is not necessary that the covenantor is the owner of the land affected by the covenant.
Enforcement Issues
Issues may arise as to whether a restrictive covenant may be upheld where there is a fundamental breach by the covenantee. In this case, the innocent party may terminate the contract and be no longer bound by it. Where this arises, it may not be possible to enforce the restrictive covenant. That contract no longer subsists.
The covenant must attach to an interest in land. Where there is a mere licence only, such as in respect of advertising hoardings, there is no interest in the licensee. The right to use the land is contractual only. A squatter to a lessee’s interest does not acquire title, but he must, in effect comply with the covenants in the lease if he wishes to benefit from them.
A covenantee may be estopped from enforcing a restrictive covenant. If he knowingly permits a breach of the covenant and leads or causes the covenantor or his successor to act to his detriment in reliance on this belief, the covenantee may be estopped (prevented) from relying on the covenant or breach to the extent it is unjust. However, non-enforcement of the covenant by itself, will not raise an estoppel.
The general principle is that the covenantee need not show any damage. The breach of the covenant is sufficient and a perpetual injunction is usually granted to enforce a negative covenant.
However, in some cases, even if the covenant is enforceable, an injunction may not be available for its breach. If there is an equity against the covenantee’s successor, an injunction may be denied. Injunctions remain discretionary. If the covenantee has delayed, acquiesced in the breach or induced the covenantor to act to his detriment, he may be limited to an award of damages. In such cases, damages may be minimal and comprise the loss of the amount which would have been payable, to buy out the covenant.
References and Sources
Primary Texts
Wylie on Irish Land Law Wylie 6th Edition 2020
Land Law In Ireland -Lyall 4th Edition 2018
Principles Of Irish Property Law de Londras 2nd Edition 2011
Equity and the Law of Trusts in Ireland- Keane 3rd Edition
Land Law Kenna & Murphy 2019
Land Law Pearce & Mee 3rd Edition 2011
Other Irish Sources
The Land and Conveyancing Law Reform Act 2009: Annotations and Commentary -Wylie 2nd Edition 2017
Property Legislation 2009 2011 Cannon, Clancy, Kenna 2012
Irish Land Law – A Casebook: Adanan Maddox 2020
A Casebook on Equity and Trusts in Ireland – Wylie
Shorter Guides
Land Law Nutshell Cannon 2020
UK Textbooks
Land law C. Bevan 2nd ed.2020
Land Law: Text, Cases and Materials B McFarlane, N Hopkins and S Nield, (4th ed. OUP 2018)
Property Law R Smith(10th ed., Pearson, 2020)
Cheshire and Burn’s Modern Law of Real Property by Burn, E. H. 2011
Modern Land Law Dixon 2018
Elements of Land Law Gray, 2009
Property law: cases and materials Smith 2015
Land law Cooke 2015