In order to enforce such covenants, a claimant who is not the original covenantee must show that he is entitled to the benefit of it. If he cannot, the claimant will need to show that he is an assignee of land to which the benefit of the covenant has been annexed
It is a basic principle of property law that a restrictive covenant affecting land can only be enforced by a successor in title to the original covenantee against the original covenantor or his successor in title upon the basis that he is entitled to the benefit of the covenant upon which he wishes to sue. In order to establish such a right he must prove either that he has received an express assignment of the benefit of that covenant, or that both he and the putative defendant were interested in land within an area subject to reciprocal rights and obligations (which is commonly referred to as a building scheme), or that he is an assignee of land to which the benefit of that covenant has become annexed.
The issue of annexure was looked at recently by the Court of Appeal in the case of Crest Nicholson-v-Mcallister. The decision gives clear guidance. It involved a claim by a property developer to determine the extent to which certain land bordering Claygate Common in Surrey, of which it was the purchaser under a conditional contract, was subject to restrictive covenants.
The Court held that statutory annexation under section 78(1) of the Law of Property Act 1925 provides that a covenant relating to any land of a covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed.
For the purpose of this subsection, in connection with covenants restrictive of the use of land, "successors in title" shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefitted. Section 78(1) is always subject to the provisions of the instrument (usually the title deeds of the land) in which the covenants are said to be annexed and contained.
This means that the benefit of the covenant granted can be claimed by any owner or occupier of the land and has potentially serious consequences for the covenantor or his successors in title as he will be prevented from doing anything on his land in breach of the original restrictive covenants unless he can get the restrictive covenants varied or removed. This is often very difficult as there are strict conditions laid down in the Law of Property Act.
It follows that the conveyancer who is asked to draft such covenants needs to understand clearly whether they are intended to be personal to the covenantee (i.e. to be of benefit to the covenantee only and not annexed to the land). If they are, then this should be expressly stated within the covenant, so as to avoid any possible risk of future litigation.
It is unfortunately abundantly clear that many conveyancers, since the introduction of the Law of Property Act, have misunderstood its provisions and, as a result, unsuspecting covenantors have been embroiled in legal proceedings. The outcome is often dependant to a large extent on the precise wording of the covenants granted which are often expressed in archaic terms.
For an indepth analysis of how we can help you comply with the law as it stands contact Alan Massenhove in our litigation and dispute resolution team.
Please note that this area of the law is a complex subject and you should not take or refrain from taking any step without full legal advice on your particular circumstances. The content of this article is of a general nature and no liability is accepted in connection with it or if any reliance is placed on it.
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