Lexsure e-ROT

Restrictive Covenants · Report on Title scenario

Nobody knows who has the benefit of these covenants

Often nobody who can be found, and sometimes nobody at all. A covenant starts as a contract between two people. Whether it still binds and benefits their successors depends on rules about the benefit and the burden running with the land, and those rules are not satisfied by every old covenant. A schedule of covenants from a nineteenth-century conveyance frequently cannot be enforced by anyone.

From the e-ROT archive

This scenario is drawn from Report on Title material dealing with this specific circumstance.

Lexsure Report on Title paragraph: Schedule of Restrictive Covenants - Unenforceable due to Age · See the wording

Two sides, and both have to survive

A covenant has a burden — the obligation on the land that is restricted — and a benefit — the right of the land that was meant to be protected. For a covenant to be enforceable today, both have to have passed down to the present owners of the two pieces of land.

The rules differ depending on whether the covenant is negative (do not do something) or positive (do something), and they differ at common law and in equity. Positive covenants in particular do not readily bind successors, which is why developers go to the trouble of deeds of covenant and title restrictions.

The practical consequence is that a covenant's existence on a title is not the same as its enforceability.

Already bought, and someone is enforcing a covenant?

If a covenant is being asserted against you, what was reported to you about the title during the purchase is where the question starts.

Find out what should have been explained → WhenIBought.com

Why old schedules so often go nowhere

Because nobody can identify the benefited land. A Victorian conveyance that restricts your plot for the benefit of “the vendor's adjoining land” is useless unless somebody can show what that land was and that they now own it.

The original parties are long dead, and the covenant can only be enforced by someone who can trace the benefit to themselves. Where the benefited land cannot be identified, there is in practice nobody to object.

That is not a licence to ignore the schedule. It is the reason your conveyancer reports the covenants and tells you the enforceability is doubtful rather than telling you they do not exist.

What to do with the schedule

Read it. Old covenants occasionally contain something that still matters — a restriction on building on part of the plot, an obligation about fencing, a prohibition that would prevent something you were planning.

Tell your conveyancer if you intend to do anything the schedule touches. Doubtful enforceability is a comfortable position to be in until somebody tests it, and the person most likely to test it is a neighbour who has just watched you dig foundations.

And tell them about anything you have seen at the property that the report does not mention. The Lexsure wording below makes the point that the conveyancer has almost certainly never been there.

From the e-ROT archive

Report on Title paragraph

Schedule of Restrictive Covenants - Unenforceable due to Age

Archive Lexsure e-ROTScope Benefit and burdenWord count 173Published November 2022

A covenant is essentially a contract between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land which takes the benefit). As a result of a legal principle called “privity of contract”, the covenant will always be enforceable as between the original covenantor and covenantee, even after either or both have parted with the land in question. The same legal principle however (which simply means that a contract is private and binding only on the contracting parties) means that covenants are not always binding on or do not always benefit future owners. In this case the parties involved are unlikely to still be around as the original conveyance dates from {specify}.

For a covenant to continue to be enforceable after the original parties have parted with the land involved, both the benefit and the burden must “run with the land” at either common law or in equity. The rules which dictate whether the benefit and burden run differ depending on whether the covenant is positive or negative. …

Historic wording — DO NOT USE on a current transaction. Published in November 2022 and reproduced exactly, including the merge field and the double space before “In this case”. It explains a general principle; whether it applies to any particular covenant is a question about that covenant.

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