The present law governing freehold covenants has been in need of reform. There are currently a number of key areas in need of reforms. Firstly, the fundamental need to distinguish between law and equity as the rules under equity are complicated. Equity can allow the burden of a restrictive freehold covenant to bind successors in title provided that the rule in Tulk is held too[footnoteRef:1]. However, the burden of positive covenants cannot pass common law. While various efforts have been made to permit positive covenants to be transmissible in equity like restrictive covenants, they have been resisted by the courts as seen in Rhone v Stephens. Lord Templeman states that ‘‘to enforce such a positive covenant would be to enforce a personal obligation on someone who hasn’t agreed[footnoteRef:2]’. This was because the House of Lords held that even though equity adds on to the common law it is not a contradiction[footnoteRef:3]. This is an issue as equity should not be able to contradict the common law of contract. It is evident that this rule is inconsistent with positive covenants and is why there is usually confusion with the concept of freehold covenants altogether. [1: Tulk v Moxhay [1848] 41 E.R. 1143] [2: Rhone v Stephens [1994] 2 AC 310] [3: Ibid]
There are however solutions available for positive covenants. For example, the benefit and burden principle which was established in Halsall v Brizell held that one cannot accept benefit without taking the burden that comes with it so it can be possible for an obligation to take place[footnoteRef:4]. Yet, this will only work if the benefit and burden are undistinguishably linked. Another workaround is the chain of covenants where during sale the purchaser covenants to reimburses the seller for the same thing they covenanted. But this method has its flaws as the chain can be easily broken. Additionally, estate rentcharges is an old style of periodic sum where there is an imposition on a freehold transfer to do or pay for something but if they don’t they can go onto land to recover costs. Though this method is commonly unpopular by many property owners since rentcharges may be unacceptable to a lender. While there are other walkarounds available, these methods can be costly, time consuming and it is fairly obvious that these methods lack addressing the gap in the common law. [4: [1957] Ch 169]
Secondly, the law governing the rules of restrictive covenants seems to raise confusion. This issue commonly arises when deciding on whether restrictive covenants are property or contractual rights. Though one could argue that the main reform needed is the toughening of the regulations in relation to the functioning of the benefit especially when the land to which the benefit of a covenant is attached. Therefore, it can be said that these raised issues are possibly why, in contrast, easements have no such conditions.
Thirdly, the issue pertaining to covenants as contractual in a system of registrable interests. While the benefit of covenants passes straightforwardly through each and every part and only concerns the land intended to be benefited. However, in contrary to easements, the benefit cannot be registered since it has no “interest in land”. This begs the question on who can enforce the covenant? In addition, since covenants are contracts, liability between original parties continues, even if one or both parties has left with the land to which the covenant relates to. The problems stated above originating from the sources of covenants in the law of contract that is then crammed into functioning as an interest in land.
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Reformation would mean providing a simpler practical method of accomplishing what can already be done. The Law Commission have tried to deal with the matter by examining potential reform of freehold covenants in its most recent 2011 report. It does this by proposing amendments of freehold covenants as a whole by introducing ‘land obligations’ as a new legal interest in land[footnoteRef:5]. The land obligation would include positive and restrictive obligations and they will be registrable interests. The purpose of these obligations is to finally remove the distinction between positive and restrictive freehold covenants by merging them together therefore losing the difference that the law has created between them. [5: Law Commission, Making Land Work: Easements, Covenants and Profits à Prendre, (Law Com 327,2011) ]
The commission proposes that land obligations should be formed by deed and registration. Both benefitted and burdened land would be capable of registration. If implemented this will insure the effect of future covenants as legal interests and the capability of being enforced against successors but only if the benefit of the obligation touches and concerns of the land. I believe that the concept of ‘land obligations’ would be suitable for neighbours and small groups however it would not be appropriate for “truly interdependent properties” like flats since management is needed.
The question asked previously in this essay regarding who can enforce the covenants, makes the role of covenants more difficult is further discussed by the Law Commission. The Commission supports the argument that the law should enable the enforcement of positive covenants against successors in title. It recommends that the covenant must only be for the benefit of the dominant land. Additionally, original parties will no longer be bound because it would be an interest in land that does not begin as personal.
To conclude, the law on freehold covenants is clearly in need of reform as the problems regarding both positive and restrictive covenants still need improvement. The 2011 reform report attempts to simplify these difficult areas concerning the present state of the law, however, the Government has yet to legalise these recommendations. The need for reform is essential especially as the present situation may cause needless difficulties for individuals looking to either implement covenants or sell land without restrictions in place that were meant to be short-term. Many things have been said in this essay and I hope I have discussed the problems regarding freehold covenants and have discussed how these issues should be addressed while also considering the Law Commissions proposals in its 2011 report on potential reform.
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