Vying for Importance and Peculiarity – the rules relating to Restrictive Covenants, and those relating to Positive/Negative Covenants

The rules relating to restrictive covenants have grown up over a period of 170 years, but are complex, and can at times be surprising.

For example, on the sale of land a covenant may provide that no building shall be constructed, or alteration made to a building, without consent to the plans being first obtained from the vendor. When the vendor dies, this may be construed to mean that since there is no-one left who can exercise what is a dispensing power, all that remains is an absolute prohibition. The covenant will not thereby be regarded as obsolete - with the dire result that the Upper Tribunal (Lands Chamber) is unable to order discharge on this basis under s84(1) of the Law of Property Act 1925. See Re Beechwood Homes Limited’s Application [1994] 2 EGLR 178, CA.

However, in certain circumstances a similarly worded covenant may be held not to amount to an everlasting prohibition with a dispensing power, but a prohibition which is intended to last only during the vendor’s lifetime. The result is then that following his death the covenant can be regarded as spent, enabling a declaration to such effect to be granted or an order for discharge made by the Tribunal on the ground of obsolescence. See Churchill v Temple [2010] EWHC 3369.

In relation to restrictive covenants there is nonetheless a substantial body of learning and cases available to practitioners upon which to arrive at a conclusion as to the legal position, or upon which to base arguments.

This is much less so in relation to positive covenants, and negative covenants which are not ‘restrictive’ covenants. These are not within the ambit of the principles built up in relation to restrictive covenants over the years and are governed by different rules.

In a 2015 survey[1] of 600 Land Registry titles, 41% contained positive covenants, though. Of the 315 deeds then examined, the covenants dated from 1840 onwards, the general trend to include them being upwards. Such covenants are therefore not something that practitioners should overlook.

The rules can be even more complicated, and indeed surprising, than those relating to restrictive covenants.

They will generally only be enforceable by the use of special mechanisms designed to achieve this. There are a number of such mechanisms, but these are subject to technical requirements which must be met, and some clauses which appear to render a covenant enforceable will be unsuccessful in doing so.

For example, where a positive obligation is made a condition of the enjoyment of a right, this may mean it can be enforced as a reciprocal obligation. However, this depends on specific legal elements being present, without which an apparently enforceable covenant will be unenforceable: see Thamesmead Town Limited v Allotey (2000) 79 P&CR 557, CA.

There are also some even greater peculiarities in the rules built up over the years in relation to positive/negative covenants than in the case of restrictive covenants. For example, a covenant requiring fencing may in certain circumstances be enforceable under the fiction that is an easement, with the consequence that the obligation can also arise by prescription: see Crow v Wood [1971] 1 QB 77, CA.

As different rules apply to restrictive covenants and to those which are technically simply negative or positive covenants, the distinction is of considerable importance. It also follows that the special rules relating to covenants of the latter type should not be overlooked.

Steven Gasztowicz QC is a member of Cornerstone Barristers, and author of ‘Scamell and Gasztowicz on Land Covenants’, Bloomsbury, 2018, which deals with both restrictive covenants and positive and negative covenants, and also with planning obligations, and how to free land from restrictions.

[1] Emily Walsh and Cliff Morris, ‘Enforcing Positive Covenants: a practical perspective’, Conv 2015, 4, 316

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