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Restrictive Covenants and Freehold Land

A Practitioner's Guide

FROM £85.50

An essential guide to the law of restrictive covenants affecting freehold land

Listen to Andrew Francis discuss the law of restrictive covenants affecting freehold land.

 This popular work has established itself as an essential guide for the practitioner requiring an understanding of the law of restrictive covenants affecting freehold land.  In this book a complex topic is made intelligible by easily understood text, complemented by flowcharts and checklists.  This enables the adviser to solve problems quickly and accurately.  The author brings his extensive experience of cases involving covenants to the work, dealing with points that arise in practice both comprehensively and with authority.

 The work considers all the key areas of law and practice affecting restrictive covenants. This new edition has been completely revised and updated with more detailed treatment of major issues affecting restrictive covenants, including:
  • consideration of recent legislation affecting restrictive covenants and Public Bodies including the Localism Act 2011
  • full references to recent case-law on injunctions as the primary remedy for breach of covenant and developments in release fee/”Wrotham Park” damages
  • new Upper Tribunal (Lands Chamber) (UTLC) Rules and Practice Directions with reference to and summaries of all recent cases in the UTLC and in the Court of Appeal in applications under s 84(1) Law of Property Act 1925
  • extensive appendices with statutory and other material and precedents, all of which are available on the accompanying free CD-ROM
  • Introduction
  • Flowchart and checklists
  • Identification of covenants which are truly restrictive
  • Identifying the existence of restrictive covenants which are valid and binding
  • Making covenants work: is this covenant enforceable?
  • Enforcement of covenants between the original covenanting parties
  • Enforcement of covenants by the original covenantee against a successor of the original covenantor: making the burden of the covenant run
  • Enforcement of covenants against the original covenantor by a successor of the original covenantee: making the benefit of the covenant run
  • Enforcement of covenants by a successor of the original covenantee against a successor of the original covenantor: making both the benefit and the burden of the covenant run
  • Restrictive covenants created by public authorities and other bodies
  • Acquisition of land for public purposes and the effect on restrictive covenants
  • The power of local and other authorities to override restrictive covenants
  • Extinguishing restrictive covenants
  • The construction of restrictive covenants
  • Litigation and restrictive covenants
  • Discharge and modification of restrictive covenants under law of property act 1925, section 84(1) by the lands tribunal
  • Practical drafting and transaction points
  • Insuring restrictive covenants
  • Restrictive covenants and commonhold title
  • The Human Rights Act 1998 and restrictive covenants
"Andrew Francis has a relaxed and readable style, and within a relatively short book there is a great deal of information"

"Andrew Francis's excellent Restrictive Covenants and Freehold Land - A Practitioner's Guide ... An area of law described on the dust jacket as "very complex" ... desperately needs a book like this ... Marvellous"

"For the practitioner, advising clients in the often fraught area of restrictive covenants calls for the highest possible standard of clarity – which fortunately this book supplies in plenty.  Recently published by Jordans in a new fourth edition, the content of this authoritative and highly regarded book has been completely updated and revised, with the main issues affecting restrictive covenants dealt with extensively and in detail.

 Distinguished by its clarity and practical approach, the book is a boon to practitioners needing to steer their clients through the pitfalls of property investment.  Certainly property buying is problematic enough in the UK without the usually unexpected problem of a restrictive covenant raising its head.  This book therefore, is purpose designed to guide the practitioner and in turn, the client, around the dreaded difficulties presented by this form of complication.
 This new edition deals with a number of developments that have emerged since the previous edition was published in 2009.  To cite just one example, the book refers to the running of both the benefits and the burdens of restrictive covenants by reference to the most recent cases on the subject, bearing in mind that almost any restrictive covenant will impose a burden on one party while conferring a benefit on another.

 Definitely this is a legal text every practitioner involved in property transactions should acquire.  Andrew Francis has endeavoured to state the law as of 8 February 2013."
Read the full Review

     Phillip Taylor and Elizabeth Taylor of Richmond Green Chambers

‘It were good, therefore, that men in their innovations would follow the example of time itself; which indeed innovateth greatly, but quietly, by degrees scarce to be perceived.’

 (Francis Bacon, Essay – Of Innovations).
 Nearly fifteen years have passed since the publication of the first edition of this book. In that time much has changed in the law and practice relating to restrictive covenants. Some changes have been palpable and others less so, and my task has not only been to reflect them in each edition, but also to ensure that this work continues to live up to the promise in the title; it must still function as ‘a practitioner’s guide’. The particular task in this fourth edition has been to revise the text without radical change to the structure, so that its practical nature is still to the fore. Thus, for the sake of clarity many lengthy footnotes have been brought into the main text. I have also resisted the temptation simply to add cases to footnotes for the sake of it.

 I have been mindful of Francis Bacon’s words set out above. Innovations have been introduced into this edition (as with previous ones) but ‘quietly’, such as the brief treatment of the jurisdiction of the Adjudicator to Her Majesty’s Land Registry, and the greater discussion of some of the points of difficulty left open in earlier editions, such as whether covenants are personal, or not. In addition, for example, there is an expanded part of Chapter 14 on the meaning of words often found in the restrictions within covenants. Also the conditions under which section 237 of the Town and Country Planning Act 1990 can properly be engaged are dealt with in more detail than before in Chapter 12.
 As would be expected, this edition incorporates developments which have occurred since 2009. For example:
  • It refers to the rules relating to the running of the benefit and the burden of restrictive covenants by reference to the most recent cases on this topic, as cited in Chapters 7 and 8. This is usually the most difficult aspect of the law of restrictive covenants and the cases continue to shed light on how to approach and apply these rules.
  • The recent expressions by the Supreme Court and Court of Appeal on the principles of construction of documents (for example in Rainy Sky SA v Kookmin Bank (2011)) as well as the practical application of these principles, are set out in Chapter 14.
  • The recent and repeated emphasis by the Courts on the injunction as the prima facie remedy for breach of property rights is stressed in Chapter 15.
  • The decisions of the Upper Tribunal (Lands Chamber) and in the Court of Appeal since 2009 concerning applications under section 84(1) of the Law of Property Act 1925 to discharge, or modify covenants emphasising the fact-specific nature of the jurisdiction, the importance of expert evidence addressing the correct questions under section 84(1) and finally the significance of the position of objectors who are ‘custodians of the public interest’ are all covered in Chapter 16.
I am aware that the practical nature of the book is of great importance to many readers, whether lawyers, other professionals, or lay people. The increasing pressure on land use, especially in residential and built-up areas, causes existing restrictive covenants to be brought to the fore. What do these covenants mean, can they be enforced, and can they be removed, are all frequently asked questions. This is particularly so when, rather than moving house with all the expense of doing so, owners are inclined to extend their properties; or as is often the case these days, to demolish the existing property and rebuild, often on a much larger scale. The same questions arise when there is ‘infilling’ or ‘back land’ development which may be obtrusive to adjoining owners and where the planning system will not offer any protection. In such cases there are issues over covenants and disputes arise. It is hoped that the structure of this book will assist those needing guidance in these instances, as my aim is to provide clear and effective pointers to the rights and obligations which exist and the best way to deal with them, and not necessarily by costly litigation in Court. I also trust that the book will be a guide to those seeking to agree new terms of covenant and the precedents in Appendix 7 are there for that purpose.

 As to the future, and the reform of the law of restrictive covenants affecting freehold land, as I remark at Chapter 1, para 1.29 below, it is disappointing to record that at present there is no public indication that H.M. Government is planning the introduction of legislation to implement the Law Commission’s Report and Draft Bill published in June 2011 on the reform of Easements, Covenants and Profits à Prendre; Law Com 327. It would be comforting to believe that within the four to five year life of this edition, legislation will be introduced to reform the law of restrictive covenants in the manner suggested in that Report. If that happens, the fifth edition will be markedly different from the present one. But for the present, we must make do with the law as it is, with all its myriad difficulties.
 I must express my sincere thanks to the following who have greatly assisted in the preparation of this new edition:
  • George Bartlett QC, the President from 1998 to 2012 of the Lands Tribunal and then the Upper Tribunal (Lands Chamber) who has kindly consented to write the Foreword to this edition.
  • Mark Davies of Stewart Title who has updated Chapter 18 on insurance. I am also most grateful to him and Stewart Title for consenting to the reproduction of the terms of the Restrictive Covenant Indemnity Policy in Appendix 5.
  • Keith Gordon, Barrister of Atlas Chambers, Gray’s Inn, who has brought the material relating to Tax at the end of Chapter 15 up to date.
  • Professor Elizabeth Cooke, Law Commissioner, who has assisted with my inquiries about reform and commonhold statistics.
  • Athena Markides, Barrister of Lincoln’s Inn, who has revised Chapter 20 on Human Rights. Drawing on her experience in the regulatory field, she has written the concluding parts of Chapter 14. This deals with the effect of the Competition Act 1998 and EU Treaty obligations upon land covenants which, since April 2011, must be compliant with Competition Law for their validity.
  • Sophie Holcombe, Barrister at Serle Court, who has assisted with some of the cross-references to the 5th Edition of Halsbury’s Laws of England in the text.
  • Hampstead Garden Suburb Trust Ltd, which has kindly consented to the reproduction of the image on the cover and in publicity material for this edition.
I must specifically thank my instructing solicitors, valuation surveyors and direct access clients who have supplied instructions concerning restrictive covenants, invariably posing challenging questions which I have attempted to resolve. I am sorry I cannot name them all in this Roll of Honour. The issues raised by their instructions have often led to points made in the text. In some instances reported cases, now cited in the text, have resulted from the dispute behind the instructions. I must also express my gratitude to all my friends at the Bar who have been most generous with their helpful suggestions and comments, thereby enriching this edition.

 I am, as ever, grateful to the publishers Jordans, and in particular to my commissioning editor, Tony Hawitt and his team for their continuing assistance and to Claire Banyard who has worked very hard to put the text into final proof copy.

 Finally, I must thank my wife and family for having to endure my absence when writing, particularly at the latter end of 2012 while I was struggling to complete the text for this fourth edition.

 All errors and omissions in this book are my own. Readers are encouraged to contact me directly, or via the publishers if they spot any mistakes which can be corrected for the next edition, or wish to make suggestions for it.
 I have attempted to state the law as at 8 February 2013.

 Andrew Francis,
     Serle Court
     6 New Square
     Lincoln’s Inn
     London WC2A 3QS
8 February 2013

A note on the text

 There are two changes due to come into force after publication which will have a very minor impact on the contents of this book.

 First, I have tried to anticipate certain changes to the Civil Procedure Rules (‘CPR’) due come into force in early April 2013. So far as material to this book they affect costs rules under Part 44 and the references to the revised CPR are noted in Chapter 15.

 Secondly, in the context of the brief reference to Adjudication under the Land Registration Act 2002 at the end of Chapter 15, I mention the change due to take place on 1 July 2013 whereby the present jurisdiction of the Adjudicator to Her Majesty’s Land Registry will be moved within Her Majesty’s Courts and Tribunal Service to a new Property Chamber.

 As both changes will take effect after the anticipated publication date, readers are encouraged to check the relevant websites (Ministry of Justice and HMCTS) for the most up-to-date version respectively of the CPR applicable in the Courts and the new Procedure Rules and Practice Directions applicable in the new Property Chamber.

 Rule 1
Whenever you have a problem which requires looking at restrictive covenants ask, what does the covenant mean? Always start here.
 Is my client (or the other side) doing anything which falls outside and thus in breach of it?
 If the answer is no – end of problem.
 (Under this rule in Chapter 14 we look at the principles of construction, particularly in the light of the leading authorities which advocate a process which seeks a commercially sensible construction. We also look at the problems posed by particular words often found in covenants and those where consent is required for development.)

 Rule 2
 If what is proposed to be done, or is being done, falls within the covenant, is it restrictive? This means that for the covenant to be restrictive it must be negative in effect. (Under this rule we look at what is a ‘restrictive covenant’ as opposed to a positive one.)

 Rule 3
 If the covenant was created after 31 December 1925 and if the person against whom it is to be enforced is not the original party who gave the covenant, that person is not going to be bound unless the covenant is registered. If it is not, you cannot be sued on the covenant; so end of story. (There may be an exception in rare cases where the Land Registry have failed to register covenants and the register is rectified against you.) Under this rule we look at the manner in which successors in title to the original covenantor can be bound; in the case of pre-1926 covenants the doctrine of notice still applies; for those covenants created after that date we look at either the D(ii) entry, or the entry on the register according to whether the title is registered or not.

 Rule 4
 If you are not the original person in whose favour the covenant runs you will have to show that you have the benefit of the covenant. This is often the difficult bit, as not only are the rules tricky, the Land Registry do not help as their policy is not to enter the benefit of the covenants on the register of title to the land which can (arguably) claim such benefit. If you don’t have the benefit, you cannot sue; so end of story again. (Under this rule we look at the effect of section 78(1) of the Law of Property Act 1925 on post-1925 covenants and, in cases to which that section does not apply, at express annexation, express assignment of the benefit and at building schemes.)

 Rule 5
If you are unable to show who has the benefit, you may be able to convince an insurance company to take on the risk (at a price) of someone eventually proving you wrong. (Under this rule we look at the factors which apply to those cases where indemnity policies may be available.)

 Rule 6
 If you can show that you have the benefit and that the neighbour is subject to the burden you may be able to issue a claim in court to prevent the threatened eyesore from ever happening – or at least to get damages for it. But what does it take to get an injunction, and what sums of damages are we talking about?
 Recent cases show that the remedy of the injunction is the ‘default setting’ as Chapter 15 makes clear.

 Under this rule we look at the vexed question of injunctions, particularly the ‘David and Goliath’ problems posed by interim applications. We also look at damages and the principles applicable to ‘release fee’ damages where the law is developing.

 Chapter 18 looks at how insurance can be placed to cover the risks of claims to enforce.

 Rule 7
 There are special rules which apply to local and public authorities which allow them: (a) to enforce certain types of covenant even though they own no land in the vicinity; (b) to do things in breach of a covenant – or even to override it – on payment of compensation only. These need to be examined carefully.

 Rule 8
 It is possible to remove or vary restrictive covenants by application to the UTLC under section 84(1) of the Law of Property Act 1925. In addition the Court can declare what covenants mean and who may enforce them under section 84(2) of that Act.

 In addition, Chapter 19 examines the effect on restrictive covenants where the title is held commonhold. Chapter 20 discusses Human Rights Act matters.

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