RESTRICTIVE COVENANTS Essay Example | Topics and Well Written Essays - 1500 words

RESTRICTIVE COVENANTS - Essay Example Restrictive covenants in land law prohibit use of land in a particular manner. They are agreements between landowners in which one party agrees to refrain from use of land as prescribed by the agreement. This paper seeks to discuss concepts of restrictive covenants with the aim of advising parties to a land case. The paper will explore the nature and extent of liability as imposed by restrictive covenants. Facts of the case The case involves a landowner, Connor, who sells part of his land in order to meet his financial obligations. In January, Connor sold off a portion of his property to Jane. Part of the terms of the covenant was that the sold piece was supposed to be strictly meant for residential purposes and by only one family. A month later, Connor sold another part of his land to Bullhorn Company subject to a number of terms. Under the agreement, the immediate and any subsequent purchaser of the property was supposed to develop and maintain a fence around the subject property. The terms also provided that the property would only be used for at most twelve residential units and that the developed houses could only be used for residential purposes. Upon development of twelve independent houses by Bullhorn, the property was sold to separate buyers on terms that the new owners would use the property solely for residential purposes and that fees shall be paid by the owners for maintenance of roadway. Alex, one of the buyers from Bullhorn, has however been using his house as a bail hostel. The other new owners have been aggrieved and as a result refused to repair the boundaries and to pay the maintenance fees. Jane has also sold her property to Oscar who has used it for commercial purpose. Legal issues Covenants A covenant creates legal obligations on the parties to which it imputes liability. Defined as a legal promise, it exposes the promisor to liability as described by the covenant’s terms. Though covenants are considerably similar to contractual agr eements, they do not have to be necessarily supported by consideration. As a result, covenants are regulated by common law and doctrines of equity from different perspectives. In cases where consideration supports the promisors’ intentions, covenants are enforceable under both common law and equity.1 However, law lacks authority over covenants made without consideration. The general principle of covenants is to restrict the use of a piece of land in a given way and once a covenant is made, a landowner looses rights over the land as prescribed by the covenant. Similarly, covenants that have been made over a piece of land bind subsequent owners of the land even though they were not part of the covenant. This general rule can however be exempted by express provisions of individual covenants.2 In determining liability of parties to covenants, the courts applies either or both common law and the doctrines of equity as discussed bellow Covenants under equity Benefits Running covena nts under equity is based on the principles of benefits and burden on rights over pieces of land. Benefits with respect to restrictive covenants can be derived from either, annexation, assignment of the benefits or through building scheme approach. Under the doctrine of annexation, that either can be expressed by the original parties to a covenant or can be implied by statutes, the terms of the restrictive covenants are deemed to bind successive owners of land. This means that a landowner at a particular time is liable for breach of terms of a covenant over the land irrespective of the fact that the timely owner was not part of the covenant. Express annexation was observed in the case of Newton Abbot Co-operative Society v Williamson & Treadgold [1952] Ch 2863