Land Use Controls - Case Study Example

Matthew retained Plot A for himself and sold Plot B to John, who covenanted to (i) use Plot B for residential purposes, and (ii) ensure that the dividing wall remain in good condition. In 2004, Matthew sold Plot A to Simon. The conveyance to Simon assigned the benefit of all covenants to him. Last year, John sold Plot B to Paul and Paul covenanted to indemnify John for any breaches of covenants. Subsequently, Paul neglected the dividing wall claiming that he was not responsible for its upkeep and recently, it has come to Simon’s knowledge that Paul is about to start a car parts selling business in Plot B. In order to advise Simon, the legal aspects of easement and the rights and obligations of the parties are discussed in the sequel. Easements can be conveyed from one individual to another by will, deed or contract, which must comply with the Statute of Frauds and can be inherited pursuant to the laws of descent and distribution. An easement is an interest in anothers land, which does not confer possession, which entitles the holder only to the right to use such land in the specified manner. It is distinguishable from a profit a prendre which is the right to enter anothers land and remove the soil itself or a product thereof, such as crops or timber. An easement appurtenant attaches to the land permanently and benefits its owner. In order for it to exist, there must be two pieces of land owned by different individuals. One piece, the dominant estate or tenement, is the land that is benefited by the easement. The other piece, known as the servient estate or tenement, is the land that has the burden of the easement1. An easement appurtenant is a covenant that is part and parcel of the land and its existence is dependant on the existence of the land to which it relates. An easement in gross is not appurtenant to any estate in land. It arises when a servient piece of land exists without a dominant piece being affected. This type of easement is ordinarily personal to the holder and does not run with the land. At common law, an easement in gross could not be assigned; however, most courts currently allow certain types of easements in gross to be transferred. Easements are categorized as being either affirmative or negative. An affirmative easement entitles the holder to do something on another individuals land, whereas a negative easement divests an owner of the right to do something on the property2. For example, the owner of land might enter into an agreement with the owner of an adjoining piece of land not to build a high structure that would obstruct the light and air that go onto the adjoining owners land. This easement of light and air deprives the property owner who gives it up from enjoying ownership rights in the land to the fullest possible extent and is labelled a negative easement. In Marten v Flight Refuelling Ltd3 it was held that “If an owner of land, on selling part of it, thinks fit to impose a restriction on user, and the restriction was imposed for the purpose of benefiting the land retained, the court would normally assume that it is capable of doing so…” Legal rights are said to be rights in rem or in other words such rights are inherent in the land itself and are therefore imposable against anyone who purchases or acquires an interest in the land. This has also been declared by the statement that legal rights were good against the world. However, equitable rights are only rights in personam or rights that can be enforced against certain groups of people. Equitable interests are capable of binding everyone who takes the legal estate with the exception of a genuine purchaser, who is unaware of this equitable interest. This is the so called ‘notice rule’4. This rule has been applied by the courts to all equitable interests. The requirements of this rule are that the purchaser must act in good faith and he should not have had notice of the right. Accordingly, Lord Wilberforce in Midland Bank Trust Co. Ltd v Green held that: “it would be a mistake to suppose that the requirement of good faith extended only to the matter of notice… good faith is a separate test which may have to be passed even though absence of notice is proved. It is necessary for the person who acquires the estate to give value if he is to rely on the notice rule.” 5 If dominant and servient lands are obtained by the same person, then in general the servient land is not bound by a restrictive covenant, even if the lands are partitioned subsequently. Nevertheless, this is inapplicable in cases where two plots of land within a scheme of development, such that each plot is bound in favour of every other plot even in cases where two or more plots of land are owned by the same person. In instances of sale of land, a vendor might wish to retain the right to restrict activities on the land sold in order to safeguard the value of the retained land. The basis for restrictive covenants as equitable interests is provided by the judgement in Tulk v. Moxhay. In this case Tulk sold the garden in the centre of London’s Leicester Square to Elms subsequent to retaining the ownership of a number of houses that occupied the front part of the square. Elms contracted, for himself his heirs and assigns, with Tulk to keep the square “at all times thereafter….in an open state, uncovered by any buildings….but shall and will continue to keep the same in its present situation” and that Tulk would be permitted to have access to the square. Moxhay, who became the owner of this garden, admitted notice of the covenant but nevertheless, decided to develop the square. Tulk owned the adjoining houses and hence was forced to approach the court in order to obtain an injunction to restrain breach of the covenant. Lord Cottenham LC granted the injunction. While doing so he held that it if a vendor sold part of his land and attempted to protect the value of the remaining land, and if the purchaser had paid a lower price due to this, for a later successor of the purchaser, with knowledge of the covenant, to be able to break it then the covenant gave rise to an equity binding the property enforceable against someone who was not a bona fide purchaser for value without notice6. In order to establish equitable burden to run with the land it is essential that first, the covenant was not intended to be a purely personal obligation. However, the statute now provides that unless a contrary intention is expressed, the covenant is deemed to be made by the covenantor on behalf of himself and the owner or occupiers of the land for the time being7. In Re Royal Victoria Pavilion, Ramsgate a vendor of a theatre covenanted “to procure” that retained property “would not be used for public entertainment by any other medium than public actors during winter months”. The court interpreted “procure” to connote a personal obligation in contrast to a covenant that something would not be done. Therefore the covenant was deemed to be unenforceable against a successor in title to the retained property8. Second, the covenant must be negative in substance in the sense that it must prevent some act from being done on the land. This similar to the situation in respect of easements, wherein there can be no requirement for the servient owner to do something. In Heywood v Brunswick Permanent Benefit Building Society9 it was held that even in Equity the burden of positive covenants to do something will not tenable and this was further confirmed in Rhone v Stephens10. This test is based on substance of a covenant and in the Heywood case, which involved some repairs, Lindley LJ held that the test dealt with “only such a covenant as can be complied with without expenditure of money” and that this created an equitable burden on the land. In Tulk v Moxhay the covenant was negative in substance – “keep uncovered by buildings” - but its implication was not to build and this was enforceable by an injunction. A covenant expressed in negative form if positive in substance falls outside this rule. A covenant can be so separated into its constituent parts that the negative parts can be made binding on successors and the positive made enforceable only against the original covenantor. This took place in Tulk v Moxhay. This principle of severance was applied and the “doctrine of contagious proximity” between positive and negative covenants was set aside in Shepherd Homes Ltd. v Sandham, wherein the covenant was to apportion a piece of land to be an ornamental garden, to have an entrance drive and not to erect a fence. This last requirement was undoubtedly negative, while the other part was positive11. In Wrotham Park v Parkside Homes Ltd12., Buckley J, said that, “…a restriction … bargained …at the time of sale[to] … [give] vendor protection …for the land he retains,…restriction is …imposed for the benefit of the estate…[implying]…[concurrence of]…both sides…that the restriction is of value to the retained land, [then it]…should be upheld …and …should not be discarded merely because others may reasonably argue that the restriction is spent.” Common examples of such restrictions are provided by building restrictions, which could prevent any construction, or specify a maximum height for any constructions, or the restriction that only one house should be built on the plot of land. The purpose of these restrictions is to protect the value of neighbouring property. This enables the protection of the residential nature of an estate by having in place a covenant against use for business purposes or particularly noxious trades. In our present problem, plot B was sold by Mathews to John with two covenants in the registered sale deed. The first covenant is with regard to the proper maintenance of the common wall. This constitutes a positive covenant, which entails expenditure. As per the decisions in Heywood v Brunswick Permanent Benefit Building Society and Rhone v Stephens positive covenants that involve the spending of money are not enforceable. Hence, the first covenant with regard to the maintenance of the wall is not enforceable. Therefore, Simon cannot claim this right. The second covenant is negative, as it restrains the holder of that land from using the land for any other purpose except for residential use. This covenant is enforceable, since the original owner who is holding the adjacent plot for his own use stands to gain by this restriction. However, Mathews, the original owner sold Plot A to Simon with all his rights intact. As long as the original covenantee is in possession of the land benefited by the covenant, it is possible for the covenantee to enforce it against the current owner or occupier of the servient land. The easement rights were incorporated in the deed of conveyance, in respect of the two covenants. Therefore, Simon has all the rights that Mathews had in respect of the land sold by him. Since Mathews had a contract with John in respect of the two covenants, Simon can sue John as well Paul for breach of contract in respect of the second covenant, which restricts the use of this land solely to residential purposes. Moreover, Paul purchased the land from John with notice of all the covenants relating to that land. As such he cannot evade liability for the breach of contract on the grounds that there was a lack of notice and that he was a buyer in good faith. However, it is not possible to sue in respect of the first covenant as it is a positive covenant that involves expenditure of money. Bibliography 1. Beuscher, J.H. 1966. Land Use Controls. College Printing & Typing Co. Pp 85 – 122. 2. Haywood v. Brunswick Permanent Benefit Building Society (1881) 8 QBD 403 3. Lindiwe F. Mthembu-Salter, James Karp, Elliot I. Klayman, Frank F Gibson. 2003. Real Estate Law. Dearborn Real Estate Education. ISBN: 0793149568. Pp. 174 – 188. 4. Marten v Flight Refuelling Ltd (1962) Ch 115 5. Midland Bank Trust Co. Ltd v Green (1981) AC 513 at p. 528 6. Re Royal Victoria Pavilion Ramsgate, (1961) Ch 581 YB00.324 7. Rhone v Stephens (1994) 2 AC 310 8. Section 79 Law of Property Act 1925 9. Shepherd Homes Ltd. v Sandham, (1970) 3 W.L.R. 348, Megarry J. 206 VOL. 31t 10. Tulk v. Moxhay (1848) 41 ER 1143Zetland v Driver. (1939) 1 Ch 1. 11. Wrotham Park v Parkside Homes Ltd, (1974) 1 WLR 798 Read More