Covenants

Land Law > Covenants

Freehold covenants are promises relating to the use of land. The rules on whether covenants bind successors in title are among the most technically demanding in Land Law. Candidates frequently lose marks by misunderstanding the distinction between positive and restrictive covenants, by misapplying the Tulk v Moxhay doctrine of restrictive covenants, or by failing to identify alternative mechanisms of enforcement (building schemes, chains of indemnity). Covenants are heavily tested in SQE1.

What Is Covenants in SQE1?

A covenant is a promise relating to the use of land. Covenants are typically found in the title deeds (or on the register) and restrict how the land can be used (e.g., "the land shall not be used for business purposes") or require the owner to do something positive (e.g., "the owner must repair the boundary wall"). The critical distinction is between restrictive covenants (which restrain conduct) and positive covenants (which require action).

The enforceability of covenants against successors in title is the key topic in SQE1. A restrictive covenant that benefits neighbouring land may be enforceable against successors under the principle in Tulk v Moxhay; a positive covenant is generally not enforceable against successors (the "privity of contract" problem). Understanding these distinctions and the exceptions (building schemes, annexation, chain of indemnity) is essential to covenant analysis. Covenants are distinct from easements, which are positive rights, and interact with priority of interests in registered land.

Key Principles for SQE1

• Positive vs Restrictive Covenants – The Core Distinction: A restrictive covenant restrains the use of land (e.g., "no business use"). A positive covenant requires the owner to do something (e.g., repair a wall). The law treats these very differently: restrictive covenants can bind successors (under Tulk v Moxhay); positive covenants do not bind successors as a general rule. This distinction is the foundation of covenant analysis.

• Tulk v Moxhay – Restrictive Covenants: The leading case, Tulk v Moxhay, establishes that a restrictive covenant can bind a successor in title if: (1) the covenant is restrictive in nature; (2) it was intended to benefit land retained by the covenantor; (3) the successor had notice of the covenant; and (4) the successor took the land with notice (express, constructive, or imputed). This doctrine is the key mechanism for enforcing restrictive covenants against successors.

• Notice and Registered Land: In registered land, notice is less significant. A restrictive covenant registered on the charges register binds a purchaser. An unregistered restrictive covenant may still bind if it was entered before 1926 or in certain other circumstances. Under registered land, the register is the determinative document; notice doctrine is largely superseded.

• Annexation and Building Schemes: A restrictive covenant may be annexed to the benefited land (land held by the covenantor at the time the covenant was made). If annexed, the covenant passes with the land to successors of the covenantor. Annexation can be express (stated in the deed), implied (by inference from the circumstances), or by scheme (in a building scheme, where multiple properties are subject to mutual covenants).

• Enforcement and Chain of Indemnity: A person who is not the original covenantee may still enforce a covenant by relying on a chain of indemnity (successive indemnities from successor to successor, protecting each from loss). This is an alternative to Tulk v Moxhay and is frequently used where the original beneficiary is unknown or no longer interested.

• Positive Covenants – The Privity Problem: Positive covenants are not enforceable against successors at law (the privity of contract rule). The original covenantor can be sued; successors cannot. This is a major limitation and is frequently tested. However, there are exceptions: covenants in leases (where privity of estate applies), building schemes (where mutuality applies), and equitable remedies (injunctions where all beneficiaries consent).

• Remedies for Breach – Damages and Injunction: When a covenant is breached, the remedies are damages (compensation for loss) and/or injunction (court order requiring compliance). An injunction requires that the covenant be restrictive, that there be actual or potential harm, and that damages be an inadequate remedy. For positive covenants, remedies are generally limited because successors are not bound.

Exam tip

When faced with a covenant question, first classify it: is it restrictive or positive? If restrictive, can it bind the successor? Apply Tulk v Moxhay: is it restrictive in nature? Did it benefit land retained by the covenantor? Did the successor have notice? In registered land, is it registered? If positive, it generally does not bind successors (note exceptions: building schemes, chains of indemnity). Always ask: who can enforce? The original covenantee? A successor through annexation? Through a building scheme? Through chain of indemnity? The answer depends on the mechanism.

How This Appears in SQE1 Questions

A scenario presents land covenanted in 1950 "not to carry on a business" and "to keep the boundary wall in good repair." The original covenantee, who lives on neighbouring land, has sold to B. The question asks whether B can enforce either covenant against the current owner of the burdened land. The restrictive covenant (no business) can be enforced by B if it was annexed to the neighbouring land (which is likely in a typical residential situation) and the current owner had notice. The positive covenant (repair the wall) is generally not enforceable against the current owner, as positive covenants do not run with freehold land.

This is a classic SQE1 trap.

Common Mistakes Students Make

• Treating positive and restrictive covenants as equivalent – Students often apply Tulk v Moxhay to positive covenants and expect them to bind. Positive covenants do not bind successors except in narrow circumstances.
• Confusing covenant enforcement with covenant creation – A covenant may be created between A and B, but it only binds successors if certain requirements are met. Many students fail to distinguish these steps.
• Missing annexation – A restrictive covenant that was not expressly annexed may still be annexed by implied annexation (where the circumstances show intent to benefit the land) or by building scheme (where multiple properties are subject to mutual covenants).
• Forgetting about chain of indemnity – When the original beneficiary is no longer interested, a chain of indemnity (successive indemnities) can provide a mechanism to recover losses from a breach, even if the covenant does not run with the land.

Quick Summary

• Restrictive covenants can bind successors – under Tulk v Moxhay, if they are restrictive, benefit retained land, and the successor had notice.
• Positive covenants do not bind successors – except in narrow circumstances (building schemes, leases, chain of indemnity).
• In registered land, the register is determinative – a registered covenant binds; an unregistered one may not.
• Annexation is key to binding successors – express, implied, or by building scheme.
• Chain of indemnity provides an alternative enforcement mechanism – where covenant enforcement is weak.

Want to test this now? Try a few SQE1-style questions below before moving on.

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Related Topics

• Easements
• Registered Land
• Priority of Interests
• SQE1 Land Law: Complete Guide

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