|
Advising on restrictive covenants has become much simpler following the CA decision in Crest Nicholson [2004] . This is because it should now be much easier to ascertain who – if anyone – is now the owner of the benefit of the covenant (and so able to enforce it).
The original covenantee can obviously enforce the covenant (under the law of contract), and so can someone to whom he has expressly assigned the benefit. In practice, of course, with older restrictive covenants there is unlikely to be an unbroken chain of express assignments, and the original covenantee will probably not be alive. In that situation, the only person who can claim the benefit of the covenant is someone who is now the owner of nearby land to which the covenant was impliedly annexed at the time it was created. Traditionally, this meant looking carefully at the wording of the covenant to see if it showed an intention that other identified land should be benefited. However, in Federated Homes [1980] it was decided that s78 LPA 1925 automatically implied words of annexation and thus a covenant could be annexed to land simply by the seller being the owner of that other land which benefited from the restriction.
Needless to say, this caused major problems. A covenant that simply said it was with the vendor would then be annexed to nearby land if the vendor was also the owner of that other land which benefited. But, if the conveyance failed to say whether or not the vendor did own any other land – and often it would say nothing – then the purchaser would have great difficulty in finding out whether or not there was other land that was benefited.
The advantage of Crest Nicholson [2004] is that it has removed that difficulty. It has swept away the complications of Federated Homes [1980] and made it clear that the conveyance itself has to identify any other land that is to benefit. Thus, under the new regime, if a conveyance does not make the identity of the benefited land readily ascertainable then it does not demonstrate the necessary intention to annex the benefit of the covenant of that land. And, if there is no intention to annex the covenant to the land, then the right to enforce that covenant will not have passed to any nearby landowners (assuming there has not been a chain of express assignments).
On this basis, you can simply look at the original conveyance to identify which land the covenant has been annexed to. Other nearby landowners can be safely ignored – without having to worry that they now own land that was previously owned by the original covenantee. Crest Nicholson v McAllister [2004] EWCA Civ 410 , discussed in [2004] NLJ 1587.
|
