Issues With Easements And Covenants And Proposed Changes In Law

Current Situation of laws

Discuss about a Report on Present Scenario In The Matter Of Easements And Covenant Has Been Creating Problems For The Buyers Of Land And Developers?

There is more demand for land, as it gives us a place to live, food to eat, recreation places and many more things. The most important and valuable aspect is ownership of land.  The matter of adjoining landowners is of great concern, as one exercises the right over the others land. These rights pass along with ownership and are called easements and covenants.

The laws relating to easements and covenants are complex, and there is a need to bring about a radical change. It is necessary to bring change, as the objective is to balance the protection of private landowners with that of achieving public policy. The Law Commission in their publication paper has given recommendations to bring about a radical change in the matter of easements, covenants and profits. If these changes, are brought about, it will modernise and simplify this aspect of law and the whole perspective of the creation of an easement and deal with easements and covenants would change. Land Register shows that nearly for every two third of the land, there exists one easement and for every three fourth of the land that is freehold, there exists one restrictive covenant.

Current Situation of laws:

The existing laws have created problems for the purchasers of land and also to land developers. Thus, the need for radical change is due to the following factors:

1) There is no procedure or manner, in which easements can be terminated or altered, and in such a case, it is not easy to convince the court that, an easement is terminated due to abandonment.

2) There are some easements, such as exercising the right to use of light are very easily acquired or without the intention of acquiring.

3) There is too much of a reduction in the registration of easements, since 2003, but in spite of not being registered, such easements can be acquired without any formalities. It becomes difficult or impossible to find out or determine such easements for the buyer who intends to purchase the property.

4) It is necessary to make use of complex schemes, as the successors are not bound by the positive covenant mechanically.

5) Identification of benefits accruing to land due to restrictive covenants is not easy. Thus, it would not be easy to be released from it or alter or modify it.

Expected Outcome of Recommendations from Public Commission

6) It is not required to register the benefits arising out of restrictive covenant, thus, it is not easy to determine as to who is the beneficiary.

7) The liability of the original landowner remains, even if they have stopped owning the land with a covenant. [1]

As the laws related to easements and covenants are not comprehensive, are outdated, the landowners and developers are facing lots of difficulties, as these laws are of great importance to them.

The intention of the Law Commission is to create a suitable scheme in the matter of easements and land obligations that are compatible with the common laws and Land Registration Act 2002.

Expected Outcome of Recommendations from Public Commission

1) The Impact of recommendations will be observed in the environment,  the economy of the nations and the whole society. Administrative Authorities and Government agencies related to land and property could be affected.

2) The main objective is to make the laws related to easements and covenants simple and its application modern.

by removing the issues faced in the present conditions,

3) The aim is to make the laws in this respect easily accessible and easy to operate, to deal efficiently.

4) It is expected to be advantageous to the private landowners, the business enterprises who buy land or are owners of their land, and the land developers.

5) It is considered that the provisional proposals by Law Commission would be beneficial to the land registry.[2]

Provisional Proposals

The most significant proposals by Law Commission are as follows

a) To abolish an existing method of prescriptive easements and create a single method of acquiring easement rights by prescription.

b) To rationalise the termination or discharge of easements that are at present in existence.

c) To bring about a creation of new interest in the land namely Land Obligations to replace the positive covenants and the restrictive covenants.

d) To modernise the provisions in the statutes to terminate and extinguish or alter restrictive covenants and to make application of those rules to easements and [3]

Easements

English Law has not given a definition of easements anywhere; Easements means to use the neighboring piece of land or right over the other’s land. Examples of easements are right of way or right of storage or using the shed of neighbouring land. The elements of an easement are clearly established in the case of Ellenborough Park [1955] 3 All ER 667, the honourable judge determined  four criteria of existence of an easement 1)There must be two types of qualities of persons one that is dominant and the other a servant tenement 2) an easement should allow the person with dominant type to be accommodated 3) the two person should have either dominant or servant type of quality. Which in other words mean that they should be different persons. 4) the right exercised on the land cannot be called an easement if it is not granted.[4] There are different ways in which creation of an easement takes place that is express or implied or by way of prescription. The easement implies the rights which one person who is owning land obtains on the land of another. The rights of using light, rights of using water, the right of using pathway are examples of easements. Some easements allow the landowner, a right to prevent adjoining landowner to do something on his land. They are called negative easements, for example, A prevents the neighbouring landowner B from removing any piece of land or structure from B’s land as that piece or structure supports A’s land. Once, the validity of an easement is established, all the things on land along with easements will give the benefit of it to all the buyers who purchase the property and the legal professionals. To conclude, in the matter of implied easement, it should be immaterial whether an easement was acquired by grant or by any reservation.[5]

Provisional Proposals

Easements may be formed by agreement or deed or by way of will. It can be created by express deed or by implications. Section 1 (2) of the Law of Property Act 1925  along with Section 52 provides that, an express easement must be created by a deed. It states that conveyances of land will be void if an express easement is not created by deed. In certain cases, an easement is created by a person for himself, for his convenience or due to dire need while selling a part or whole of his land along with easement, for passing on the property by way of sale. The creation of an easement may be implied after using it for a long period, by prescription. The landowner was aware of it, but did not say anything and kept allowing to use, not prevented the user, thereby creating an easement by prescription. The time limit for some years is decided by State is twelve to twenty-one years. The use here means should be continuous and that the owner should be aware of it, but the owner has not approved it. Such a creation of an easement should be used by the successors to continually for establishing the right to an easement. In the case of Orme v Lyons [2012] EWHC 3308 (Ch), it was held by the deputy adjudicator that, there had been enough of proof in the matter of use of a track to determine and conclude, that the respondents had a right of way by vehicles on the basis of an easement by prescription on the rule of grant that was lost. Holmes v Evans [2012] EWCA Civ 941 (CA),  the Honourable Judge was right in arriving at a conclusion, that the claimants had a right of way to traverse any time over a track and bridge for the reasons of agriculture along with agricultural equipment, like tractor, animals, vehicles used for agricultural purposes and restraining defendants by way of injunction from exercising those rights of  claimant. [6]

Discharge or termination of an easement

An easement can be discharged, if an easement stops existing or when it does not make any sense, for example, merger, the land is either bought by dominant tenement or servient tenement. It can be terminated, if a dominant serving releases an easement or is abandoned. It cannot be said to have terminated, if it is not used at all. In certain cases, an order of the court is required for terminating an easement.[7]

Easements

Covenants

Covenant is defined as a restriction imposed on the landowner, as to how can one use his land. It is an agreement to do something or not to do something. It creates a burden on the landowner for the benefit of adjoining landowner or Government body. Covenants are the contractual obligations. Thus, like a contract, the person who promises is bound by the covenant and the covenants can be enforced by the person who receives given the covenant. If a promise is made in respect of the land and is restricted to the land owner at that time or user of land, then, in that case, the covenant may have such features that are connected to that property.

There are two types of covenants, positive covenant and negative covenant. When a person promises to do a certain thing, it is a positive covenant. For example, when a landowner promises to maintain the fence or covenants to erect a wall, it is the positive covenant. A promise to refrain from doing something that is a promise, not to do a particular thing, and then, it is a negative covenant. Negative covenant is also referred to as a restrictive covenant. for example, a landowner covenants, not to construct above the specified height, it is a negative covenant. The Covenants must be in writing and should be shown in the deed and the disclosure of a covenant to the purchasers is a must.[8]

Conditions necessary for a Covenant

1) The Covenant should  be in written form or deed, to the satisfaction of Statute of Frauds

2) The original landowners to the covenant agreement must have the intention to bind the successors by the agreement.

3) The landowners after original owner must have actual intimation or constructive intimation by way of notice of the covenant, at the time of purchase of the land.

4) The covenant must be in the form of concern for the land; It must show connection to the land by enjoying it or using it.

Covenants are strictly interpreted in the court of law. In case, the deed or writing of covenant is not clear or is ambivalent, in respect of its existence, the Courts will be in favour of the free alienation or transfer of property. The landowners, in certain cases, may file a petition in court to discharge or alter the covenants. In the case of Land on the east side of Bowen Road Rugby, Warwickshire, CV22 5BB (2013) UKUT 034 (LC), the applicants, in this case were refused a modification of restrictive covenant, as they could not prove ground (aa) of Section 84 (1) of the Law of Property  Act  1925. It was observed that covenant was of practical benefit to one of the people objecting, and substantially advantageous to another objector.

The covenant may be affirmative or negative. It is an affirmative covenant, where landowners have to perform strictly certain things, for example, keeping a lawn tidy, keeping the surroundings neat and tidy. It is a negative covenant when the landowner is not able to perform certain things. For example, to block a natural or scenic view.[9]

Covenant that states not to open any business that would be in competition with the business of the adjoining or adjacent landowner can be enforced as it is a covenant that runs with the land. But a covenant that puts restrictions on sale to particular persons are not enforceable.

In England, Under Common Law, the advantage of a restrictive covenant in respect of land runs along with the property, if the following three requirements are satisfied.

1)The covenant must be advantageous to land and not to any individual landowner, which means the covenant must not be of personal nature.

2) The covenant must show a concern and touch. The covenant must impact the value or the cost of the land and the manner in which it has to be used.

The land that is given an advantage or benefit should be distinguishable.

Under Common Law, the responsibility or burden of a restrictive covenant does not run. The responsibility or burden of a restrictive covenant is enforceable in law only in very limited situations under the test of burden, which says that the person is enjoying the benefits from land, must also shoulder the responsibility. In the case of Halsall v Brizell (1957) Ch 169,  The successors of land to the original covenantor were bound by the covenant of maintenance and upkeep of road, as he had chosen to take the benefit.[10] A positive responsibility or burden is enforceable. If a person chooses the option of not taking the benefit, than the burden does not fall on him. A restrictive covenant to make the contribution in respect of common land will not bind the successors if they have no right to use them. The Tulk v Moxhay (1848) EWHC Ch J 34. (1848) 41 ER  1143, was a landmark case, where it was held that restrictive covenant runs with the land, that means all the prospective buyers would be subjected to restrictive covenant conditions.[11]

Kevin Fox Gotham in his article on the urban land development and restrictive covenants states that there were two ways in which restrictive covenants were applied in the matter of Kansas City. The Community developers made use of restrictive covenants on the subdivided new land, before constructing the houses. The second type of restrictive covenant was made application of by homeowners associations by bordering the black neighbours in the already existing white neighbourhoods. This continued till the Supreme Court made a declaration that, restrictive covenants are not enforceable. Inspite of the Supreme Court Judgement, restrictive covenants in respect of racial segregation continued till 1960.[12] The second was by the homeowners association given black movement. The homeowners did all the possible things to prevent blacks in the white neighbourhood. It is a debatable question in the United States in the matter of urban space, race and racial segregation by use of restrictive covenants. Racial segregation is still persistent in the United States though numbers of anti-discrimination laws are passed.[13]

It is an expectation of every landowner, who buys land, that, they are entitled to occupy and use land and enjoy the possession of every part and parcel of land without any interference from the adjoining neighbours. But there are restrictions on such an enjoyment by local authorities or any instructions that are available in the record. The land developers impose restrictions on the larger plots that are further divided into small parts and submit to local authorities a subdivided part as new land. Thus, developers impose restrictions on subdivided plots which are in the form of easements and covenants. The buyer of the property will be subjected to such conditions imposed on a subdivided plot of land.[14]

Homeowners Association is normally responsible for the areas that are used in common by all the homeowners such as recreational facilities, parking area, garden or any common area on the plot of land. It is their duty to see that all the owners comply with the restrictive covenants. The homeowners association has to see that all the owners share proportionately in the care and maintenance of the common land. Thus, it is necessary for a buyer to determine before the purchase of land if there are any covenants which he cannot comply with.

In the case of Norwich City College v McQuillin (2009) All ER (D) 300, the college made an application in Court under Section 84 of the Law of Property Act 1925 for termination of the covenant that prevented the college to redevelop a part of the land conveyed to them.[15] It is provided in Section 84 (2) that the Court can exercise their power to determine whether a covenant was affecting the land or as to who can enforce or terminate.The Court granted termination of the covenant as rest of the land was conveyed, and there was no person who would benefit by covenant.[16]

In the case of Housden v Conservators of Wimbledon and Putney Commons (2008) EWCA Civ 2001 WLR, Honourable Judge stated that in view of the rapid development of land and more homes on ownership, there has arisen an increasing burden on the available land and the reliance on car for travelling not only inside, but outside the outskirts, an urgency is thus felt in the laws of prescription to become simpler is required.[17]

The rapid expansion of home ownership, the increasing pressures on land available for development and the almost universal reliance on cars for travel outside the city all mean that the need for a simpler law of prescription has become of more rather than less concern.

Law Commission’s Ninth Program led to two main developments. One was the passing of legislation of the Land Registration Act and second was the passing of legislation of the Commonhold and Leasehold Reforms Act 2002. The reason for freehold flats not being sold is the current law regarding land that is freehold. is the covenant that puts a positive obligation on the landowner does not pass on to the successors. This problem is solved by the sanctioning of Commonhold system.[18] Hence, the properties that were interdependent, for example, flats that share the services and the land and the houses that are separate but share an estate road can be marketed and sold as commonhold. The responsibilities can be shared by a community on commonhold by forming an association or a group; that means there is no obligation on landlord anymore, which was disapproved on practical grounds and principally. Thus major drawback in current law was rectified to a certain extent by commonhold. But there is still a lacuna in law, as there is no mechanism that is effective in the matter of imposition of simple obligations such as repairing the fence between two neighbouring or adjoining lands.

Law Commission published Consultation Paper in 2008, wherein laws relating to interest in land such as easements, covenants and profits were explored. The main focus was on recommendation solving the familiar and important issues of intricate rules regarding the acquisition of easements, an unclear position of parking spaces and rights thereof and many more obligations for the development of freehold land. The paper gave attention to the common law, particular issues such as rights to use the light of another was not dealt with at all.[19]

Law Commission considered it essential to conserve human rights while trying to achieve a radical change in the interest of land. As Article 1 of European  Convention states that each and every individual whether natural or legal has right to enjoy and use his things in his possession. No person can be deprived of the things; he possesses only if, it is in the public interest. Thus, any reform that is against public policy may create controversies litigations.[20]

Conclusion

It is suggested and concluded that the Present Scenario In The Matter Of Easements And Covenant Has Been Creating Problems For The Buyers Of Land And Developers. It is, in turn, affecting the marketing of flats.

It has given rise to some disputes between adjoining landowners in the interest of land created by easements and covenants. The reforms and recommendations led to the making of a draft bill and was submitted in 2010. The proposal of Law Commission was supported by legal professionals and soloicitors. It was the contention of solicitors, that, the existing laws on easements, covenants are not rational, not easy, complex and in a mess, irrespective of its benefit accruing to the landowners and that a single mechanism of law should be created in respect of easements and covenants. It is necessary to shed off  restrictive covenants that are burdensome for the property owners. Law Commission’s recommendations in the matter of acquisition of easements and modifications or discharge of easement would make the matters simple and easy for landowners. Since, the covenants and easements are private planning by adjoining landowners, has proved burdensome in marketing the sale of real property, if the laws relating to this interests in land, are made by Government, as per the draft bill of Law Commission, the developers and the landowners will be in a better position to deal with the interest  in land by way of easements and covenants.

References

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Bell G, ‘Restrictive Covenants In Employment Contracts’ (Out-law.com, 2016) <https://www.out-law.com/page-7086> accessed 26 February 2016

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[1] Lawreform.vic.gov.au, ‘Making Easements Easier | Victorian Law Reform Commission’ (2016) <https://www.lawreform.vic.gov.au/media/making-easements-easier> accessed 26 February 2016.

[2] Lawreform.vic.gov.au, ‘Easements And Covenants: Recommendations | Victorian Law Reform Commission’ (2016) <https://www.lawreform.vic.gov.au/projects/property/easements-and-covenants-recommendations> accessed 26 February 2016.

[3] Lawcom.gov.uk, ‘Easements, Covenants And Profits À Prendre | Law Commission’ (2016) <https://www.lawcom.gov.uk/project/easements-covenants-and-profits-a-prendre/> accessed 26 February 2016.

[4] swarb.co.uk, ‘In Re Ellenborough Park; CA 15 Nov 1955’ (2015) <https://swarb.co.uk/in-re-ellenborough-park-ca-15-nov-1955/> accessed 26 February 2016.

[5] E. R. H., ‘Easements. Necessity Of Words Of Inheritance To Create Easement In Fee By Reservation Under Virginia Statute’ (1926) 12 Virginia Law Review.

[6] Bailii.org, ‘Holmes & Anor V Evans & Anor [2012] EWCA Civ 941 (11 July 2012)’ (2016) <https://www.bailii.org/ew/cases/EWCA/Civ/2012/941.html> accessed 26 February 2016.

[7] William C. Spaulding, ‘Real Estate Encumbrances: Deed Restrictions, Liens, Easements, And Encroachments’ (https://thismatter.com/, 2016) <https://thismatter.com/money/real-estate/encumbrances.html> accessed 26 February 2016.

[8] Gillian Bell, ‘Restrictive Covenants In Employment Contracts’ (Out-law.com, 2016) <https://www.out-law.com/page-7086> accessed 26 February 2016.

[9] S. J. Bailey, ‘The Law Of Property Act, 1925, S. 130 (2)’ (1936) 6 Cam. Law. J.

[10] Digplanet.com, ‘Learn And Talk About Halsall V Brizell, 1957 In British Law, 1957 In Case Law, English Land Case Law, High Court Of Justice Cases’ (2016) <https://www.digplanet.com/wiki/Halsall_v_Brizell> accessed 26 February 2016.

[11] Bailii.org, ‘Tulk V Moxhay [1848] EWHC Ch J34 (22 December 1848)’ (2016) <https://www.bailii.org/ew/cases/EWHC/Ch/1848/J34.html> accessed 26 February 2016.

[12] Harvey J. Goldschmid, ‘Antitrust’s Neglected Stepchild: A Proposal For Dealing With Restrictive Covenants Under Federal Law’ (1973) 73 Columbia Law Review.

[13] Gillian Bell, ‘Restrictive Covenants In Employment Contracts’ (Out-law.com, 2016) <https://www.out-law.com/page-7086> accessed 26 February 2016.

[14] Gov.uk, ‘Practice Guide 52: Easements Claimed By Prescription – GOV.UK’ (2015) <https://www.gov.uk/government/publications/easements-claimed-by-prescription/practice-guide-52-easements-claimed-by-prescription> accessed 26 February 2016.

[15] vLex, ‘Housden & Anor V Conservators Of Wimbledon & Putney Commons, Court Of Appeal – Civil Division, March 18, 2008, [2008] EWCA Civ 200,[2008] 3 All ER 1038,[2008] 1 WLR 1172 – Case Law – VLEX 52560393’ (2016) <https://court-appeal.vlex.co.uk/vid/-52560393> accessed 26 February 2016.

[16] https://www.dijit.net Dijit New Media, ‘Falcon Chambers – Janet Bignell QC’ (Falcon-chambers.com, 2016) <https://www.falcon-chambers.com/members/member.cfm?id=171&show=sub3> accessed 26 February 2016.

[17] vLex, ‘Housden & Anor V Conservators Of Wimbledon & Putney Commons, Court Of Appeal – Civil Division, March 18, 2008, [2008] EWCA Civ 200,[2008] 3 All ER 1038,[2008] 1 WLR 1172 – Case Law – VLEX 52560393’ (2016) <https://court-appeal.vlex.co.uk/vid/-52560393> accessed 26 February 2016.

[18] Dijit New Media h, ‘Falcon Chambers – Guy Fetherstonhaugh QC’ (Falcon-chambers.com, 2016) <https://www.falcon-chambers.com/members/member.cfm?id=156&show=sub3> accessed 26 February 2016

[19] Find Laws, Legal Information, News & Solicitors – Findlaw UK, ‘What Do I Need To Know About ‘Easement’? – Findlaw UK’ (2015) <https://findlaw.co.uk/law/property/neighbour_disputes/easement.html> accessed 26 February 2016.

[20] Gov.uk, ‘Practice Guide 52: Easements Claimed By Prescription – GOV.UK’ (2015) <https://www.gov.uk/government/publications/easements-claimed-by-prescription/practice-guide-52-easements-claimed-by-prescription> accessed 26 February 2016.