Purchasing freehold - what happens to covenants ?

[Jethro_uk]

We're currently in the process of purchasing the freehold for our
bungalow.

In the mass of paperwork we have accumulated over the years, we have a
copy of the lease itself. It contains a list of covenants ("Covenants on
the part of the lessee") which to my understanding were placed on the
original purchaser, by the person assigning the lease.

Now interestingly, the person selling us the freehold isn't the person
mentioned on this document ("lessor") - presumably they bought the
freehold subsequent to the original transfer (in 1962) ?

Anyway, once we actually hold the freehold, what happens to the covenants
in the lease ? Presumably, since the lease vanishes, then the covenants
do too ?

This is more a question of curiosity (prompted by seeing the thread
below). It's not as if I've been itching to set up a "manufactory for the
purpose of fried fish business" (one of the covenants). However I *would*
be keen to dump the requirement to use a named insurer, or one approved
(for a fee) by the "lessor".

[steve robinson]

Jethro_uk wrote:

> We're currently in the process of purchasing the freehold for our
> bungalow.
>
> In the mass of paperwork we have accumulated over the years, we have
> a copy of the lease itself. It contains a list of covenants
> ("Covenants on the part of the lessee") which to my understanding
> were placed on the original purchaser, by the person assigning the
> lease.
>
> Now interestingly, the person selling us the freehold isn't the
> person mentioned on this document ("lessor") - presumably they bought
> the freehold subsequent to the original transfer (in 1962) ?
>
> Anyway, once we actually hold the freehold, what happens to the
> covenants in the lease ? Presumably, since the lease vanishes, then
> the covenants do too ?
>
> This is more a question of curiosity (prompted by seeing the thread
> below). It's not as if I've been itching to set up a "manufactory for
> the purpose of fried fish business" (one of the covenants). However I

> would be keen to dump the requirement to use a named insurer, or one

> approved (for a fee) by the "lessor".

Depends what the covenants are if they form part of the freehold then
they stay, if they are specific only to the lease then they will no
longer apply

i.e if the freehold has a covenant attached which says yuo cant keep
black sheep you cant this will also form part of the lease , now the
freeholder could add no black sheep with a spotty nose to the lease
which means you cant keep black sheep with a spotty nose.

Once the lease expires ad you become the freeholder unless the vendor
stpulates no spotty noses as a covenant within the freehold it reverts
back to no black sheep.

very few covenants are enforced these days

[R. Mark Clayton]

"steve robinson" <st...@colevalleyinteriors.co.uk> wrote in message
news:xn0i08ne...@reader80.eternal-september.org...

Indeed, but some are - we enforced not blocking our [private] road on a
neighbour who let a hedge grow over more than half of it.

[Roland Perry]

In message <zu2dnaqslr92s2rS...@bt.com>, at 19:35:01 on
Fri, 6 Jul 2012, R. Mark Clayton <nospam...@btinternet.com>
remarked:

>> very few covenants are enforced these days
>
>Indeed, but some are - we enforced not blocking our [private] road on a
>neighbour who let a hedge grow over more than half of it.

Who did you have to get on your side to enforce the covenant - normally
it's the original landowner or the developer. Neighbours are all bound
by the covenants, but can't "enforce" them on one another.
--
Roland Perry

[R. Mark Clayton]

"Roland Perry" <rol...@perry.co.uk> wrote in message
news:qXMDHCrq...@perry.co.uk...

Well we just said if he didn't cut it down then we would. In the event you
catch more flies with sugar than vinegar, so we said if he ordered the
skips, we would help with the clearance (and we did).

[Jethro_uk]

I am very confused :(

[Stuart A. Bronstein]

Jethro_uk <jeth...@hotmailbin.com> wrote:
> steve robinson wrote:
>> Jethro_uk wrote:
>>
>>> We're currently in the process of purchasing the freehold for
>>> our bungalow.
>>>
>>> In the mass of paperwork we have accumulated over the years,
>>> we have a copy of the lease itself. It contains a list of
>>> covenants ("Covenants on the part of the lessee") which to my
>>> understanding were placed on the original purchaser, by the
>>> person assigning the lease.
>>>
>>> Now interestingly, the person selling us the freehold isn't
>>> the person mentioned on this document ("lessor") - presumably
>>> they bought the freehold subsequent to the original transfer
>>> (in 1962) ?
>>>
>>> Anyway, once we actually hold the freehold, what happens to
>>> the covenants in the lease ? Presumably, since the lease
>>> vanishes, then the covenants do too ?
>>

>> Depends what the covenants are if they form part of the
>> freehold then they stay, if they are specific only to the lease
>> then they will no longer apply
>>
>> i.e if the freehold has a covenant attached which says yuo cant
>> keep black sheep you cant this will also form part of the
>> lease , now the freeholder could add no black sheep with a
>> spotty nose to the lease which means you cant keep black sheep
>> with a spotty nose.
>>
>> Once the lease expires ad you become the freeholder unless the
>> vendor stpulates no spotty noses as a covenant within the
>> freehold it reverts back to no black sheep.
>>
>> very few covenants are enforced these days
>
> I am very confused :(

Normally if you are both the freeholder and the lessee, any
provisions of the lease are merged into the ownership and, as you
suggest, vanish. However if there are provisions that might
benefit someone other than the owner or the tenant, those
provisions might not vanish.

There may also be other kinds of provisions that might survive the
purchase you are talking about, but I can't think of any at the
moment.

___
Stu
http://DownToEarthLawyer.com

[R. Mark Clayton]

"Stuart A. Bronstein" <spam...@lexregia.com> wrote in message
news:XnsA08B88917A8D4s...@130.133.4.11...

>
> There may also be other kinds of provisions that might survive the
> purchase you are talking about, but I can't think of any at the
> moment.

The most significant would relate to rights of way and wayleaves. You would
certainly expect court action if you block access or block a communal sewer.

Others likely to be enforced could relate to not building to close to road
or boundaries, fencing, not building a pub or more units or keeping
watercourses clear etc.

>
> ___
> Stu
> http://DownToEarthLawyer.com

[Nightjar]

One house I owned included covenants against turning it into a lunatic
asylum, holding fairs (the garden wasn't *that* large) and keeping pigs.
As the land had originally been sold to cover death duties on a Noble,
our solicitor was able to advise us that the rights passed with the
Noble Title and that the holder was known still to be enforcing them on
other properties sold at the same time.

Colin Bignell

[Chris R]

>
>
> "Jethro_uk" wrote in message news:IPhJr.557828$Mm3.5...@fx04.am4...

I don't think you've received a clear reply to your direct question, so I'll
have a go.

If the exact same person, in the same capacity, holds both the freehold
title and the leasehold title, the leasehold merges into the freehold and
the lease ceases to exist, along with any covenants in the lease. An
exception is if you are in the area of a Leasehold Reform Act scheme - there
are a very few of these around the country, such as the Bournville and
Calthorpe estates in Birmingham, where if you buy your freehold you are
still subject to a lot of the estate covenants.

Covenants already binding on the freehold, or given in the transfer when you
buy the freehold, are not affected.

By "assigning" the lease I take it you mean "granting" it. If not, please
explain. Enjoy running your chip shop.
--
Chris R

========legalstuff========
I post to be helpful but not claiming any expertise nor intending
anyone to rely on what I say. Nothing I post here will create a
professional relationship or duty of care. I do not provide legal
services to the public. My posts here refer only to English law except
where specified and are subject to the terms (including limitations of
liability) at http://www.clarityincorporatelaw.co.uk/legalstuff.html
======end legalstuff======

[Stuart A. Bronstein]

Nightjar <c...@insert.my.surname.here.me.uk> wrote:

> One house I owned included covenants against turning it into a
> lunatic asylum, holding fairs (the garden wasn't *that* large)
> and keeping pigs. As the land had originally been sold to cover
> death duties on a Noble, our solicitor was able to advise us
> that the rights passed with the Noble Title and that the holder
> was known still to be enforcing them on other properties sold at
> the same time.

Someone who bought a property about the same time you did actually
wanted to turn it into a lunatic asylum that holds fairs and keeps
pigs? Too bad they couldn't - might be a public service. ;-)

___
Stu
http://DownToEarthLawyer.com

[Jethro_uk]

A glimmer of light is appearing !

I understand that obtaining the freehold wouldn't allow the (new)
freeholder *(for example) to block off established rights of way.

But surely, the whole premise of *owning* the very land means just that -
and you cannot be beholden to a restriction created by a previous owner ?

[Francis Davey]

Le mercredi 11 juillet 2012 00:45:02 UTC+1, Jethro_uk a écrit :
>
> A glimmer of light is appearing !
>

> I understand that obtaining the freehold wouldn&#39;t allow the (new)

> freeholder *(for example) to block off established rights of way.
>
> But surely, the whole premise of *owning* the very land means just that -
> and you cannot be beholden to a restriction created by a previous owner ?

Yes, you can and in a number of different ways.

Some theory:

The basic rule in English law has always been that only the parties to a contract can be bound by it. The parties are said to be in privity of contract. You and I cannot agree something that will impose obligations on someone else.

That rule (in contract law) always had some exceptions and the Contracts (Rights of Third Parties) Act allows, in certain circumstances, third parties to benefit from a contract, though it still doesn't provide a mechanism for imposing obligations (what lawyers call "burdens") on others.

The landlord and tenant situation is more complicated. Again, for a very long time English law has recognised that successors to a landlord and a tenant should continue to owe the same obligations to one another that arise out of their relationship as landlord and tenant (obligations we might say that are "touching an concerning the land) as did the original landlord and tenant.

The term for this is "privity of estate". The leasehold estate created by any lease or tenancy agreement (which are essentially the same thing) creates a relationship between the parties that allows covenants between them to continue to their successors in title.

So if L covenants with T to keep the roof in repair and the L assigns their interest (known as "the reversion") to L2 and T assigns its tenancy to T2, L2 will be obliged to T2 under the same covenant to keep the roof in repair. This is privity of estate in operation.

[actually there is some fiendishly complicated law here about what outstanding obligations go over a change of ownership and what previous owners may or may not be obliged to do - ignore that for now.]

It has always been thought that you cannot be your own landlord. If L and T are the same person in the same capacity, the leasehold estate "merges" into L's interest (whether freehold or leasehold, if L is a subject to a superior landlord). In the same capacity matters. If L is (say) a trustee of the freehold, but a tenant of the leasehold, then there would not be a merger. The courts have also held that you can avoid merger if you expressly do so.

If there's merger all the covenants that formed part of the L and T relationship go away. You can't owe *yourself* obligations.

Of course the lease may have created other kinds of obligation involving third parties (which is increasingly common) which may complicate matters.

As for freehold, the general rule was that you couldn't attach obligations to freeholds so that they passed with ownership of the land, because there would be no privity of estate. But, in the 19th century, our courts developed the idea that burdens of *restrictive* covenants, that is covenants that stopped you doing things (like building) could pass with the land so that successors in title would be bound.

These covenants were equitable not legal. What that means is too complicated to explain right now, particularly because post 1925 covenants have had to be registered to "work". That's a complicated topic in its own right, but its an example of an obligation that can be imposed on freehold land. Freehold isn't in that sense "free".

There are lots and lots of other things to say. For example its possible for one bit of freehold property to have a right over another - either an easement or (when its a right to take, eg fruit) a profit. Example, a right to go along a path over someone else's land, or a right to receive light, are easements. Easements are property in their own right, albeit attached to land, and don't fall foul of the privity of contract arguments above.

... and there are lots of other examples: estate rentcharges, customary rights, chancel repair obligations, statutory obligations imposed under some legislation designed for the purpose, eg by local authorities on sale of right to buy property, estate management schemes under the leasehold reform acts (as mentioned above) and on and on....

Land law isn't as simple as some people might think :-).

Francis

[Percy Picacity]

> (new)freeholder *(for example) to block off established rights of way.

>
> But surely, the whole premise of *owning* the very land means just that

> -and you cannot be beholden to a restriction created by a previous
> owner ?

Of course there are many restrictions, both covenants etc. and legal
restrictions (like wayleaves and rights of way) that the original
freeholder could be subject to, and he cannot avoid passing them on to
a purchaser. (And could be sued if he fails to mention them.) Also,
in general, a freeholder can sell the freehold subject to new covenants
he has devised: I don't know if this is impossible under a compulsory
sale of the freehold to a leaseholder (clearly a covenant not to live
in a house would defeat the object of compulsory sale), or just have to
be reasonable in some way.

--

Percy Picacity

[Jethro_uk]

On Wed, 11 Jul 2012 08:20:02 +0100, Francis Davey wrote:

> Land law isn't as simple as some people might think .

Indeed. I've always thought that a hallmark of the "first" world, as
opposed to "third" is the infrastructure (via laws, and mechanisms to
enforce them) of trade and ownership is sufficiently entrenched that
people can buy and sell with confidence and certainty ...

Many thanks for a detailed answer.