Law of Covenants Set to Change

If you are thinking of buying a property, it is important to be aware of any covenants or easements relating to it. Almost two thirds of freehold properties are subject to an easement (which gives someone other than the owner a right over the land), and nearly four fifths of properties have some form of restrictive covenant attaching to them.

The Law Commission has been looking into the problems caused by restrictive covenants and easements and in 2008 produced a report highlighting several ways in which the law is deficient. The upshot of this process is that new legislation has been proposed, which should see the light of day within the next year or so.

The proposed solution involves replacing the existing law on covenants with ‘land obligations’, which can be an obligation to do something or refrain from doing something on the land. The main aspects of the proposals are:

• The obligation would have to be specifically labelled as a land obligation in the document under which it is created and would have to be created in a prescribed form. This would make the obligation sufficiently specific to render the likelihood of a dispute over its meaning or the land concerned unlikely;
• An obligation which creates a legal interest in the land would have to be registered;
• New obligations which pass from owner to owner could not normally be created where title to land is registered; and
• Damages for breach of the obligations could be by way of legal remedies (payment of a sum in damages) or equitable ones, such as an injunction.

There are, in addition, a number of more technical proposals.