Post-2009 Act Freehold Covenants

2009 Act Reforms

The 2009 land law reforms apply to covenants entered after 1st December 2009. The Act provides new rules for the enforcement of the covenants between owners and successors of both the freehold dominant (benefitted) land and the servient (affected) land.

The dominant land is the freehold land which benefits from the covenant, to which the other land is subject. The servient land is the freehold land which is subject to a covenant, benefitting the other freehold land.

The dominant and servient owners are those respectively, who holds an estate in the dominant (benefitted) land and servient (affected) lands respectively. They include those who derive title from them.

Restrictive covenants are enforceable against licensees, occupiers and trespassers on the land. The servient owner in the case of a covenant which is restrictive in substance, is deemed to include a licensee or other person in occupation of the land with or without the consent of that owner

A tenant for a period of less than five years is not deemed servient owner.

Limits on Scope

The new rules apply to covenants affecting the land as such. They do not apply to personal covenants. The older rules are abolished to the extent that they relate to the enforceability of freehold covenants.There are some unresolved questions of interpretation as to the scope of the new rules.

The new rules  do not affect  the enforceability of a covenant under the doctrine of privity of contract. Therefore where the covenant is enforceable as a contract, it continues to be enforceable.

The rules do not limit  covenants for title. They are implied covenants given by the seller of property as to ownership and certain other matters.

The rules in the Statute of Limitation as to the point in time at which rights to take action for breach  are lost, continue.

The rules take effect subject to the terms of the covenant or the instrument containing it. Therefore they may be varied by its terms.

Land Covenants Generally Bind

Broadly speaking, he covenants are enforceable during the period when the dominant and servient tenements owners are respectively, owners of the relevant properties. They may take action or be subject to action after they have ceased to be owners in respect of breaches which arose while they were the owner.

A freehold covenant which imposes an obligation in respect of servient land (land affected)  to do or refrain from doing an act is enforceable by the current dominant owner (land benefitted). It is also enforceable where that person who has ceased to be the owner of the bnenfitted land, but only in respect of any breach of covenant occurring during the period when that person was such owner.

A freehold covenant which imposes an obligation in respect of servient land (land affected)  to do or refrain from doing an act is enforceable  against  the servient owner (owner of land affected) for the time being in respect of any breach of covenant by that owner or which occurred before and continued unremedied after that person became the servient owner. They also apply against  a person who has ceased to be the owner, of the land affected but only in respect of a breach of covenant which occurred during the period when that person was such owner.

With the servient land has been sub-divided, covenants positive and negative are to be appropriately apportioned between the subdivided parts.  Where there is a dispute as to apportionment, the matter may be referred to the court for determination and, on such application, the court may order such apportionment as it thinks fit.

Estate Schemes Post 2009

There is provision for schemes of development in which land is divided into two or more parts for conveyance in fee simple to each owner of a part.   Where there is a scheme of development the above provisions  apply so as to render covenants which are capable of reciprocally benefiting and burdening the parts of land within the scheme enforceable by and against the owners for the time being of such parts or persons in the manner specified above.

A scheme of development requires an intention as between the developer and the owners of parts to create reciprocity of covenants. The intention is to be  expressed or implied  in each conveyance to the owner of parts, The covenants and intention are to relate to the parts and  the proximity of the relationship between their owners

Covenants which are capable of reciprocally benefitting and burdening the parts of the land within the scheme are enforceable by and against owners of the time being, in the above manner  The covenants must relate to the lands.

The new rules apply only to cases where the covenant affects both the land of the covenantee and the covenantor. Where the covenant stands alone, the older rules are likely to apply.

Discharge and Variation

Under the  2009 legislation, there is a general mechanism in Ireland for the discharge of covenant.  A broadly similar mechanism has existed in the United Kingdom for many years. An order shall be registered in the Registry of Deeds or Land Registry, as appropriate.

A servient owner may apply to the court for an order discharging in whole or in part or modifying a freehold covenant (whether created before or after the commencement of the 2009 Act) on the ground that continued compliance with it would constitute an unreasonable interference with the use and enjoyment of the servient land.

In determining whether to make an order and, if one is to be made, what terms and conditions should be attached to it, the court shall have regard as appropriate to the following matters—

• the circumstances in which, and the purposes for which, the covenant was originally entered into and the time which has elapsed since then,
• any change in the character of the dominant land and servient land or their neighbourhood,
• the development plan for the area under the Act of 2000,
• planning permissions granted under that Act in respect of land in the vicinity of the dominant land and servient land or refusals to grant such permissions,
• whether the covenant secures any practical benefit to the dominant owner and, if so, the nature and extent of that benefit,
• where the covenant creates an obligation on the servient owner to execute any works or to do any thing, or to pay or contribute towards the cost of executing any works or doing any thing, whether compliance with that obligation has become unduly onerous compared with the benefit derived from such compliance,
• whether the dominant owner has agreed, expressly or impliedly, to the covenant being discharged or varied,
• any representations made by any person interested in the performance of the covenant,
• any other matter which the court considers relevant.

Where the court is satisfied that compliance with an order will result in a quantifiable loss to the dominant owner or other person adversely affected by the order, it may include as a condition in the order a requirement by the servient owner to pay the dominant owner or other person such compensation as the court thinks fit.