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View the related practice notes about Positive covenant

Positive covenants—binding successors in title

A covenant is a form of contract. The doctrine of privity of contract establishes that the rights and liabilities created by a contract bind the parties to it but no-one else. However, in the case of a covenant relating to land, property law principles may allow that covenant to be enforced by and/or against persons other than the original parties. The applicable principles are:•in most cases, the benefit of a restrictive covenant and a positive covenant is enforceable by successors in title by virtue of it 'running with the land' both in common law and in equity•subject to certain requirements, the burden of a restrictive covenant will run with the land in equity only (so as to be enforceable against successors in title), but•the burden of a positive covenant will not run with the land (but see Statutory exceptions below)The fact that the burden of positive covenants does not run with the land is generally regarded as a serious deficiency in English property law. It is not possible to bind...

Conversion of long leasehold to freehold (enlargement)

Practical applicationPreserving positive covenants‘Enlargement’ (conversion) of a long lease into a freehold can be used to preserve positive covenants as, following enlargement, the freehold is subject to the same positive covenants as affected the lease. This is a potential option for a developer who intends to walk away once the final phase is built and sold. The developer could grant enlargeable leases, with the rent for all units dropping to zero after the sale of the final unit. Each unit owner can then unilaterally execute a deed of enlargement, enlarging its lease into a freehold. The result is a freehold scheme in which positive covenants can be enforced.In practice this is rarely done. The method has not been tested in court and the grant of a 999-year lease or an estate rentcharge scheme is a simpler way of achieving the same result and one which is more likely to be understood by lenders. Nonetheless, practitioners should be aware of this option, if only to be able to identify it if...

View the related precedents about Positive covenant

Transfer of part of a registered lease

Transfer of part of a registered lease Precedent transfer This precedent gives suggested wording for Form TP1 in the rare circumstances of a leasehold assignment of part. Assignments of part are unpopular with landlords because the consequent fragmentation of the tenant covenants inevitably makes it harder and costlier for the landlord to collect rent, enforce the covenants and otherwise manage the property. See Practice Note: Assignment of part of the demised premises. Form TP1 must be used where the assignment is of part of a registered lease, or of part of an unregistered lease that has more than seven years left to run. An adaptable Word version of the precedent form TP1 can be downloaded, saved or printed from this link: Apportionments On an assignment of part, the tenant and assignee should agree to apportion: • the rent payable under the lease; • any other amounts payable under the lease (insurance, service charge etc); and • the responsibility for any other covenants that are non-attributable to the various parts...

Report on title—property report for leasehold occupier [Archived]

Report on title—property report for leasehold occupier [Archived] ARCHIVED: This Precedent has been archived and is not maintained. To: The [ directors OR partnership] [Insert the Tenant’s name, address and (if applicable) company registration number] Dear [insert organisation name] [Insert the name and address of the Property] (the Property) 1 Scope of this report and reliance This report has been prepared for your sole benefit in connection with your proposal to enter into a lease of the Property with [insert name and address of Landlord] (the Landlord) with an initial rent of £[insert rent] [plus VAT] per annum. This report is based on the assumption that you will use the Property as a [insert current use] and you do not intend to redevelop [or carry out any alterations to] the Property. This report is based on our review of the Landlord’s [and Head Landlord’s] title, the replies to pre-contract enquiries given by the Landlord and search results. The results of our investigation are set out in...

View the related q&as about Positive covenant

Have remedies under section 121 of the Law of Property Act 1925 been removed in relation to a modern ‘service charge’ type charge payable by owners on an estate (eg a typical newbuild type estate where there might be common areas, etc paid for collectively by way of variable charge, payable by positive covenant). Are these estate rentcharges?

Have remedies under section 121 of the Law of Property Act 1925 been removed in relation to a modern ‘service charge’ type charge payable by owners on an estate (eg a typical newbuild type estate where there might be common areas, etc paid for collectively by way of variable charge, payable by positive covenant). Are these estate rentcharges? The Leasehold and Freehold Reform Act 2024 (LFRA 2024) amended the Law of Property Act 1925 (LPA 1925) and introduced a new concept of a ‘regulated rentcharge’ (LFRA 2024, ss 113(2) and 124(2)(a) and LPA 1925, s 120A(1)). A ‘regulated rentcharge’ is any rentcharge of a type that could not be created under section 2 of the Rentcharges Act 1977 (RcA 1977)—see LPA 1925, s 120A(1) and Practice Note: Rentcharges—apportionment, termination and enforcement (which refers to ‘regulated rentcharges’ as ‘Historic Rentcharges’). On and from 27 November 2023, remedies under LPA 1925, s 121 are no longer available in relation to a ‘regulated rentcharge’ (LPA 1925, s 121(1A) and LFRA 2024, s 113(5))....

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Property weekly highlights—17 April 2025

This week's edition of Property weekly highlights includes: cases on relief from forfeiture granted to residential sub-tenants of a mixed-use building and stamp duty land tax, new versions of the MCL leases, an update from HM Land Registry on its registration service and a Property and Related Services Threat Assessment Report on financial sanctions.