Prioritising Landowner Rights and Land Value: A Call to Reduce Easements and Reform Covenants

 -  -  60


Spread the love

Introduction

It will be demonstrated that land law fails to strike the right balance in its attempts to ensure that land is not overburdened. Defining ‘overburdened’ land as that which is hindered by the existence of rights that belong to someone other than the landowner, this writer argues that overburdening the land can inhibit its use and enjoyment, while also reducing its value. It will be contended throughout that land law attempts to simultaneously ensure that land is not overburdened, protect landowners’ rights, and safeguard the value of the land. Beginning with an examination of the laws governing easements, it will be demonstrated that the law is currently failing to strike the right balance, but that this can be achieved through a stricter application of the existing laws and principles. By analysing the law of freehold covenants, it will then be shown that more substantial reform is required to strike this balance. This writer supports the Law Commission’s proposed changes to the law of freehold covenants, which strike the right balance by prioritising the protection of landowners over minimising the burden on land.

Easements

Easements are rights to enjoy a limited use over another’s land and are created where the Re Ellenborough Park criteria are satisfied.[1] Land over which easements are granted is servient, and land benefitting from easements is dominant.[2] Land law seeks to strike the right balance between safeguarding the land from being overburdened, protecting the rights of owners, and ensuring that the value of land is maintained. By examining the ‘ouster principle’ and the law governing implied easements, it will be demonstrated that land law is capable of striking the right balance, but courts must change their approach to achieve this.

The ‘ouster principle’ is a mechanism that seeks to ensure that land is not overburdened by prohibiting the creation of easements where they would prevent servient owners from enjoying ‘the ordinary uses of property’.[3] Since Batchelor v Marlow, this has applied where servient owners are prevented from making ‘reasonable use’ of their land.[4] An alternative ‘possession and control’ test has been employed in Scotland, where the ability to decorate is considered evidence of the servient owner’s control.[5] This test is less rigid, and its logic has been utilised in cases such as Virdi v Chana to allow parking easements where a strict application of the ‘reasonable use and degree’ test would not.[6] There is substantial academic support for this approach, with Xu suggesting that this reflects the ‘social demand’ for parking,[7] and Hill-Smith arguing that reluctance to create parking easements is ‘inimical to the sensible development of the law’.[8] This writer disagrees, arguing that land law is failing to strike the right balance because parking easements are burdensome upon the land and prevent servient owners from exploiting the land’s commercial value by charging others to park. The Law Commission, recognising the need for parking, has recommended reducing the scope of the ‘ouster principle’, arguing that easements should not be prevented even where the right to use another’s land ‘prevents that other from making any reasonable use of it’.[9] This would allow the creation of a larger number of parking easements, which would undoubtedly make productive use of the land, but would also fail to protect the interests of servient owners. This writer challenges this proposal, arguing that land law would strike a better balance by allowing parking rights to be created not as easements, but as licences. As licences are personal rights, this would reduce the burden on the land and strike a better balance between our need for parking and what Gray and Gray recognise as our ‘social interest’ in commercially exploiting the land.[10] It is therefore clear that parking easements must be replaced with licences in order to strike the right balance.

Through the law of implied easements, land law seeks to strike the right balance between ensuring that land is not overburdened and protecting the interests of landowners. By narrowly construing the concept of ‘necessity’, the court has traditionally ensured that easements are not created needlessly,[11] and in doing so has struck this balance. In the recent Sweet v Sommer case, however, the court took a more relaxed approach when implying an easement of ‘necessity’.[12] In this case an easement was granted to allow vehicular access to property that was already accessible on foot, which may be construed as an indication that land law is adapting to balance our society’s changing needs. This writer disagrees, arguing that an expansion of this concept and the relaxation of the law would lead to easements being created too easily, which would provide less protection for servient owners and add to the burden on land. While it remains to be seen whether this expanded test will be applied in the future, this writer urges courts to use caution and apply the law strictly, as the approach in Sweet v Sommer[13] failed to strike this balance. The Law Commission has suggested that ‘necessity’, ‘common intention’ and ‘the rule in Wheeldon v Burrows’ should be replaced with a single test.[14] This writer recognises that this would reduce inconsistency and make the law easier to navigate, but holds that this recommendation should not be brought into effect because it would automatically imply an easement. This would provide insufficient protection to servient owners and could lead to the creation of more easements, which would overburden the land, thereby decreasing its value and the ability of servient owners to utilise and enjoy it. This writer argues that land law should enforce the existing rules surrounding ‘necessity’ stringently in order to sufficiently balance the rights of landowners and ensure that land is not overburdened.

While land law has largely struck the right balance in its creation of implied easements, it is clear that this is not the case in relation to s 62 of the Law of Property Act 1925.[15] This section enables any pre-existing easements benefiting the land to pass automatically in a conveyance,[16] and has, in some cases, been interpreted as elevating lesser rights into easements.[17] This interpretation is highly controversial, with Tee describing s 62 as having ‘metamorphic powers’ that are ‘unjust in practice’,[18] and Douglas arguing that it naturally has an uplifting effect.[19] Douglas contends that words must be removed from s 62 to remove this ability,[20] which is echoed by the Law Commission’s recommendation that the power of s 62 ‘to transform precarious benefits into legal easements’ should be removed.[21] This writer, however, supports Tee’s interpretation, holding that s 62 does not explicitly give the power to convert lesser rights into easements. This writer holds that land law has not struck the right balance by interpreting the wording in this way, as it has failed to protect the rights of servient owners. This writer suggests that courts must regard s 62 more narrowly in order to strike the right balance, as upgrading personal rights to rights in rem will lead to land becoming overburdened and the intentions of the parties being disregarded.

It is evident that land law is failing to strike the right balance between protecting the land from being overburdened, defending the rights of landowners, and preserving the value of the land. By granting parking easements, the court is catering to society’s need for parking, but neglecting to safeguard the land from being overburdened and consequently losing value. This writer has demonstrated that the right balance can only be struck by replacing parking easements with licences, which are less burdensome on the land and the servient owner. From an examination of the law of implied easements, it is clear that the right balance can be struck; however, it is evident that this can only be achieved by interpreting these laws narrowly, as their generous interpretation can result in the overburdening of land and insufficient protection of servient owners.

Freehold Covenants

Freehold covenants (“covenants”) are promises between freehold owners of land contained in a deed. The owner who enjoys the benefit is the covenantee, and the covenantor shoulders the burden. Positive covenants impose a duty to do something, while restrictive covenants bind the covenantor ‘to use or not to use the land in a particular way’.[22] Land law attempts to ensure that land is not overburdened by covenants through the Austerberry principle, which prevents the burden of covenants from running with the land.[23] While academics such as O’Connor argue that the refusal to allow positive covenants is ‘based on sound policy’,[24] this writer argues that the existence of methods to circumvent positive covenants  demonstrates that the Austerberry principle fails in practice to strike the right balance. By examining the effect of equity and the ‘doctrine of benefit and burden’,[25] it will be demonstrated that substantial reforms must be implemented to achieve this balance.

Land law does not strike the right balance when ensuring that land is not overburdened because equity enables covenantees to circumvent the law and create covenants that are binding on purchasers and subject to remedies when breached. By enabling burdens over land to be passed, equity prevents the ‘Austerberry principle’ from ensuring that land is not overburdened. This principle also fails to protect landowners, as covenantees are forced to use this expensive method to protect their interests. Recognising this, Rudden suggests that owners use costly devices to create proprietary interests because the law prevents this from happening ‘simply and cheaply’.[26] This writer agrees with Rudden, suggesting that reform to the law could better protect landowners by making the enforcement of covenants more straightforward. This writer also argues that, in its attempt to protect the land from becoming overburdened, the law has failed to acknowledge the demand for restrictive covenants to pass, and in doing so has not struck the right balance. The Law Commission, acknowledging this demand for restrictive covenants, has recommended that promises ‘not to do something on the covenantor’s land’ should take effect as land obligations.[27] This writer supports this, arguing that the automatic binding of successors will ensure that covenantees’ interests in land are fairly and completely protected, while the registration of these rights will provide transparency for potential purchasers. This writer also suggests that courts should be given greater discretion to determine which covenants are passed at law, as this would protect covenantors from unfair bargains and would act as a safeguard to prevent the land from becoming overburdened. Only by doing so can land law strike the right balance in relation to restrictive covenants.

By enabling positive covenants to run with the land, the ‘doctrine of benefit and burden’ limits the effectiveness of the ‘Austerberry principle’, inhibiting the law’s ability to ensure that land is not overburdened. Under this doctrine, successors who wish to take advantage of the benefits of a covenant must also be subjected to any reciprocal burdens,[28] with recent case law indicating that its requirements are being relaxed.[29] Academic opinion varies regarding this doctrine, with Bevan asserting that it is ‘deeply and fatally flawed’,[30] while Aughterson suggests that its existence ‘removes the need for complex and inefficient mechanisms devised to circumvent’ the common law.[31] This writer argues that this doctrine has developed imperfectly to compensate for land law’s deficiencies, and should not be relied upon when reform is possible. Reform is also suggested by Bevan, who argues that, in some circumstances, there should be a direct means to enforce positive covenants.[32] This is reflected in the recommendations of the Law Commission, who propose that promises ‘to do something on one’s own land or on a boundary structure’ and promises ‘to make a reciprocal payment’ should be enforceable and registrable.[33] This writer supports this proposal, which would ensure that potential purchasers are informed of obligations before purchasing the land, providing them with greater protection. This reform may also protect covenantees, who could more easily share with their neighbours the burden of maintaining boundaries or shared spaces. Additionally, this writer suggests that reform should impose greater discretion on the courts, as this could prevent unfair covenants from passing and ensure that the rights of all landowners are protected. Some academics oppose such reform, with Walsh and Morris arguing that making positive covenants more enforceable would create more work for conveyancers and increase the cost for parties in transactions.[34] This writer challenges this assertion, arguing that the Law Commission’s proposition will not lead to an increase in the burden on the land because the existing laws are already being circumvented in order to create covenants. This writer supports academics such as Bevan[35] and Cash,[36] both of whom look beyond the immediate economic impact of these reforms and recognise that registration protects the value of land. This writer maintains that implementing the recommendations of the Law Commission regarding positive covenants will ensure that land law strikes a better balance than what is currently being achieved.

It is clear from the existence of methods that circumvent the Austerberry principle that land law is not currently striking the right balance between its conflicting responsibilities. This balance can only be achieved by introducing substantial reforms, including allowing restrictive covenants to pass at law and permitting positive covenants to be directly enforced. he courts should be given wider discretion to decide when a covenant should pass, arguing that this would provide greater protection from unfair bargains to successors of covenantors. This writer is largely supportive of the recommendations of the Law Commission, who appear to prioritise the protection of landowners and their intentions. This writer argues that ensuring that land is not overburdened is an important responsibility of land law, but this should not be over-emphasised at the expense of protecting landowners.

Conclusion

Through various principles and restrictions, the law seeks to ensure that land is not overburdened, that land does not lose its value and that landowners are protected. It has been proven that, despite its best efforts, the right balance is not currently being achieved by land law, which has adopted a lenient approach to the law of easements, and a strict attitude towards covenants. It has been established that the ouster principle and the rules governing implied easements must be more stringently applied in order to minimise the number of easements created and strike the right balance. It has also been demonstrated that substantial reforms must be introduced in relation to covenants, as the current law is not meeting the social demand for these to be passed with the land. While this writer maintains that social demand for reform exists, it is clear that this is not a priority among voters or politicians, and as a result this writer reluctantly agrees with Tee that land law reforms are unlikely to come to fruition in the current political climate.[37] This writer argues that land law reforms must be demanded, as without substantial reforms to the law of covenants, land law will not be capable of striking the right balance. Though land law must ensure that the land is not overburdened, it is also crucial that it prioritises protecting landowners’ rights and the value of the land.


[1] [1956] Ch 131.

[2] London and Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1994] 1 WLR 31.

[3] Dyce v Hay [1852] 1 WLUK 2.

[4] Batchelor v Marlow and another [2001] EWCA Civ 1051 at [768] per Tuckey LJ.

[5] Moncrieff v Jamieson [2007] UKHL 42.

[6] [2008] EWHC 2901 (Ch).

[7] Lu Xu, ‘Easement of car parking: the ouster principle is out but problems may aggravate’ [2012] Conv 4, 291, 303.

[8] Alexander Hill-Smith, ‘Rights of parking and the ouster principle after Batchelor v Marlow’ [2007]. Conv 223, 234.

[9] Law Commission, Making Land Work: Easements, Covenants and Profits à Prendre (Law Com No 327, 2011) para 3.209.

[10] Kevin Gray and Susan Francis Gray, Elements of Land Law (OUP, 5th edn, 2009), 595.

[11] Union Lighterage Co v London Graving Dock Co [1902] 2 Ch 557 at [573] per Stirling LJ. 

[12]  [2005] EWCA Civ 227.

[13] ibid.

[14] (n 9) para 3.32.

[15] Law of Property Act 1925, s 62.

[16] Graham v Philcox [1984] QB 747. 

[17] Wright v Macadam [1949] 2 KB 744

[18] Louise Tee, ‘Metamorphoses and section 62 of the Law of Property Act 1925’ [1998] Conv 115, 124.

[19] Simon Douglas, ‘How to reform section 62 of the Law of Property Act 1925’ [2015] Conv 1, 13, 22.

[20] ibid 24.

[21] (n 9) para 3.64.

[22] Haywood v The Brunswick Permanent Benefit Building Society [1881] 8 QBD 403.

[23] Austerberry v Oldham Corporation [1885] 29 Ch D 750.

[24] Pamela O’Connor, ‘Careful what you wish for: positive freehold covenants’ [2011] Conv 3, 191, 205.

[25] Chris Bevan, ‘The doctrine of benefit and burden: reforming the law of covenants and the numerus clausus “problem”’ [2018] CLJ 77(1) 72, 72.

[26] Bernard Rudden, ‘Economic Theory v Property Law: The Numerus Clausus Problem’ in John Eekelaar and John Bell (eds), Oxford Essays in Jurisprudence (Clarendon Press 1987) 260.

[27] Law Commission, Making Land Work: Easements, Covenants and Profits à Prendre (Law Com No 327, 2011)  para 6.38.

[28] Halsall v Brizell [1957] Ch 169.

[29] Wilkinson v Kerdene Ltd [2013] EWCA Civ 44.

[30] (n 25) 89.

[31] Edumund Paul Aughterson, ‘In Defence of the Benefit and Burden Principle’ [1991] ALJ 65, 319.

[32] (n 25) 89.

[33] (n 27) para 6.38.

[34] Emily Walsh and Cliff Morris, ‘Enforcing positive covenants: a practical perspective’ [2015] Conv 4, 316, 318.

[35] (n 25) 89.

[36] Andrew Cash, ‘Freehold covenants and the potential flaws in the Law Commission’s 2011 reform proposals’ [2017] Conv 3, 212, 212.

[37] (n18) 124.

60 recommended
comments icon 0 comments
0 notes
523 views
bookmark icon

Write a comment...

Your email address will not be published. Required fields are marked *