Restrictive Covenants & Positive Covenants

One of the first things anyone who buys a property has to come to grips with is the nature of covenants governing his or her land. A covenant is a legal obligation to perform or not to perform certain acts with respect to property. If the obligation restricts the use and enjoyment of the land it is called restrictive covenant. Examples of restrictive covenants are not to use the property other than for residential purposes or not to build any structures on the property.  In contrast, an obligation which requires expenditure of money or maintaining a fence or any structures on the property is called a positive covenant.

Restrictive covenants usually run with the land which means they bind anyone who becomes the legal owner. So for example if the land is subject to a restrictive covenant of “not to build a structure on the property”, then anyone who buys the property must comply with this restriction. However, there is one caveat. For a restrictive covenant to be enforceable against the legal owner of a land, there must always be two lands with one land having the benefit and the other land having the burden of the restrictive covenant. A Deed of Covenant records not only the exact nature of the restrictive covenant but also identifies – either by description or by reference to a plan — the land which has the benefit and the land which has the burden of the restrictive covenant.

Positive covenants, by contrast, differ from the restrictive covenants in two respects. Firstly, they do not run with the land which means unless there is a chain of indemnity or a renewed covenant between the parties, the burden of the positive covenant (such as repairing a fence) does not pass on to the new owner. That is why it is important for a seller who is bound by positive covenants of their land to insist their buyer to enter into a direct Deed of Covenant thereby making the buyer to perform the positive obligations in relation to the land.

The other respect in which positive covenants are different is that they may be legally enforceable even though the person who has the burden of the covenant owns no land. The common law only requires that the person who has the benefit of the positive covenant must hold a land to which the benefit can be applied. This was first established in The Prior’s Case in 1368. In that case, the person who had the benefit of the positive covenant was able to enforce a positive covenant against the person who had the burden of the positive covenant to sing divine service in its chapel even though the latter held no land that could be burdened by the obligation (The Prior’s Case (1368) YB 42 Edw III).

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