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Positive Covenants

EM Law are experts in advising clients on transfers of land and positive covenants in such transfers. Our lead commercial property lawyer is Razina Akhtar who has extensive experience in advising clients on a wide range of commercial property matters.

Introduction

A positive covenant, generally, imposes an obligation to carry out some positive action in relation to land or requires expenditure of money. In contrast, a restrictive covenant restricts the use and enjoyment of the land.

The burden (the obligation to observe a covenant) does not generally bind successors in title of freehold land where a covenant is positive in nature, but it may do so if the covenant is negative.

Examples of positive covenants include those requiring:

  • Expenditure of money.
  • Works of repair or maintenance.
  • Erection of buildings or boundary fences.
  • Payment of further money on planning consent being obtained.

A covenant to repair or contribute to the cost of repair is a positive covenant and will not run with the land. It will not be enforceable once the original covenantor transfers its interest. However, the original covenantor will remain contractually bound by a positive covenant.

Positive covenants are different to restrictive covenants. For a restrictive covenant to be enforceable against successors in title, there must be land that has the benefit of a restrictive covenant (dominant land), and land that is subject to a restrictive covenant (servient land), as with easements. At the date the covenant is made, the covenantee must own an estate in the dominant land and the covenantor must likewise own an estate in the servient land.

How can you make the burden of positive covenants bind successors in title?

Although the burden of a positive covenant does not run with the land, there are various workarounds which can be adopted to ensure a similar outcome:

  • Chains of indemnity.
  • Compulsory renewed covenants supported with a restriction.
  • Right of entry annexed to an estate rentcharge.
  • Freehold right of re-entry.
  • Use of leasehold title.

Benefit of positive covenants

Under section 78 of the LPA 1925, a covenant is deemed to be made with the covenantee’s successors in title and persons deriving title under them and has effect as if so expressed. “Successors in title” include the owners and occupiers of the land of the covenantee intended to be benefited.

However, to benefit successors in title, the positive covenant must “touch and concern” the land intended to be benefited and not be personal to the transferor.

For any questions you may have concerning positive covenants contact Razina Akhtar.

Positive Covenants EM Law Razina Akhtar

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