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Covenants and Easements

Covenants and easements are important parts of a property and influences the use of the property, by the owner or another person. Identifying and understanding any of the covenants and easements which may apply over a property is vital as they can affect the available uses for the property and the development of the land.

I. Covenants

A covenant is an obligation which affects a landowner and is registered on the title of the land.
A covenant can be positive, which imposes upon the owner of the land that why must conduct or allow the conduction of certain activities, or negative, which imposes that the owner of the land is not able to do certain things with or on the land.

Generally, a covenant or covenants will be placed with the aim to maintain the aesthetics and quality of housing development to create a certain standard for construction.

a. Set minimum or maximum sizes for the construction of a dwelling

This may be upon the square metres of floor space as well as the number of levels which the dwelling is allowed to be.

b. Require certain energy rating standards

This may be set out upon the land as a whole or require a minimum level for each appliance which is installed or used upon the land.

c. Require or restrict which materials may be used in construction

This may be to ensure suitable building standards are met for the dwelling to combat the unique threats posed by the location of the land.

d. Require or restrict which external materials may be used

This is generally to ensure that the development on each land is in the spirit of the developments surrounding it. May require a certain type or colour of fence to be used or limit the colours and materials which may be used upon the exterior of the dwelling.

d. To regulate the location of ancillary structures

This may exclude or set certain points for installation for ancillary structures such as water tanks and clothes lines.

A covenant upon land can normally be located in the land’s certificate of title or within a sperate document referenced within the title. It may also be found within the contract of sale for the land.

(RELATED: Conveyancing legal advice and services)

Creation of a covenant

Old System title

While not always required to be created via a deed, writing may be necessary when the there has not been the sufficient acts of part performance.

Torrens Title

When a covenant is created outside the transfer of the land it is generally required that the covenant is created by a written agreement. This will usually be in the form of a deed and then to request that the Registrar-General notes the effect of the deed in the folio of the burdened land.

A covenant may also be created via the incorporation of it into the approved form of transfer when the land is being transferred.

s88B Conveyancing Act 1919

This section states that a covenant may be created through when a plan of land is lodged with the Registrar-General for registration and recording the plan must state any restrictions which will be imposed upon the uses which intend to benefit or burden the land of the plan. Upon the registration of the land, any of the stated covenants are created and annexed to the land which is benefited by them.

Available remedies for the breach of a covenant

Injunction

To succeed in obtaining an injunction regarding a threatened breach of a covenant the owner must prove that the breach will cause ‘imminent and substantial damage

To succeed in obtaining an injunction regarding a breach of a covenant which already exists the owner, while these are normally granted, the courts have rejected them on certain grounds, including:

  • Laches and delay
  • Hardship
  • Acquiescence in the breach
  • The lack of utility in making the order

Damages

Original covenantee

When damages are sought against the original covenantee they may be sought at common law.

Successor of the original covenantee

When damages are sought against the successor of the original covenantee they must be sought in equity. These damages may be sought in conjunction with an injunction.

When the land has diminished in value to the breach of threatened breach, the damages will generally be the loss of value of the land.

When there has not been any diminishment of value in the land the damages may be the amount which the plaintiff would have reasonable have required the defendant to pay for the right to release the covenant to allow the act to be legally done.

Removing covenants

Covenants may be removed (extinguished) from land through:

a. Common ownership

A restrictive covenant are generally extinguished if the land which is benefit and the land which is burdened fall into common ownership.

b. Purchase of legal estate in burdened land (old system land)

When a bona fide purchaser of a legal interest in the burdened land, having taken the value and without notice of the existence of the covenant, is not bound by the covenant.

c. Express release

The covenant may be released expressly by the owner of the land benefited by the covenant.

d. Implied release

A covenant may be released impliedly when:

  • the benefited lands owner has submitted to a long course of usage which is wholly inconsistent with the continued existence of the covenant
  • the character of the neighborhood has changed to the extent that the covenant does not hold any more value.
  • the owner of the benefited land has disregarded breaches to such an extent that the reasonable person would believe that future breaches will be ignored. Implied release may not be found when there is mere inactivity in the face of a breach.

As restrictive covenants are sought after in equity, they are based upon equitable foundations, which may change and differ with the land the covenant is upon.

II. Easements

An easement is a right which allows the owner of one piece of land to carry out a certain limited activity upon another piece of land. This right may allow the land to be used in certain way or prevent the land from being utilized in a particular manner. The right is registered as an interest on the title of the land which the right applies to.

a. Positive easements

A positive easement grants the right to enter another person’s land to allow something to be done on that land.

  • Rights of way
  • Rights to discharge water
  • Rights to occupy a pew in a church
  • Rights to use a kitchen to another’s land to wash and dry clothes
  • Rights to use a toilet on another’s land

b. Negative easements

A negative covenant grants rights to prevent something from being done on the land. While these don’t expressly confer a right of entry, they may imply a right of entry when it is reasonably necessary.

  • Right to the flow of air through defined apertures
  • Right to receive light for a building
  • Right to the support of a building
  • Right to receive water through pipes

Essential Characteristics of an easement

There are four essential requirements of an easement, as endorsed by the English Court of Appeal in Re Ellenborough Park:

There must be a dominant and servient tenement

An easement is created for the benefit of other land, the dominant tenement, by being placed over the land, the servient tenement. A right must be annexed to other land to be seen as an easement so that it ‘runs with the land’, otherwise it may be seen as a mere personal right.

The easement must accommodate the dominant tenement

An easement must benefit the dominant tenement and connect to the enjoyment of the dominant tenement. It is key that the right grants a privilege to the land which is seen as reasonably necessary for the better enjoyment

The same person must not own and occupy the dominant and servient tenements

A person can not have an easement over their own land. However, in New South Wales under s88B of the Conveyancing Act 1919 (NSW), the registration or recording of a plan of land, indicating an easement intended to be created, creates the easement even though the land benefitted and the land burdened are in the same ownership. This applies to both land under old system title and Torrens title.

The right claimed as an easement must be capable of forming the subject matter of a grant

As easements were traditionally created via deed of grant, the grantor must be able in law to grant the easement and the grantee be able to receive the easement and that the right must be the kind which is capable of being granted by deed.

Creation of easements

Creation by express grant

Easement over old system title land should be granted by deed, however may be enforced as an easement in equity.

Easements over Torrens title land requires the execution of an approved form of transfer and the particulars of the dealing must be recorded.

Easements should be registered as a plan under s88B of Conveyancing Act 1919 (NSW)

Creation by express reservation

An owner may grant away part of their land by reserving an easement in the favour of the part being retained over the part being granted away. Requires that the grantor transfers the unencumbered fee simple to the other person and the other person grants an easement to the grantor.

Creation by general words in conveyance or transfer

s67 of the Conveyancing Act 1919 (NSW) allows easements to be created over old system title land by the general words implied into conveyances.

Creation by statute

Easements created in favour of public authorities and other similar persons can be provided for by statutes.

Creation by implied grant or reservation

When no easement is expressly granted or reserved, the law may imply the granting or reservation of an easement. This may be through the implied terms of the conveyance or ease of land, the property being described as abutting or adjoining a road or lane implying a way over that road or lane, when the implication is required as part of the common intention of the grantor and grantee regarding how the grantee will make use of the land and necessity.

Creation by prescription

Easements may also be created through prescription, that being the continued use for at least 20 years, being based that the long term continued use of an apparent right presumes the actual right. The use must have been sufficient frequent that a reasonable person would deem an enduring right is being asserted.

Creation by acquiescence or estoppel

An easement may be created by acquiescence or estoppel as remedy when a landowner is deceitful and causes another landowner, due to the deceitfulness, a detriment.

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