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restrictive covenant

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An obligation created by deed that curtails the rights of an owner of land; for example, a covenant not to use the land for the purposes of any business. A covenant imposing a positive obligation on the landowner (the covenantor), for example to repair fences, is not a restrictive covenant. Third parties who acquire freehold land affected by a restrictive covenant will be bound by it if it is registered (see registration of encumbrances) or, in the case of covenants created before 1926, if they are aware or ought to be aware of it (see constructive notice) (Tulk v Moxhay (1842) 2 Ph 774). The covenant may also be enforceable by successors of the original beneficiary (the covenantee) if it was annexed to (i.e. expressly taken for the benefit of) the covenantee's land or if the benefit of it was expressly assigned. Section 78(1) of the Law of Property Act 1925 has been interpreted as providing a form of statutory annexation (Federated Homes v Mill Lodge Properties [1980] 1 WLR 594 (CA). Thus, unless there is an express stipulation to the contrary, all covenants shall be deemed binding on successors to the original covenantee. The benefit of a covenant will not be annexed, however, if the covenantee's land is not actually capable of benefiting from the covenant; for example, if it is too far away to be affected. Restrictive covenants contained in leases are not registrable but are nevertheless generally enforceable between third parties (see covenant running with the land). See also building scheme.

Subjects: Law

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