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Summary: "So, there's the rub"

Contract Conditional 1. The contract was subject to two conditions: it was conditional, first, on the obtaining of planning permission and, secondly, on the release of restrictive covenants.

Planning Permission

2. (2.a.) This Agreement is conditional upon the Purchaser obtaining planning permission.

Agreement of the Covenants

3. (12.i.) This Agreement is further conditional upon the release by the Liverpool Victoria..... of the covenants and conditions restricting the development of the property and contained in the conveyance the consideration for such release not to exceed £5,000. In the event of the Liverpool Victoria or other such party as aforesaid requiring a sum in excess of £5,000 (inclusive of costs) for the release of the said covenants and conditions then upon receipt by the Vendors Solicitors of such written notification from the Liverpool Victoria or other such part as aforesaid then this Agreement shall be null and void whereupon the Vendors Solicitors shall forthwith refund to the Purchaser the said deposit of £7,000 with interest as aforesaid.

Purchaser Obtained the Planning Permission

Pursuant to the provisions as to planning permission, the purchaser applied for and eventually obtained on appeal a grant of planning permission on 17th October 1985, which was communicated to him on 21st October 1985. As a result of the contractual provisions, the contractual date of completion became a date 56 days thereafter, namely, 16th December 1985. The progress of the transaction there after was extraordinarily lethargic. The only event of importance is that on 5th November 1986, or thereabouts, the vendors learned that terms for the release of the restrictive covenants had been agreed between the purchaser and those entitled to such covenants. At no stage was a formal release of the covenant given................................

As a preliminary, I seek to get out of the way the provision in Special Condition 12.i. relating to the removal of the covenants and conditions on the property. Looking at the matter in the abstract, one might have thought it was for the vendors to negotiate the removal of those covenants from the title. But it is clear that they were not so treated and that all negotiations relating to those covenants and the price to be paid for them were conducted by the purchaser.

When the vendors purported to rescind the agreement, "the purchaser’s solicitors objected to the validity of the notice to complete on the grounds “that the conditions of the contract have not been fully complied with in that although we have agreement from the rent charge owners that the covenants referred to in Special Condition (i) of the contract will be released upon payment of the consideration and costs, this is purely an agreement and we do not yet have a formal release of the same.”...............................

Master Munrow reached the contrary view. He held that as there was an agreement to release, that was a good as a formal release. If the Master we're right on that point, then, as a defence to this claim, it becomes irrelevant since the condition had been satisfied. If he is wrong, as in my judgement he was, the failure to satisfy the condition by the date at which the notice to complete expired at the latest rendered the contract void in any event.

The following is an AI Overview and Legal Advice should always be sought.

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Restrictive Covenants

Restrictive covenants, which limit how land can be used, typically "run with the land," meaning they bind not just the original parties to the agreement but also any subsequent owners of the property. This means that even if the property is sold, the restrictions imposed by the covenant remain in effect.

Here's a more detailed explanation:

What are Restrictive Covenants? Restrictive covenants are agreements made between landowners that restrict the use of one piece of land for the benefit of another. They are often found in property deeds and can cover a wide range of restrictions, such as limiting building heights, prohibiting certain types of businesses, or maintaining the aesthetic appearance of a property or development.

Running with the Land: When a restrictive covenant runs with the land, it means that it's not just a personal agreement between the original parties. It becomes attached to the land itself and transfers with the property when it's sold.

Enforcement: Restrictive covenants can be enforced by the beneficiary of the covenant (the landowner who benefits from the restriction). If a new owner violates the covenant, the beneficiary can seek legal action to enforce the restriction, potentially through an injunction or damages.

Examples: A common example is a covenant that restricts building on a property to a certain height. This restriction would apply to any subsequent owner of that property. Another example is a covenant preventing a property from being used for commercial purposes, which would also bind future owners.

Importance: Restrictive covenants are important because they can protect property values and maintain the character of a neighborhood or development. However, they can also be a source of contention, especially if they are outdated or overly restrictive.

Considerations for Buyers: When buying a property, it's crucial to be aware of any restrictive covenants affecting the land. These covenants can impact your plans for the property, and it's wise to understand their implications before finalizing the purchase.

Seeking Legal Advice: If you have questions about restrictive covenants or need help understanding their impact on a property, it's always best to seek legal advice from a solicitor specializing in property law.

Covenant

In a covenant, the covenantor is the person or party who makes the promise, while the covenantee is the person or party to whom the promise is made. Essentially, the covenantor is the one with the burden of the covenant, and the covenantee is the one who benefits from it.

What is the process for a purchasing solicitor to check the title.

The process for a purchasing solicitor to check the title of a property is a crucial part of the conveyancing process, ensuring that the buyer gets what they are paying for and that there are no legal surprises. This process is often referred to as "investigation of title" or "title checks."

Here is a general outline of the steps a purchasing solicitor takes:

1. Receiving the Draft Contract and Title Documents

Once a sale is agreed upon, the seller's solicitor sends a draft contract and a "contract package" to the buyer's solicitor.
This package includes evidence of the seller's title to the property. This evidence will be in the form of official copies of the title register and title plan from the Land Registry (for registered land) or a collection of old deeds (for unregistered land).

2. Reviewing the Title Documents

The purchasing solicitor will meticulously review the documents provided by the seller's solicitor. They are looking for anything that could negatively impact the buyer's interests, future ability to sell or mortgage the property, or its value.

Key things they look for include:

Verifying Ownership:

They confirm that the seller is the legal owner of the property and therefore has the right to sell it. In some cases, the property may be in the name of a third party, such as an executor or attorney, and the solicitor will need to see appropriate evidence of their right to sell.

Property Description:

They check that the description of the land in the title documents matches the description in the contract.
Type of Ownership: They confirm whether the property is freehold or leasehold and that this matches the buyer's understanding.

Rights and Restrictions (Covenants and Easements):

They identify any rights that the property benefits from (e.g., a right of way over a neighbor's land) and any rights that the property is subject to (e.g., a right of way across the garden for a neighbor). They also check for any covenants, which are legal promises that may restrict how the property can be used. For example, a covenant might prevent a homeowner from building an extension or running a business from the property.

Financial Charges:

They check for any third-party interests, such as mortgages or other financial charges, and ensure that these will be discharged upon completion of the sale.

Boundaries and Plans:

They compare the title plan with the physical property to ensure the boundaries are correctly defined and that there are no discrepancies.

Class of Title:

They look at the class of title (e.g., "absolute" which is the best, or "possessory" which may require further action to prove).

3. Raising Enquiries

If the solicitor finds anything unclear, inconsistent, or a potential issue during the title check, they will raise "pre-contract enquiries" with the seller's solicitor.

The seller's solicitor must provide clear and satisfactory answers to these enquiries before the buyer can proceed.

4. Conducting Searches

In parallel with the title check, the purchasing solicitor will conduct various searches with local authorities and other bodies. While not strictly part of the "title check," the results of these searches are vital to building a complete picture of the property's legal status. Common searches include:
Local Authority Search:

This reveals information about planning permissions, building regulations, and proposed road schemes.
Water and Drainage Search:

This confirms the property's connection to mains water and sewage.

Environmental Search:

This checks for issues like contaminated land, landfill sites, or flood risk.

Land Registry Searches:

This is a final search to ensure no changes have been made to the title since the initial documents were obtained.

5. Reporting to the Client

Once the solicitor is satisfied with the title and the search results, they will prepare a comprehensive "Report on Title" for the buyer.
This report summarizes all the findings, including any issues or adverse matters, and explains them in a clear, accessible way. The solicitor will advise the buyer on any risks and recommend any further action.

The buyer must read this report carefully and ask any questions before they proceed to exchange contracts.

6. Certifying the Title

If the buyer is using a mortgage, the purchasing solicitor is also acting for the lender.
When the solicitor is satisfied that all queries have been resolved and the title is "good and marketable," they will submit a "Certificate of Title" to the lender. This document certifies that there are no known issues that need to be reported to the lender.

By following this detailed process, the purchasing solicitor ensures that the buyer is fully informed about the property's legal status and that their investment is protected.

Who is bound by restrictive covenants on land

The landowner and any subsequent owners or occupiers are bound by restrictive covenants, as these obligations "run with the land" and are not tied to a specific person but to the property itself. Anyone who purchases land with a restrictive covenant attached to its title is legally bound by it, regardless of whether they were aware of it at the time of purchase.

Who is bound:

Current owner:
The owner of the land that has the restrictive covenant placed upon it.

Future owners:
Every successive owner of the land who buys it after the covenant was established.

Why they are bound:

"Run with the land":
Restrictive covenants are a type of legal agreement within a property's title deeds that restrict how the land can be used.

Not personal:
Unlike personal agreements, they are not binding only on the people who originally agreed to them but are attached to the land itself.

Constructive notice:
New owners are bound by these covenants even if they were not personally aware of them, as they are a matter of public record within the property's title.

Examples of covenants:
Restrictions on building certain types of structures.
Rules preventing the use of land for commercial activities.
Limitations on displaying items, such as washing, in public view.

Deed of Release

A deed of release of a restrictive covenant is a legal document used to formally remove or modify restrictions on land use, often when a property owner wants to develop or use land in a way that was previously prohibited. This deed is registered with HM Land Registry to update the property's title.

Here's a more detailed explanation:

What are Restrictive Covenants?
Restrictive covenants are agreements that limit how a property can be used. They are often found in older deeds and can restrict building, renovations, or even the type of business that can be conducted on the property.

Why a Deed of Release?

Changing Circumstances:
A restrictive covenant might become outdated or impractical due to changes in the neighborhood or the property itself.

Development Plans:
A property owner might want to develop their land in a way that is restricted by a covenant, such as building a new structure.

Negotiated Release:
The owner of the land with the benefit of the covenant might agree to release the restriction in exchange for a payment or other consideration.

How to Obtain a Deed of Release:

1. Identify the Parties:
Determine who benefits from the restrictive covenant, as they must agree to the release.

2. Negotiation:
Negotiate with the benefiting party to agree on the terms of the release, including any payment or other considerations.

3. Draft the Deed:
A deed of release is a formal legal document that must be drafted by a legal professional, such as a solicitor, to ensure it is legally sound and covers all necessary details.

4. Registration:
The completed and signed deed of release must be registered with HM Land Registry.

Registration with HM Land Registry:
Cancellation of Notice:
If the restrictive covenant was previously protected by a notice on the Land Register, that notice will be cancelled upon registration of the deed of release.

Important Considerations:

Legal Advice:
It's highly recommended to seek legal advice from a solicitor when dealing with restrictive covenants, as they can be complex.

Cost:
Releasing a restrictive covenant can involve costs, including legal fees for drafting the deed and potentially a payment to the benefiting party.

Mortgages:
If the land benefiting from the covenant is subject to a mortgage, the lender will need to be involved in the release process.

Create Deed of Release

To create a deed of release for a restrictive covenant, here’s a clear breakdown of the process and key considerations:
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📝 What Is a Deed of Release?

A Deed of Release of Restrictive Covenant is a legal document that formally removes or relaxes a restriction placed on a property—such as prohibiting building, commercial use, or certain alterations. It must be agreed upon by both the dominant landowner (who benefits from the covenant) and the servient landowner (whose land is burdened by it) A.
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🛠️ Steps to Create and Register the Deed

1. Identify the Benefiting Party

• Confirm who currently owns the land that benefits from the covenant. This is crucial, as only they can agree to release it B.

2. Draft the Deed

• The deed should:
• Clearly describe the covenant being released.
• Identify both parties (dominant and servient owners).
• Include signatures from both parties.
• Be executed as a deed (i.e., signed, witnessed, and dated properly).
• While DIY templates exist, it’s strongly recommended to use a solicitor or conveyancer to ensure legal validity B.

3. Submit to HM Land Registry
• Once signed, submit the deed to HM Land Registry to update the title.
• The fee for this is typically £40 if submitted by post.
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⚖️ Alternative: Tribunal Application If the benefiting party refuses to release the covenant, you can apply to the Upper Tribunal (Lands Chamber) under Section 84 of the Law of Property Act 1925 to discharge or modify it. This route is more complex and costly but may be necessary if agreement can’t be reached.
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✅ Tips for Success
• Legal Advice: Always seek professional guidance before proceeding.
• Clarity: Ensure the deed is specific about what is being released.
• Title Update: Register the deed promptly to avoid future disputes.

Deeds of Release 1980s

Yes, deeds of release were indeed used in the UK during the 1980s regarding restrictive covenants. They provided a mechanism to formally extinguish or modify such covenants burdening a property's title.

Here's why and how they were relevant:

Release of Burdens:
Restrictive covenants, which restrict the use of land, could be released through a deed of release, allowing for alterations or uses previously prohibited.

Negotiated Settlements:
Often, the parties with the benefit of the restrictive covenant and the burdened land owner would negotiate and agree to the release, potentially involving compensation for the beneficiary.

Facilitating Development or Sale:
Releasing or modifying restrictive covenants could pave the way for property development or sale, potentially increasing the property's value and utility.

Legal Formalisation:
The deed of release provided a legally binding document outlining the agreement to release or modify the covenant, thereby altering the property's title accordingly.

Addressing Obsolete or Unduly Burdensome Covenants:
If a restrictive covenant was deemed obsolete due to changes in the character of the property or surrounding area, or if it impeded a reasonable use of the land, an application could be made to the Lands Tribunal (now the Upper Tribunal (Lands Chamber)) under Section 84 of the Law of Property Act 1925 to discharge or modify it. This process could culminate in a deed of release formalising the Tribunal's decision.

Potential for Legal Challenge:
If there were disagreements or challenges regarding the release or modification, the matter could be referred to the Lands Tribunal (now the Upper Tribunal (Lands Chamber)) for resolution.

Therefore, deeds of release were a key instrument in managing and adjusting restrictive covenants on property in the UK during the 1980s, enabling property owners to overcome restrictions and adapt their properties to changing needs and circumstances.

Covenants Not Running With Land:

Restrictive covenants, which are restrictions on land use, may not run with the land (and therefore not bind future owners) if certain conditions are met. These include the covenant becoming obsolete due to changed circumstances, a lack of clarity or enforceability due to poor wording, the original parties to the covenant no longer being traceable, or if the land benefiting from the covenant is no longer identifiable or owned by the original beneficiary. Additionally, if the land with the burden and the land with the benefit come under the same ownership, the covenant can be extinguished.

Here's a more detailed breakdown:

1. Obsolescence due to changed circumstances:
If the character of the neighborhood has significantly changed since the covenant was created, it may be deemed obsolete and unenforceable.
For example, a covenant restricting property to residential use might become unenforceable if the area has become predominantly commercial.
The Upper Tribunal (Lands Chamber) can discharge or modify restrictive covenants if they are deemed obsolete, impede reasonable use of the land, or if the beneficiaries have agreed to release or modify them.

2. Lack of clarity or enforceability:

If the covenant is poorly written, vague, or ambiguous, it may be difficult to enforce.
The covenant must be clear about what is prohibited or required, and it must be clear what land is benefiting from the covenant.

3. Untraceable beneficiaries:

If the original parties to the covenant are deceased, the company dissolved, or the beneficiary cannot be located, it may be impossible to enforce the covenant.
The covenant may also be unenforceable if the land benefiting from it is no longer identifiable or owned by the original beneficiary.

4. Unity of ownership:

If the land burdened by the covenant and the land that benefits from it come under the same ownership, the covenant is typically extinguished. This is because the covenant is no longer needed to protect the land's value or use, as the same person owns both the burdened and benefited land.

5. Time-limited covenants:

If the restrictive covenant has a set time limit, it will expire at the end of that period.

6. Abandonment:

If a breach of the covenant has occurred and has been allowed to continue for a significant period without any objection, it may be considered abandoned under the principle of estoppel.

7. Breach of the covenant by the beneficiary:

If the person benefiting from the covenant has also breached the covenant, it may be difficult to enforce it against another party.

In conclusion, restrictive covenants can be rendered unenforceable if circumstances change, the covenant is poorly drafted, the beneficiaries become untraceable, unity of ownership occurs, or the covenant has a time limit.

Notice to complete:

A notice to complete is a legal document used in property transactions (like buying or selling a house) in the UK when a party is not ready to finalize the transaction by the agreed-upon date. It essentially sets a deadline for the defaulting party to complete the purchase, often within 10 working days. Failure to comply with the notice can lead to further legal action, including contract termination and potential financial penalties.

Here's a more detailed explanation:

Purpose:

Enforces contractual obligations:
When one party (buyer or seller) fails to meet the agreed-upon completion date, the other party can issue a notice to complete to make time of the essence.

Sets a new deadline:
The notice specifies a new completion date, typically within 10 working days, after which the contract can be rescinded if the deadline is not met.

Prepares for further action:
If the notice is ignored, the non-defaulting party can take further steps, such as terminating the contract, retaining deposits, or seeking damages.

Key Elements:

Formal document:
A notice to complete is a formal legal document, usually prepared by solicitors.
Clear language:
It clearly states the intention to complete the transaction and the consequences of not doing so.

Specificity:
It includes the completion date, parties involved, and the property details.

Consequences of non-compliance:
Failure to comply with the notice can lead to the non-defaulting party taking legal action.

Important Considerations:

Making time of the essence:
The notice to complete makes time a crucial element of the contract, meaning a delay can be a breach of contract.

Impact on the defaulting party:
Failure to comply with a notice to complete can result in significant financial loss, including losing the deposit and facing legal action.

Professional advice:
It's essential to seek legal advice from a solicitor or conveyancer when dealing with a notice to complete, as it has legal implications.

Summary Halsbury’s Laws of England (Fourth Edition)

What does Halbury's Laws Fourth Edition say about releasing restrictive covenants and deed of release.
Halsbury’s Laws of England (Fourth Edition) provides a comprehensive legal framework on restrictive covenants, including their modification and release. While the full text is not publicly available online, here’s a summary of what it typically covers regarding deeds of release and restrictive covenants:
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📚 Key Principles from Halsbury’s Laws (Fourth Edition)

1. Nature of Restrictive Covenants

• A restrictive covenant is a promise that restricts the use of land for the benefit of another parcel of land.
• It must be negative in nature (e.g., not to build, not to trade) and intended to run with the land.

2. Release by Agreement

• A restrictive covenant may be released or modified by agreement between the parties.
• This is usually done through a Deed of Release, which must:
• Be executed as a deed (signed, witnessed, and delivered).
• Clearly identify the covenant being released.
• Be agreed upon by the current owner of the benefiting land.

3. Effect of the Deed

• Once executed, the deed extinguishes or modifies the covenant.
• It should be registered with HM Land Registry to ensure the change is reflected in the title.

4. Statutory Modification or Discharge

• If agreement cannot be reached, an application may be made to the Upper Tribunal (Lands Chamber) under Section 84 of the Law of Property Act 1925.

• Grounds for discharge include:
• The covenant is obsolete.
• It impedes reasonable use of the land.
• No injury will be caused by its removal.
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🔍 Where to Read More
You can access a scanned copy of Volume 4 of Halsbury’s Laws of England (Fourth Edition) on Archive.org A. It includes detailed commentary on property law, including restrictive covenants.

What is the law regarding deed of release regarding restrictive covenants.

In the context of property law, a deed of release for restrictive covenants is a legal document used to formally extinguish or modify a restrictive covenant that burdens a piece of land. Here's an overview of the law and key aspects:

What is a Restrictive Covenant?

A restrictive covenant is a legally binding promise that restricts how a landowner can use their property. It is typically created for the benefit of another piece of land, known as the "dominant land." The land that is subject to the restriction is called the "servient land."

Common examples of restrictive covenants include:

* Prohibiting building on a certain part of the land.
* Restricting the property to residential use only.
* Limiting the number of buildings that can be erected.
* Prohibiting the use of the property for business purposes.

These covenants "run with the land," meaning they are binding on successive owners, provided they are correctly registered on the property's title.

The Deed of Release

A deed of release is the most straightforward way to discharge a restrictive covenant. It is a formal, legal agreement where the owner(s) of the dominant land (the party with the benefit of the covenant) agree to release the owner of the servient land from the restriction.

Key legal points:

* Mutual Agreement: A deed of release is based on the mutual consent of all parties involved. The owner of the dominant land is not obligated to agree to the release and may request a premium (a payment) for doing so.

* Parties Involved:

* The Beneficiary: All parties who have the benefit of the covenant must agree to the release. This can be complex, especially in older developments where the benefit of the covenant may have been passed on to many different landowners.
* The Burdened Landowner: The owner of the land burdened by the covenant is the party seeking the release.
* Mortgage Lenders: If the dominant land is subject to a mortgage, the lender's consent will also be required for the release to be effective, as they have an interest in the property.

* Legal Formalities:

* A deed of release must be executed as a deed, which requires specific legal formalities (e.g., being in writing, clear on its face that it is a deed, and being signed and witnessed).
* Once executed, the deed of release must be registered with the Land Registry to remove the restrictive covenant from the title of the servient land.

Other Methods of Discharging Restrictive Covenants:

If a mutual agreement cannot be reached, a landowner burdened by a restrictive covenant has other options, although these are typically more complex and costly:

* Application to the Upper Tribunal (Lands Chamber): Under Section 84 of the Law of Property Act 1925, a person with an interest in land may apply to the Upper Tribunal to have a restrictive covenant discharged or modified.

The Tribunal has the discretion to do so on one or more of the following grounds:

* The covenant is obsolete due to changes in the character of the property or neighborhood.
* The covenant impedes a reasonable use of the land and either does not secure any practical benefits of substantial value or advantage, or is contrary to the public interest, and money would be an adequate compensation for any loss.
* All those with the benefit of the covenant have agreed to its discharge or modification.
* The proposed discharge or modification will not injure those entitled to the benefit of the covenant.

* Restrictive Covenant Indemnity Insurance:

In some cases, a landowner may choose to proceed with a development in breach of the covenant and take out an indemnity insurance policy. This is often used when the beneficiaries of the covenant cannot be identified or located. The policy covers the risk of a beneficiary taking legal action to enforce the covenant. However, it is not a legal solution to the covenant itself and can only be used if there has been no contact with the beneficiaries regarding a release.

* Court Declaration:
A court can be asked to declare whether a covenant is enforceable, for example, if its wording is ambiguous or if there is a dispute over who has the right to enforce it.

Is property title the title.

This is an excellent and common question because the terms "title" and "deed" are often used interchangeably, but they refer to two distinct things.
Property Title is the concept of ownership.
It is an abstract, legal concept.
It represents your "bundle of rights" to a property, which includes the right to possess, use, control, and transfer the property.
When a solicitor "checks the title," they are investigating this legal concept of ownership to ensure it is clear, valid, and free from any legal claims or issues.

A Property Deed is the physical legal document.

It is a tangible document.
Its purpose is to transfer the title from one party (the seller, or "grantor") to another (the buyer, or "grantee").

The deed is the evidence of the title transfer. It includes a legal description of the property, the names of the parties involved, and the signatures of the seller and witnesses.

Analogy:

Think of it like owning a car.
The title is the legal concept that you are the owner of the car.
The deed is the physical vehicle registration document that proves you are the owner and allows you to transfer ownership to someone else.

In modern property law, especially in countries with a Land Registry (like the UK), the "title deeds" are now often a digital record held by the Land Registry. This record contains the essential information from the old paper deeds, making the transfer of ownership more secure and efficient. However, the underlying principle remains the same: the deed is the document that transfers the rights of ownership, which is the title.