MAKING LAND WORK: EASEMENTS, COVENANTS AND …

1 73991 Cover_Cover 25/05/2011 11:54 Page 1. Law commission Reforming the law MAKING Land Work: Easements, COVENANTS and Profits Prendre Law commission MAKING Land Work: Easements, COVENANTS and Profits Prendre Published by TSO (The Stationery Office) and available from: Online Mail, telephone, fax and email TSO. PO Box 29, Norwich NR3 1GN. Telephone orders/general enquiries: 0870 600 5522. Order through the Parliamentary Hotline Lo-Call 0845 7 023474. Fax orders: 0870 600 5533. Email: Textphone: 0870 240 3701. The Parliamentary Bookshop 12 Bridge Street, Parliament Square, Law Com No 327. London SW1A 2JX. Telephone orders/general enquiries: 020 7219 3890. Fax orders: 020 7219 3866. Email: Internet: TSO@Blackwell and other accredited agents Customers can also order publications from: TSO Ireland 16 Arthur Street, Belfast BT1 4GD. Telephone orders/general enquiries: 028 9023 8451. Fax orders: 028 9023 5401. Law Com No 327. The Law commission (LAW COM No 327). MAKING LAND WORK: EASEMENTS, COVENANTS AND PROFITS PRENDRE.

2 Presented to Parliament pursuant to section 3(2) of the Law Commissions Act 1965. Ordered by the House of Commons to be printed on 7 June 2011. HC 1067 London: The Stationery Office Crown copyright 2011. You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit or e-mail: Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to us at The Law commission , Steel House, 11 Tothill Street, London SW1H 9LJ. This publication is also available on ISBN: 9780102972504. Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty's Stationery Office ID 2434185 06/11. Printed on paper containing 75% recycled fibre content minimum. ii THE LAW commission . The Law commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law.

3 The Law Commissioners are: The Right Honourable Lord Justice Munby, Chairman Professor Elizabeth Cooke Mr David Hertzell Professor David Ormerod Miss Frances Patterson QC. The Chief Executive of the Law commission is Mr Mark Ormerod CB. The Law commission is located at Steel House, 11 Tothill Street, London SW1H 9LJ. The terms of this report were agreed on 20 May 2011. The text of this report is available on the Easements project page of the Law commission 's website at iii MAKING LAND WORK: EASEMENTS, COVENANTS . AND PROFITS PRENDRE. CONTENTS. Paragraph Page PART 1: EASEMENTS, COVENANTS AND PROFITS PRENDRE: 1. INTRODUCTION. The scope and impact of the project 1. The background to the project 2. A summary of this Report and of our recommendations 4. Impact Assessment 7. Human rights 8. Acknowledgements 8. PART 2: ESTATES AND INTERESTS IN LAND: THE CURRENT LAW 9. Introduction 9. The foundations of land law 9. Estates and interests in land 9. Legal and equitable rights 10.

4 The modern structure of legal and equitable estates and interests 11. Easements, COVENANTS and profits prendre 13. Easements 13. Profits 17. COVENANTS 18. Estate rentcharges 20. The creation and registration of easements, profits and COVENANTS 21. Title registration 22. Land Charges registration 24. The extinguishment of easements, profits and COVENANTS 24. iv Paragraph Page Conclusion 26. PART 3: REFORM OF THE LAW OF EASEMENTS AND PROFITS 27. Introduction 27. (1) The creation of profits 27. (2) The implication of easements 29. The current law 29. Codification or reform? 32. Implied grant and implied reservation 32. The options for reform 33. (3) Section 62 of the Law of Property Act 1925 37. The current law 37. Reform of section 62 of the Law of Property Act 1925 39. (4) The acquisition of easements by prescription 41. Introduction 41. Abolition? 42. The current law 44. Conclusions on the current law 50. A new statutory scheme for prescription 51. Prescription and the Crown 63.

5 Transitional provisions 63. (5) Easements that confer the right to extensive use 64. The legal principles 64. Extensive or exclusive use 67. Reform 69. (6) The extinguishment of easements and profits by abandonment 70. The current law 70. The proposals in the Consultation Paper 72. v Paragraph Page (7) The termination of the estate to which an interest is appurtenant 74. The decision in Wall v Collins 74. Reactions to Wall v Collins 77. Responses to our consultation 77. Our recommendation 79. PART 4: REFORMS FOR REGISTERED TITLES 83. Introduction 83. Section 58 of the Land Registration Act 2002: a clarification 84. The unity of seisin rule 85. Land Registry practice and development plans 87. Mortgages of part 89. Land that falls into common ownership 89. Consultees' responses 90. Our recommendation 90. The express release of registered interests 92. The use of short-forms for the creation of easements 93. PART 5: COVENANTS : THE CASE FOR REFORM 95. Introduction 95.

6 Problems in the law relating to COVENANTS 96. Positive obligations: the case for reform 100. The practical problems connected with positive obligations 100. The arguments for and against reform 102. Safeguards to accompany positive obligations 106. Recommendations for the reform of freehold COVENANTS 111. Additional details 114. Land obligations in unregistered land 114. vi Paragraph Page The future for the rule in Tulk v Moxhay and the current law of restrictive COVENANTS 115. Land obligations and commonhold 117. Land obligations, negative easements and easements of fencing 117. PART 6: A NEW LEGAL INTEREST IN LAND 120. Introduction 120. Land obligations in the draft Bill 121. A new power for estate owners 121. The exercise of the power: creating an appurtenant right 122. The nature of a land obligation 124. Ancillary rights 126. Future freehold COVENANTS 126. The creation and registration of land obligations 129. The requirements for the creation of legal and equitable interests in land 129.

7 Land obligations in unregistered land 131. Land obligations to be created only expressly 132. Further provisions for registered title 133. Consequential provisions about registration 133. Recommendations derived from Part 4 above 135. The enforceability of land obligations 138. Transmission of the benefit of a land obligation 138. Transmission of the burden of a land obligation 140. Transmission of part of the burdened land 143. Adverse possession 147. Liability and remedies for breach of land obligations 149. The cause of action 149. Liability for breach 149. vii Paragraph Page Remedies for breach of a land obligation 151. Land obligations and the Crown 154. PART 7: THE JURISDICTION OF THE LANDS CHAMBER OF THE. UPPER TRIBUNAL 157. Introduction 157. The background to section 84 157. The proposals in the Consultation Paper 158. Consultees' responses 159. Our recommendations and the draft Bill 162. Extending the jurisdiction of the Lands Chamber by bringing more interests within its scope 162.

8 Extending the jurisdiction of the Lands Chamber to enable it to make declarations 165. The grounds for the discharge and modification of interests in land 167. PART 8: LIST OF RECOMMENDATIONS 175. APPENDIX A: DRAFT BILL AND EXPLANATORY NOTES 185. APPENDIX B: ADVISORY GROUP MEMBERS 237. APPENDIX C: SAMPLE REGISTERS 238. APPENDIX D: A NOTE ON ENFORCEMENT 245. APPENDIX E: SECTION 84 OF THE LAW OF PROPERTY ACT 1925 250. APPENDIX F: LIST OF CONSULTEES 254. viii THE LAW commission . MAKING LAND WORK: EASEMENTS, COVENANTS AND PROFITS PRENDRE. To the Right Honourable Kenneth Clarke QC, MP, Lord Chancellor and Secretary of State for Justice PART 1. EASEMENTS, COVENANTS AND PROFITS . PRENDRE: INTRODUCTION. THE SCOPE AND IMPACT OF THE PROJECT. We live on a small island. Land is in great demand; it provides homes and places of business, security for debt, space for recreation, a source of food and minerals; the list is endless. Ownership of land is important and valuable. In this project we are concerned not with the ownership of land, but with the complex web of rights and obligations that link different parcels of land, and their owners, together.

9 Some are security rights principally mortgages and those are not part of this project. This project is about easements, profits prendre and COVENANTS . These three types of rights can be shortly described, but the law that relates to them is vast. Easements are, in general, rights to do something on someone else's land; private rights of way are the most obvious Profits . prendre which from here onwards we call simply profits are rights to take something from someone else's land, such as grass for grazing, or fish. Freehold covenants2 are a type of contractual promise which, as we shall explain in more detail later, behave like property rights because some of them can be enforced against future owners of the land, rather than just against the person who made the contractual promise. An easement, profit or covenant can be thought of as, on the one hand, imposing a burden on a piece of land. Anyone who buys land that is subject to a drainage easement, say, in favour of a neighbour, has to accept the burden of that easement; land lawyers say that the right binds the land and that the purchaser cannot take the land free from it.

10 On the other hand, the right gives a benefit to the right-holder, who will in most cases be another landowner. Over three quarters of freehold properties are affected by one or more of these They can be very valuable. Land that is burdened with a restrictive 1. Public rights of way are not easements and fall outside the scope of this project. 2. The COVENANTS with which the project is concerned are freehold, not leasehold; leasehold COVENANTS operate under a wholly different legal regime. See, para n 4 below. 3. Easements, COVENANTS and Profits Prendre (2008) Law commission Consultation Paper No 186 (we refer to this document as the Consultation Paper in this Report), para 1. covenant not to build upon it, for example, may be safeguarded as a precious green space; or the covenant may be released for a considerable sum if the person who has the benefit of that promise not to build decides that he or she would prefer to be bought out. Easements may be convenient facilities, as are most rights of way, or they may be vitally necessary: if the benefit of an easement of support is lost, a building may collapse.