Sale of land – Positive covenants – Enforcement – Appellant purchasing house from registered social landlord – Vendor’s predecessor acquiring property with partial funding from council subject to positive covenant to carry out essential repairs – Whether council entitled to enforce repairing covenant against appellant as covenantor’s successor in title – Appeal allowed
The appellant purchased a house at auction from a registered social landlord (RSL), which had itself acquired the house from a housing association. The association’s purchase of another house in the same road had been partly funded by the respondent council. In return, the association had agreed to grant to the respondents nomination rights over six of its properties. The written agreement was made pursuant to section 609 of the Housing Act 1985 and was stated to be enforceable “without any limit of time against any body or person deriving title from the original covenantor in respect of its interest… or of any lesser interest in the properties”. By clause 4 of the agreement, the association undertook to carry out essential repairs to the properties with the intention of providing low-cost housing accommodation for persons nominated by the respondents.
In March 2005, the agreement was registered as a local land charge. The appellant learnt of the agreement when he received the results of a local search in the course of buying his property. In April 2005, the appellant became the registered proprietor of the property.
The auction catalogue had described the property as being in need of complete refurbishment and redecoration, thereby suggesting that the association had not carried out its obligations under the agreement. An issue arose as to whether the respondents were empowered, by section 609 of the 1985 Act, to enforce against the appellant the positive obligations contained in the agreement, in particular to carry out the essential repair works.
The county court held that, in the absence of any authority on the proper interpretation of the section, the weight of academic authority concluded that section 609 did allow positive covenants to be enforced. The appellant appealed.
Held: The appeal was allowed.
Section 609 did not permit the enforcement of positive covenants against a subsequent purchaser of the freehold; the concluding part of that section put a local housing authority into the same position as a landowner that had taken a covenant on a disposal of freehold land for the benefit of retained land and had continued to retain that land.
Section 609 enabled a covenant to be enforced by a housing authority “in like manner” and “to the like extent” as though it had been interested in “such land” (that is, land for the benefit of which the covenant was entered into). Parliament must be taken to have legislated against the background of the general law and, in the absence of contrary authority, the intention must have been to disapply the requirement that the covenantee retained land, and the covenants were enforceable to the extent that they benefited the land of the covenantee. This was the limit of what the section said and parliament could not be taken to have done more. In particular, clearer words would have been necessary had parliament intended to put a local housing authority into a position that no private landowner could achieve, by making the burden of positive covenants run with freehold land. Furthermore, the Law Commission’s pre-consolidation report was a strong indication that that was not parliament’s intention.
A covenant entered into pursuant to section 609 was enforceable by injunction or damages in lieu; the extent of enforcement was the extent to which the covenants were negative in substance.
Robert Craven (instructed by Brinley Morris Rees & Jones, of Llanelli) appeared for the appellant; Ashley Underwood QC and Richard Moules (instructed by the legal department of Wycombe District Council) appeared for the respondents.
Eileen O’Grady, barrister
