Easements, Covenants and Profits À Prendre

The Law Commission (LAW COM No 327) MAKING LAND WORK: EASEMENTS, COVENANTS AND PROFITS À PRENDRE 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 £xx.xx 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. 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 www.lawcom.gov.uk. iii MAKING LAND WORK: EASEMENTS, COVENANTS AND PROFITS À PRENDRE CONTENTS Paragraph Page PART 1: EASEMENTS, COVENANTS AND PROFITS À PRENDRE: 1 INTRODUCTION The scope and impact of the project 1.1 1 The background to the project 1.6 2 A summary of this Report and of our recommendations 1.13 4 Impact Assessment 1.26 7 Human rights 1.32 8 Acknowledgements 1.34 8 PART 2: ESTATES AND INTERESTS IN LAND: THE CURRENT LAW 9 Introduction 2.1 9 The foundations of land law 2.3 9 Estates and interests in land 2.3 9 Legal and equitable rights 2.6 10 The modern structure of legal and equitable estates and interests 2.10 11 Easements, covenants and profits à prendre 2.16 13 Easements 2.18 13 Profits 2.31 17 Covenants 2.37 18 Estate rentcharges 2.44 20 The creation and registration of easements, profits and covenants 2.50 21 Title registration 2.55 22 Land Charges registration 2.64 24 The extinguishment of easements, profits and covenants 2.65 24 iv Paragraph Page Conclusion 2.72 26 PART 3: REFORM OF THE LAW OF EASEMENTS AND PROFITS 27 Introduction 3.1 27 (1) The creation of profits 3.3 27 (2) The implication of easements 3.11 29 The current law 3.11 29 Codification or reform? 3.25 32 Implied grant and implied reservation 3.28 32 The options for reform 3.31 33 (3) Section 62 of the Law of Property Act 1925 3.52 37 The current law 3.52 37 Reform of section 62 of the Law of Property Act 1925 3.59 39 (4) The acquisition of easements by prescription 3.71 41 Introduction 3.71 41 Abolition? 3.74 42 The current law 3.86 44 Conclusions on the current law 3.110 50 A new statutory scheme for prescription 3.115 51 Prescription and the Crown 3.175 63 Transitional provisions 3.179 63 (5) Easements that confer the right to extensive use 3.188 64 The legal principles 3.188 64 Extensive or exclusive use 3.199 67 Reform 3.205 69 (6) The extinguishment of easements and profits by abandonment 3.212 70 The current law 3.212 70 The proposals in the Consultation Paper 3.220 72 v Paragraph Page (7) The termination of the estate to which an interest is appurtenant 3.232 74 The decision in Wall v Collins 3.232 74 Reactions to Wall v Collins 3.242 77 Responses to our consultation 3.244 77 Our recommendation 3.251 79 PART 4: REFORMS FOR REGISTERED TITLES 83 Introduction 4.1 83 Section 58 of the Land Registration Act 2002: a clarification 4.11 84 The “unity of seisin” rule 4.19 85 Land Registry practice and development plans 4.25 87 Mortgages of part 4.34 89 Land that falls into common ownership 4.39 89 Consultees’ responses 4.41 90 Our recommendation 4.44 90 The express release of registered interests 4.52 92 The use of short-forms for the creation of easements 4.59 93 PART 5: COVENANTS: THE CASE FOR REFORM 95 Introduction 5.1 95 Problems in the law relating to covenants 5.4 96 Positive obligations: the case for reform 5.21 100 The practical problems connected with positive obligations 5.21 100 The arguments for and against reform 5.29 102 Safeguards to accompany positive obligations 5.44 106 Recommendations for the reform of freehold covenants 5.63 111 Additional details 5.77 114 Land obligations in unregistered land 5.78 114 vi Paragraph Page The future for the rule in Tulk v Moxhay and the current law of restrictive covenants 5.82 115 Land obligations and commonhold 5.90 117 Land obligations, negative easements and easements of fencing 5.92 117 PART 6: A NEW LEGAL INTEREST IN LAND 120 Introduction 6.1 120 Land obligations in the draft Bill 6.7 121 A new power for estate owners 6.7 121 The exercise of the power: creating an appurtenant right 6.14 122 The nature of a land obligation 6.22 124 Ancillary rights 6.33 126 Future freehold covenants 6.37 126 The creation and registration of land obligations 6.46 129 The requirements for the creation of legal and equitable interests in land 6.46 129 Land obligations in unregistered land 6.54 131 Land obligations to be created only expressly 6.59 132 Further provisions for registered title 6.63 133 Consequential provisions about registration 6.64 133 Recommendations derived from Part 4 above 6.75 135 The enforceability of land obligations 6.90 138 Transmission of the benefit of a land obligation 6.92 138 Transmission of the burden of a land obligation 6.101 140 Transmission of part of the burdened land 6.118 143 Adverse possession 6.134 147 Liability and remedies for breach of land obligations 6.146 149 The cause of action 6.147 149 Liability for breach 6.150 149 vii Paragraph Page Remedies for breach of a land obligation 6.159 151 Land obligations and the Crown 6.179 154 PART 7: THE JURISDICTION OF THE LANDS CHAMBER OF THE UPPER TRIBUNAL 157 Introduction 7.1 157 The background to section 84 7.3 157 The proposals in the Consultation Paper 7.6 158 Consultees’ responses 7.12 159 Our recommendations and the draft Bill 7.24 162 Extending the jurisdiction of the Lands Chamber by bringing more interests within its scope 7.27 162 Extending the jurisdiction of the Lands Chamber to enable it to make declarations 7.39 165 The grounds for the discharge and modification of interests in land 7.52 167 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 À PRENDRE To the Right Honourable Kenneth Clarke QC, MP, Lord Chancellor and Secretary of State for Justice PART 1 EASEMENTS, COVENANTS AND PROFITS À PRENDRE: INTRODUCTION THE SCOPE AND IMPACT OF THE PROJECT 1.1 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. Some are security rights – principally mortgages – and those are not part of this project. This project is about easements, profits à prendre and covenants. 1.2 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 examples.1 Profits à 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. 1.3 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. On the other hand, the right gives a benefit to the right-holder, who will in most cases be another landowner. 1.4 Over three quarters of freehold properties are affected by one or more of these rights.3 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 5.3 n 4 below. 3 Easements, Covenants and Profits à Prendre (2008) Law Commission Consultation Paper No 186 (we refer to this document as the “Consultation Paper” in this Report), para 1.3.

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