Law Commission report on easements, covenants and profits à prendre

The law of real property as it relates to the grant and enforcement of easements, covenants and profits à prendre still fazes even the most experienced property solicitors, and is virtually incomprehensible to property owners and mortgagees. 

The Law Commission (LC) published a consultation on the subject in March 2008 and the results of that consultation have been fed into its report "Making Land Work: a comprehensive review of the general law of Easements, Covenants and Profits à Prendre."  This report was published on 8 June 2011 and sets out recommended reforms to simplify the system of registration, which have been put to the Government for consideration.

Previous LC recommendations led to the enactment of the Land Registration Act 2002.  The Royal Institution of Chartered Surveyors believes the new recommendations will greatly simplify land law in England & Wales.

Easements

Easements are rights enjoyed over land and can be either positive (requiring an action such as rights of way) or negative (prohibiting an action such as restrictions on use of land).  Easements are pivotal to the use, enjoyment and development of land.  Unfortunately the laws under which these are created or discharged developed organically over centuries and as such they are numerous and, at best, unclear.

Covenants

Covenants are promises either to do (positive) or not to do (negative) something, which will affect the use and enjoyment of land by another.  These are usually made expressly within a deed (e.g. transfer of land) but can be implied under the law as it stands.

Profits à prendre

Profits à prendre are usually commercial interests.  They permit the removal of products from land by one party from another party's land and mainly arise in an agricultural context.

LC recommendations

Broadly speaking the LC's recommendations in the report fall into four main categories.  This article will focus on the first two being: the simplification of existing legislation in relation to easements and profits à prendre; and the proposed reform of the law of covenants.

The LC's third recommendation is the streamlining of the registration process.  In particular the aim is to allow a person to hold an easement over their own land with the stated aim of giving developers greater flexibility "to establish the webs of rights and obligations that allow modern estates to function".

Finally the LC wants the jurisdiction of the Lands Chamber of the Upper Tribunal to be extended to allow it to deal with the discharge and modification of easements and profits created after the commencement of any reform.

Simplifying existing legislation in relation to the creation of easements and profits à prendre

The LC recommends that the law relating to the creation of easements and profits à prendre should be simplified by imposing one statutory scheme to replace the differing and confusing means currently in existence for creating such interests (i.e. common law, lost modern grant, prescription). This recommendation will mean the repeal of the  Prescription Act 1832 which act has been labelled one of the "worst drafted acts on the statute books".

In addition, easements can be implied, and the LC advises that the statutory principle to be followed is whether the easement is "necessary for the reasonable use of the land at the time of the transaction". The report states that this should be determined on the basis of five factors: its use at the time of grant; presence of relevant physical features; intention for future use; available routes; and potential for interference with the servient land and/or inconvenience to the servient owner.

The report's other recommendations include a proposal that prescriptive rights can only be acquired by and against freeholders, rather than long leaseholders.  There is to be a legal presumption that an easement or profit à prendre has been abandoned if not used for a continuous period of 20 years.  The report also states that given the usual commercial nature of profits à prendre, these interests should only be able to be created by express bargain and not by implication. The status of easements by implication is likely to be eroded further with the LC recommending the repeal of section 62 of the Law of Property Act 1925 which currently caters for creation of easements by implication.  Practitioners routinely disapply this section in transfers, as it is regarded as a potential trap allowing licences affecting land to be deemed to be implied easements. Repealing section 62 will clarify matters.

Reforming covenants

At present only negative covenants (covenants not to do something) bind successors in title to property.  Conveyancers are commonly faced with difficulties in advising their purchasing client of the likely enforceability and ownership of a covenant affecting land. Positive covenants do not run with the land and therefore are not enforceable against successors in title to property.  The LC suggests creation of a "land obligation" which would be created for the benefit of an estate and would replace positive and negative covenants going forward. The parties to a land obligation would not remain liable for breaches of it after they had parted with the land.  The land obligation could be drafted into conveyancing documents in the same way as covenants are currently drafted.  In addition, the parties entitled to the benefit and burden of the obligation would be entitled to register their interests. This will be extremely helpful, especially in respect of residential properties where there are many common use features such as shared pathways, boundary fences and party walls.

Some in the property industry feel the LC should have used this opportunity to make proposals for specific private rights such as rights to light.  In fact, repealing the Prescription Act 1832 means losing a common means of acquiring rights to light.  Once the proposals become law, a transitional period of a year is proposed in respect of the repeal of the Prescription Act 1832. In addition, the report suggests compensation available for loss of prescriptive rights should be based on diminution in value only, which is less likely to deter unscrupulous developers than the current risk of profits à prendre based damages calculations.  However the initial response to the report from the property industry seems to be positive, and the response of the Government is eagerly anticipated.

To view the Law Commission's Report click here.