Summary and implications
Following an initial consultation in 2008, the Law Commission published its final report on the law surrounding easements and land covenants in June this year.
The proposed reforms are far-reaching and will be of benefit to all land owners, perhaps especially developers.
The key points are:
- A new interest would be created, known as a “land obligation”;
- A land obligation can be positive or negative in effect, would be registered against the relevant Land Registry title and would run with title to the land;
- A single, more straightforward system would apply for the creation of easements by long user (prescription);
- It would be easier to apply to court to discharge or modify obsolete land obligations, covenants or easements. This would be of fundamental importance to developers.
The need for change
Easements are fundamentally important to landowners in the 21st century. Recent Land Registry figures confirm that at least 65 per cent of freehold titles are subject to one or more easements. Nearly 80 per cent of land is subject to restrictive covenants.
However, the law surrounding easements is complicated. The Law Commission has identified various difficulties with the current law:
- The characteristics of easements create practical difficulties. It is often difficult to establish the extent to which the land that is subject to the right can be used.
- There are too many ways in which easements can be acquired and they are sometimes created inadvertently.
- Easements can rarely be extinguished by abandonment.
- Positive covenants only run with the land in very limited circumstances.
- The rules surrounding whether or not the benefit and burden of restrictive covenants run with the land is complex and technical.
- The contractual liability between the original parties to a covenant is maintained, even after the land has been sold.
The Law Commission proposes a new interest in land: a “land obligation”
A land obligation:
- Would have to “touch and concern” the land (see text box below);
- Could be either positive or negative in nature; and
- Would be a legal right, which could be registered at the Land Registry. This would make it easier to identify what rights and obligations affect a particular parcel of land.
The Law Commission has also recommended an overhaul of the law of prescription
The law of prescription is currently complex and arcane. The Law Commission wants to simplify the law on prescription to create a single statutory scheme. This would not only make it simpler to acquire an easement, but would reduce the amount of litigation based on prescriptive easements.
The law on rights of light will not change for the time being
Prescriptive rights are particularly important in relation to rights of light. The Law Commission has stopped short of a comprehensive review of the law surrounding rights of light and has proposed that this is dealt with as a separate project.
Car parking rights could be easements under the new proposals
Whether or not a particular right is capable of being an easement is commonly litigated. Many recent cases have focused on car parking rights and whether such rights are capable of being easements.
The Law Commission recommends that the right to park a car or other vehicle should be an easement, as long as the rights granted stop short of granting exclusive possession of the land.
Good news for developers: an easement can be created over the owner’s own land
Currently, the land which is subject to the right and the land benefiting from the right, must be in separate ownership. The Law Commission has proposed that, provided both parcels of land are registered, an easement can be created over the owner’s own land. This would be a particularly useful tool for developers of large estates, as appropriate rights could be created and attached to various parcels of land before the parcels are sold.
It will be easier to modify or discharge easements
The Law Commission recommends that the courts should be given wider powers to deal with applications to discharge or modify easements, covenants and the new land obligation. The power will only apply to interests created after the bill has been passed and would extend to both leasehold and freehold property.
Click on the link below for the full Law Commission report: http://www.justice.gov.uk/lawcommission/docs/lc327_easements_report.pdf
Click on the link below for the Executive Summary: http://www.justice.gov.uk/lawcommission/docs/lc327_easements_summary.pdf
Developers can face difficulties if they do not obtain contractual consents from landowners at the time an easement is granted. Click here to find out more.
Easements and covenants
Easement – a right enjoyed by one landowner allowing limited use of land in separate ownership. Can be positive (right of way) or negative (right of light).
Covenant – a promise made by deed between two parties. Can be positive (building a fence) or negative (not to build on a piece of land).
“Touching and concerning” land
This means that the obligation must be beneficial to the party with the benefit of the obligation whilst that party is the owner of the land, but the obligation would be irrelevant if the land was sold to someone else.