The Rule and Its Exceptions — Rhone v Stephens and Halsall v Brizell
The rule (Rhone v Stephens [1994] HL): the burden of a positive covenant does not run with freehold land — it binds only the original covenantor personally; successors in title are not automatically bound. Restrictive covenants are different — their burden runs at equity (Tulk v Moxhay [1848]) to successors who take with notice. Leasehold: the rule does NOT apply; positive covenants run with leasehold tenancies under LT(C)A 1995. Main exception — benefit and burden (Halsall v Brizell [1957]): a successor who takes the benefit of a right under a deed cannot claim the benefit without accepting the inseparably linked burden; example: use of shared private road (benefit) = obligation to contribute to maintenance (burden); Thamesmead Town Ltd v Allotey [1998] CA: requires a genuinely tight conditional link between benefit and burden in the same document. Workarounds: estate rentcharges (RA 1977 s.2(4) — right of entry to perform works and recover costs; LRHUDA 2024 Part 4 FTT challenge rights); commonhold (CLRA 2002; reformed by LRHUDA 2024 — positive obligations in CCS bind all unit holders); indemnity chain (successive personal covenants — breaks on insolvency or untraceable owner); leasehold structure (999-year lease; positive covenants run under LT(C)A 1995); management company with share of freehold. Scotland: Title Conditions (Scotland) Act 2003 allows positive real burdens to bind successors.
Practical Impact on Landlords Buying Freehold Property
Title due diligence: identify all positive covenants in the title deeds (pre-registration deeds; copy documents); check whether a workaround mechanism (estate rentcharge; management company; indemnity chain) is in place. Indemnity covenant on purchase: the buyer of freehold property subject to positive covenants will be required to enter an indemnity covenant in the transfer deed — observe and perform the covenants; indemnify the seller against breach; this extends the personal liability chain. Estate management charges (LRHUDA 2024): freehold homeowners on managed estates have new rights under LRHUDA 2024 Part 4 to challenge unreasonable estate management charges at the First-tier Tribunal (Property Chamber). Title indemnity insurance: provides limited protection for the risk that the indemnity chain is broken; not a substitute for a structural enforcement mechanism. Commonhold reform (LRHUDA 2024): new regime for leasehold-to-commonhold conversion; removes previous barriers to commonhold adoption; positive obligations in the CCS bind all unit holders and successors automatically — the only form of English freehold where positive covenants automatically run with the land.