Land And Conveyancing Law Reform Act 2009

SCHEDULE 3

Covenants Implied in Conveyances

Sections 80 and 81 .

PART 1

Extent of the Burden of Covenants

1. In this Schedule, unless either the context otherwise requires or the contrary is expressed, the covenantor’s liability in respect of any covenant extends to the acts or omissions only of persons within any of the following classes:

(1) the covenantor and any person conveying by the covenantor’s direction;

(2) any person through whom the covenantor derives title;

(3) any person (including a mortgagee) who either holds or has held a derivative title from the covenantor for less than the estate or interest vested in the covenantor or who holds or has held such a derivative title from any predecessor in title of the covenantor;

(4) any person who holds or has held in trust for the covenantor.

2. It is not a breach of a covenant contained in this Schedule where the conveyance by the covenantor was made expressly subject to the act, matter or thing which, but for this paragraph, would or might have caused such a breach.

3. The covenantor has no liability for any defect in the title of which it is proved that the covenantee had actual knowledge before the making of the contract to convey or the making of the conveyance (whichever is the earlier).

PART 2

Implied Covenants

Paragraph 1

Class 1 Conveyances

Covenants implied in a conveyance (other than a mortgage) for valuable consideration of an estate or interest in land (other than a tenancy) made by a person who is expressed to convey “as beneficial owner”.

(1) That the covenantor has the right to convey the subject-matter of the conveyance, save that the covenantor’s liability is only in respect of any acts or omissions of the covenantor or persons within class (ii) of paragraph 1 of Part 1.

(2) That the person to whom the conveyance is made will quietly enjoy the subject-matter of the conveyance without disturbance from any person within any class in paragraph 1 of Part 1.

(3) That the subject-matter of the conveyance is free from all claims, demands, estates, incumbrances and interests.

(4) That the covenantor will, at the covenantor’s own cost, take such action as may be necessary for the better assuring of the subject-matter of the conveyance as may from time to time be reasonably required by the person to whom the conveyance is made and the persons deriving title under that person.

Paragraph 2

Class 2 Conveyances

Covenants implied in a conveyance (other than a mortgage) for valuable consideration of land comprised in a lease made by a person who is expressed to convey “as beneficial owner”.

(1) to (4) Covenants (1) to (4) in paragraph 1.

(5) That the lease which created the subject-matter of the conveyance is at the time of the conveyance valid and effectual.

(6) That the rent reserved by the lease has up to the time of the conveyance been paid and the covenants expressly or impliedly contained in the lease have been performed and observed by the lessee.

The covenantor’s liability in respect of covenants (5) and (6) is restricted to—

( a) any acts or omissions of the covenantor or persons within class (ii) of paragraph 1 in Part 1, and

( b) as regards the covenants mentioned in covenant (6), breaches caused by such acts and omissions the consequences of which could not be discovered on reasonable inspection of the land conveyed.

Paragraph 3

Class 3 Conveyances

Covenants implied in a conveyance comprising a mortgage of land (other than land comprised in a lease) made by a person who is expressed to convey “as beneficial owner”.

(1) to (4) Covenants (1) to (4) in paragraph 1.

Those covenants are subject to the following variations, that is to say—

( a) liability in respect of any breach of the covenants extends to the acts or omissions of any person whether or not that person is within the classes of person set out in paragraph 1 of Part 1;

( b) covenant (2) (for quiet enjoyment) is not implied against any mortgagor until the mortgagee has lawfully entered into possession of the land conveyed.

Paragraph 4

Class 4 Conveyances

Covenants implied in a conveyance comprising a mortgage of land comprised in a lease made by a person who is expressed to convey “as beneficial owner”.

(1) to (4) Covenants (1) to (4) in paragraph 1, subject to the variations mentioned in paragraph 3.

(5) That the grant or lease which created the estate out of which the subject-matter of the conveyance is created is at the time of the conveyance valid and effectual and that the rent reserved by the grant or lease has up to that time been paid and that the covenants expressed or implied in the grant or lease have been performed and observed.

(6) That the covenantor will from time to time, so long as any money remains owing on the security of the land conveyed, pay the rent reserved by the grant or lease and perform and observe the covenants in it and will indemnify the person to whom the conveyance is made in respect of any consequences of the breach of this covenant.

Paragraph 5

Class 5 Conveyances

Covenant implied in a conveyance made by a person who is expressed to convey “as trustee”, “as mortgagee”, “as personal representative” or under an order of the court.

That the covenantor has not, by virtue of any act or omission of the covenantor, caused the title to the estate or interest conveyed to be liable to be impeached through the existence of any incumbrance or rendered the covenantor unable to convey that estate or interest in the manner in which it is expressed to be conveyed.

PART 3

Additional Implied Covenants for Land Comprised in a Lease

Paragraph 1

Class 6 Conveyances

Additional covenants implied in a conveyance (other than a mortgage) for valuable consideration of—

(a) the entirety of land comprised in a lease, or

(b) part of the land comprised in a lease, subject to a part of the rent reserved by the lease which has been, or is by the conveyance, apportioned with the consent of the lessor,

for the residue of the term or interest created by the lease.

(1) That the assignee, or the person deriving title under the assignee, will at all times, from the date of the conveyance or other date stated in it, duly pay all rent becoming due under the lease creating the estate for which the land is conveyed, or, as the case may be, such part of such rent as has been apportioned to the land conveyed, and observe and perform all the covenants, contained in it and on the part of the lessee to be observed and performed, so far as they relate to the land conveyed.

(2) That the assignee will at all times, from that date, indemnify the assignor and the assignor’s estate and their estates from and against all claims, costs and proceedings on account of any omission to pay the rent, or the part of the rent so apportioned, or any breach of any of the covenants, so far as they relate to the land conveyed.

Paragraph 2

Class 7 Conveyances

Additional covenants implied in a conveyance (other than a mortgage) for valuable consideration of part of the land comprised in a lease, for the residue of the term or interest created by the lease, subject to a part of the rent reserved by the lease which has been, or is by the conveyance, apportioned without the consent of the lessor.

(1) In every case That the assignee will at all times, from the date of the conveyance, or other date stated in it, pay the apportioned rent and observe and perform all the covenants (other than the covenant to pay the entire rent) contained in the lease creating the estate for which the land is conveyed, and on the part of the lessee to be observed and performed, so far as the same relate to the land conveyed; and also will at all times from that date indemnify the assignor and the assignor’s estate, from and against all claims, costs and proceedings on account of any omission to pay the apportioned rent or any breach of any of such covenants.

(2) Where the conveying party is expressed to convey “as beneficial owner” That the assignor, or the persons deriving title under the assignor, will at all times, from the date of the conveyance, or other date stated in it, pay the balance of the rent (after deducting the said apportioned rent and any other rents similarly apportioned in respect of land not retained) and observe and perform all the covenants (other than the covenant to pay the entire rent) contained in the lease and on the part of the lessee to be observed and performed so far as they relate to the land demised (other than the land comprised in the conveyance) and remaining vested in the assignor; and also will at all times, from that date, indemnify the assignee, and the assignee’s estate, from and against all claims, costs and proceedings on account of any omission to pay the balance of the rent or any breach of any of such covenants.