This section is from the book "Real Property, An Introductory Explanation Of The Law Relating To Land", by Alfred F Topham. Also available from Amazon: The New Law Of Property.
I. Personal covenants never pass. - If the lease contains covenants which do not refer to the land which is leased (or "demised"), and are merely personal to the lessees, and the lessee transfers the lease, the transferee is not bound by the covenants unless he expressly agrees to perform them.
Thus A, a tailor who carried on business in Oxford and Cambridge, sold his Cambridge business to B, and leased his Cambridge shop to B.
B covenanted that he would not carry on business as a tailor in Oxford. If B assigned his lease to C, C would not be prevented from carrying on business in Oxford. For B's covenant did not relate to the Cambridge shop which was leased.
II. Covenants which relate to the land leased.
These are usually described in legal documents as "covenants which touch and concern the thing demised."
A. On a sub-lease, never pass. - As we have seen, the sub-lessee cannot sue or be sued by the original landlord.
B. On an assignment of a lease. - (1) Negative covenants and covenants as to things already in existence on the land bind the assignee.
Thus, a covenant not to use the house which is leased for any particular business is binding on the assignee.
If the Oxford tailor leased a house in Oxford to D, and D covenanted that he would not carry on the business of a tailor in that house; and D afterwards assigned the lease to E, E would be bound by the covenant.
So also a covenant to keep an existing house in repair is binding on him.
These covenants bind the assignee whether he has notice of them or not.
(2) Covenants as to things not in existence on . the land do not pass, unless the original lessee covenanted far himself "and his assigns."
Thus A grants vacant land to B for 99 years, and B covenants that he "and his assigns" will build a house on it. B assigns the lease to C. C is bound to build the house.
But if the words "and his assigns " had been omitted from the lease, C would not be bound.
Spencer's Case, 1 Sm. L. C. 11th Edn., p. 55.
(1583) 5 Coke, p. 16.
Spencer leased a bouse to S for 21 years, and S covenanted for him, his executors, and administrators that he would build a brick wall on the land. S assigned the lease to J, and J assigned it to Clark.
Spencer sued Clark for not building the wall.
Held, Clark is not liable on the covenant.
He would have been liable if S had covenanted for himself and his assigns.
C. On an assignment of the reversion. - If the landlord transfers his interest, the new landlord can sue or be sued upon the covenants in the lease, provided they relate to the land. This is provided by a statute of Henry VIII. (m).
Clegg v. Hands,  44 Ch. D. 503.
Clegg & Co. were brewers. They let a public-house to Hands, and Hands covenanted that he would not sell on the premises any beer which was not purchased from Clegg & Co. and their assigns.
Clegg & Co. assigned the reversion to Cain.
Held, Hands cannot sell beer purchased from any person except Cain. Compare this case with Thomas v. Hayward (n), where the covenant was not to keep a public-house within half a mile of the premises, and it was held not to be binding after an assignment.
III. Covenants binding in equity (nn). - On a transfer of any estate (whether by assignment or sublease of a term, or by conveyance of a freehold) negative or restrictive covenants relating to the land are binding in equity on any person who acquires the land with notice of the covenants.
These covenants do not "run with the land "
(m) 32 Hen. VIII c. 34.
(n) (1869) L. R. 4, Exch. 311; and see Anson on Contracts, p. 268. 10th Edn.
(nn) This subject is dealt with here merely for convenience and for purposes of contrast; its operation is not confined to leaseholds.
at law, but if a person takes the land with notice that there are negative covenants, restricting his enjoyment of the land, he is not allowed to break the covenants.
Thus the rule is -
(1) Negative covenants are binding on a purchaser who had notice of them when he bought the land.
Tulle v. Moxhay (1848), 2 Ph. 774.
Tulk sold the central part of Leicester Square to Elms, and Elms covenanted not to build on the land. The land was afterwards sold to Moxhay, who knew of this covenant, but proceeded to build.
Held, Moxhay is bound by the covenant because it would be inequitable that Elms, who gave a small price for the land because of the restrictions, should be able to sell it for a larger price free from the restrictions.
The purchaser is also bound if he has only constructive notice of the covenants.
Thus, Moxhay would have been bound even if he had not actually known of the covenants, if he had not made proper inquiries; for a purchaser of land is said to have "constructive" notice of anything which he would have discovered if he had made a proper investigation of title.
A sub-lessee is for this reason deemed to have notice of the contents of the head lease, and is therefore bound in equity by such negative covenants.
(2) Positive covenants (or covenants to spend money on the land) do not bind a purchaser, even if he has notice of them.
Austerberry v. Corporation of Oldham (1885), 29 Ch. D. 750.
Austerberry (o) sold land to X, and X covenanted to repair a road which ran through part of the land which was retained by
(o) The sale was in fact made by the predecessor in title of Austerberry.
Austerberry. X sold his land to the corporation, who knew of his covenant. The corporation then served a notice on Austerberry requiring him to repair the road. He replied that the corporation were themselves bound to do the repairs because of the covenant made by X.
Held, the corporation are not bound.
(Note. - Austerberry could sue X for damages for breach of his covenant to repair.)