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Land Transfer Act 2017

Miscellaneous provisions - Amendments, repeals, and revocations - Amendments to Property Law Act 2007

242: New sections 307A to 307F and cross-heading inserted

You could also call this:

"Rules about promises to do something on your land to help someone else"

Illustration for Land Transfer Act 2017

You can find a covenant in gross in sections 307B to 307F and 318A to 318E of the Land Transfer Act 2017. A covenant in gross is a promise that requires someone to do something, or not do something, on their land, and it benefits another person. It is not attached to other land. When you make a covenant in gross, you are promising to do something or not do something on your land. The person who benefits from the covenant can enforce it. The covenant also applies to anyone who owns the land in the future. A covenant in gross is binding on the person who owns the land and anyone who occupies it. It stops being binding when the person is no longer the owner or occupier. The benefit of a covenant in gross can be assigned to someone else. There are rules about how covenants in gross work, including how they rank compared to other interests in the land. The Registrar can note a covenant in gross on the record of title for the land. This means the covenant is an interest noted on the register, but it does not give the covenant any greater operation than it would otherwise have. You can read more about covenants in gross in section 307 of the Land Transfer Act 2017. The Land Transfer Act 2017 has more information about how covenants in gross work. You can find this information in sections 307D and 307E and section 307F.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6731469.

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241: Section 306 amended (Certain duties under, and law on, restrictive covenants not limited or affected by section 303), or

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243: Cross-heading above section 308 amended, or

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Part 5Miscellaneous provisions
Amendments, repeals, and revocations: Amendments to Property Law Act 2007

242New sections 307A to 307F and cross-heading inserted

  1. After section 307, insert:

    Covenants in gross

    307ACovenants in gross

    1. In sections 307B to 307F and 318A to 318E, covenant in gross means a covenant that—

    2. is expressed in an instrument coming into operation on or after the commencement of this section; and
      1. requires the covenantor to do something, or to refrain from doing something, in relation to the covenantor’s land; and
        1. benefits another person, but is not attached to other land.

          307BConstruction of covenant in gross

          1. A covenant in gross is enforceable by—

          2. the covenantee; and
            1. persons claiming through the covenantee.

              1. A covenant in gross binds—

              2. the covenantor; and
                1. the covenantor’s successors in title; and
                  1. persons claiming through the covenantor or the covenantor’s successors in title.

                    1. Subsections (1) and (2) are subject to any contrary intention that appears in the instrument in which the covenant is expressed.

                    2. For the purposes of this section,—

                    3. the covenantor’s successors in title include an occupier for the time being of the burdened land:
                      1. a covenant in gross that requires the covenantor to refrain from doing something may relate to a subject matter not in existence when the covenant is made.

                        307CLegal effect of covenant in gross

                        1. A covenant in gross is binding in equity on—

                        2. every person who becomes the owner of the burdened land,—
                          1. whether by acquisition from the covenantor or from any of the covenantor's successors in title; and
                            1. whether or not for valuable consideration; and
                              1. whether by operation of law or in any other manner; and
                              2. every person who is for the time being the occupier of the burdened land.

                                1. A covenant in gross ceases to be binding on a person referred to in subsection (1) when that person ceases to be the owner or occupier of the burdened land, but without prejudice to that person's liability for breach of the covenant arising before that person ceased to be the owner or occupier of the land.

                                2. Subsections (1) and (2) are subject to any contrary intention that appears in the instrument in which the covenant is expressed.

                                3. The benefit of a covenant in gross is capable of being assigned.

                                4. This section overrides any other rule of law or equity, but is subject to sections 307D and 307E.

                                307DWhether, and to what extent, administrator bound by covenant in gross

                                1. This section applies to an administrator of the estate of a person who was bound, at the time of that person's death, by a covenant in gross.

                                2. The administrator is bound by the covenant—

                                3. only if assets of the estate are available in the administrator's hand for meeting the obligations under the covenant; and
                                  1. if so, only to the extent that they are so available.

                                    307EHow rights under covenant in gross rank in relation to other unregistered interests

                                    1. The rights under a covenant in gross rank, in relation to all other unregistered interests affecting the same land, as if the covenant were an equitable and not a legal interest.

                                    2. The ranking, under subsection (1), of rights under a covenant in gross is subject to the effect of the notation of the covenant, under section 307F, in the register kept under section 9 of the Land Transfer Act 2017.

                                    307FNotation of covenants in gross

                                    1. This section applies to a covenant in gross that burdens land under the Land Transfer Act 2017.

                                    2. The Registrar may note on the record of title created under section 12 of the Land Transfer Act 2017 for the land burdened by a covenant in gross all or any of the following:

                                    3. a covenant to which this section applies:
                                      1. an instrument purporting to affect the operation of a covenant noted under paragraph (a):
                                        1. a modification or revocation of a covenant noted under paragraph (a).

                                          1. A covenant noted under subsection (2) is an interest noted on the register to which section 52(1)(b) of the Land Transfer Act 2017 applies.

                                          2. Notation of a covenant under subsection (2) makes the covenant an interest of the kind specified in subsection (3), but does not in any other way give the covenant any greater operation than it would otherwise have.

                                          3. Covenant, in subsections (3) and (4), includes an instrument purporting to modify the operation, and a modification or revocation, of a covenant noted under subsection (2)(a).