Guideline

Easements and Covenants

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The purpose of this guideline is to clarify when the Duties Act 2001, particularly Chapter 2, applies to easements, restrictive covenants, notable interests and agreements under Part 5 of the Land Use Planning and Approvals Act 1993.

Easements

An easement (including what is known as an electricity wayleave easement) is ‘a right enjoyed by the owner of land over the lands of another’ (Osborn's Concise Law Dictionary (7th edn), Sweet & Maxwell, London, 1983, p. 127).

Therefore it is an interest in land. An interest in land is dutiable property.

Any transaction that amounts to –

a transfer of an easement whether conditional or not; or
a grant or surrender of an easement; or
a vesting of an easement by or as a consequence of a statute or court order;

is a dutiable transaction.

The only exception to the above is where an easement is created by and contained within a Schedule of Easements attached to a Sealed Plan.

Where an easement is transferred (other than as part of a transfer of the land itself), granted or vested, the duty payable is to be assessed on the dutiable value of the easement.

Where no consideration is provided, the value in most cases will be nominal. However, each easement will need to be assessed on its own circumstances.

Restrictive Covenants and Covenants

A covenant (including a restrictive covenant over land) is an agreement creating an obligation. Where a covenant is attached to land it is an interest in land and therefore it is dutiable property.

Any transaction that amounts to –

a transfer of a covenant; whether conditional or not; or
a grant or surrender of a covenant; or
a vesting of a covenant by or as a consequence of a statute or court order;

is a dutiable transaction.

Where a covenant is transferred (other than as part of a transfer of the land itself), granted or vested, the duty payable is to be assessed on the dutiable value. Where no consideration is provided, the value in most cases will be nominal. However, each easement will need to be assessed on its own circumstances.

Agreements pursuant to part 5 of the Land Use Planning and Approvals Act 1993

Agreements pursuant to part 5 of the Land Use Planning and Approvals Act 1993 are exempt transactions from 1 July 2002.

For More Information

contact the SRO.