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It will therefore bind successors-in-title of A if the option has not been exercised yet. In order to create such an interest, the normal rules for the creation of a contract to purchase land need to be adhered to (Law of Property (Miscellaneous Provisions) Act, s. 2). A transfer to a third party in breach of the terms of the option makes A liable in damages,24 and such a transfer may be restrained by injunction.25

In repect of the maintenance obligation, a third party interested in the surrounding land alone (as opposed to also the development site, where leasehold covenants arise)26 will not be burdened with the duty to maintain gardens on surrounding land. This is because, outside the leasehold context, the notion of privity does not permit a third party to be burdened by positive covenants (or other agreements) he/she was not privy to, still less to let their burden pass with the land.27 English law does recognise that the restrictive covenants (which prevent successors-in-title from doing things) may so run, however.28 In the circumstances, therefore, B cannot directly enforce the obligation against A.

B can, however, hold A to be continuingly liable for the failure to comply with the positive obligation (Law of Property Act, s. 79). If A has been sensible, he will have entered into an indemnity agreement with the third party whereby the third party covers A’s losses. This can amount to an indirect method of enforcement of covenants, albeit of a highly cumbersome and unsatisfactory nature. There are other methods for enforcing positive obligations of this kind, though these are not relevant in the present context.29

France

In order to determine to what degree B’s option can be enforced against C, one must distinguish whether A granted a unilateral offer to purchase or a right of first refusal to B. These are examples of mechanisms used in practice, for example, in the case of a lease for construction.

The Cour de cassation30 had to decide on the effect of including a unilateral offer to purchase in a heritable building lease granted

24Midland Bank Trust Co. v. Green [1980] Ch 590 611.

25Churchman v. Lampon [1990] 1 EGLR 211.

26As to which, see the Landlord and Tenant (Covenants) Act 1995.

27See Rhone v. Stephens [1994] AC 310. 28 See Tulk v. Moxhay (1848) 2 Ph. 774.

29See Harpum, Megarry and WadeÕs Property, paras. 16–019 ff.

30Civ. 3, 15 Dec. 1993; Bull. civ. III, no. 174.

to B.31 The court held that if the landowner-promisor who is bound to allow the purchase rescinds the contract before the option is exercised, the beneficiary cannot claim specific performance of the offer to purchase. Hence the sale to C is valid, despite the option to purchase granted to B. B can, however, raise either an action on fraud against the third party purchaser or an action based on fault on his/her part based on actual knowledge that the property was subject to a unilateral offer to purchase.32 In such circumstances, the trial judge may award a remedy which seems adequate in the circumstances to annul the sale that is challenged.33

Where a right of first refusal is granted to the developer, the Cour de cassation reversed the previous case law on the subject34 and allows the holder of the right of first refusal the right to annul the contract concluded with a third party in defiance of his/her rights and allows the holder to be put in the place of the purchaser if he/she can prove that the purchaser acted fraudulently. Proof of fraud consists in establishing that the third party purchaser knew of the first refusal agreement and of the intention of the beneficiary to avail himself/herself of the option. Although previous case law allowed this remedy, it required proof of a fraudulent collusion between the third party and the previous owner before the holder of the option could be put in the place of the acquirer. It must be added that the notary concerned also incurs civil liability where he/she knew of the existence of the right of first refusal, but does not protect the right of the beneficiary if need be by refusing to execute the notarial deed of sale which violates the right of first refusal of the developer.35

Germany

If the option to purchase is constituted as a personal right in the contract between A and B (Civil Code, § 463), it will not be enforceable against C. However, it is possible to create a real right enforceable against third parties in the form of a right of pre-emption (Vorkaufsrecht) (Civil Code, §§ 1094 ff.). The right of pre-emption must be registered in the Land

31It is advisable that the promise of purchase should not be exercisable before a period of eighteen years has expired.

32Civ. 3, 8 July 1975, Gaz. Pal. 1975. 2. 781.

33Civ. 1, 12 June 1954, JCP 1954 vol. 2, 8225.

34Cass. Ch. Mixte, 26 May 2006, Bull. civ., no. 4; BICC 1 Aug. 2006.

35Civ. 1, 11 July 2006; Bull. civ. I, no. 389.

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Register (Grundbuch) in order to be validly created as a real right. It entitles the holder (B) to assume the rights and obligations of C as set out in any subsequent sale and transfer agreement entered into between A and a third party (C). Consequently, B does not have the right to purchase the property at a fixed price. Instead, the price is dependent on the conditions agreed upon between A and C.

Alternatively, A can agree to grant B a right to purchase the property (Ankaufsrecht). This is a mere contractual right which entitles B to purchase the property at a certain price. Since it is not one of the recognised limited real rights in German law, a right to purchase (Ankaufsrecht) cannot be registered in the Land Register. However, it can be made enforceable against third parties by registering a priority notice (Vormerkung) in the Land Register (Civil Code, § 883). Although technically the registration of the priority notice does not create a real right, it protects B’s right to purchase the property from A vis-a`-vis third parties (Civil Code, §§ 883(2) and 888).

By virtue of the Regulations on Hereditary Building Leases (§ 2 no. 1), the contract to create a hereditary building right can contain maintenance obligations relating to the buildings which will be enforceable against the successors-in-title of the holder (B). Maintenance obligations relating to the land surrounding the structure contained in the contract will be effective only among the parties themselves.36

It is debatable whether A’s duty to maintain the gardens surrounding the development can become enforceable if contained in a contract creating a personal (or praedial) servitude supplementing the

Erbbaurecht. German law has adopted the maxim servitus in faciendo consistere nequit, which means that, in principle, a servitude cannot impose a positive duty on the owner of the servient land. It may only entitle its holder to do something in respect of the servient land or compel the owner of the servient land to refrain from doing something on his/her land (Civil Code, § 1018). Certain exceptions to this rule have, however, been recognised. A servitude imposing a positive duty on the owner of the servient land may be established if such a right is ancillary to a registrable right or duty.37 It seems therefore that a servitude obliging A (and his/her successors) to maintain the gardens surrounding the structure will only be registrable if it were ancillary to a registrable hereditary building right.

36von Oefele and Winkler, Handbuch, no. 4.49.

37Scho¨ ner and Sto¨ ber, Grundbuchrecht, nos. 1133 ff.

In practice, if A has bound himself/herself and his/her successors to maintain the gardens in his/her contract with B, A will only sell the land to C subject to C’s agreement to assume all obligations in that regard. Otherwise, A can be liable for damages suffered by B for breach of contract.

Greece

Under Greek Law, B’s option to purchase gives rise to a personal right only.38 Such an option is therefore unenforceable against C. B will, however, have a claim for compensation against A since the fulfillment of the option, namely the performance of the contract embodying the option, will no longer be possible.39

A’s maintenance obligations in respect of the gardens surrounding the development may not be included in the title conditions of a servitude burdening the land. This is in accordance with the Romanist tradition that a servitude may not involve affirmative duties for the owner of the servient property (servitus in faciendo consistere nequit).40 Such duties may only be undertaken by virtue of personal obligations,41 which are not enforceable against third parties. Consequently, the third party to whom the land is sold is not obliged to maintain the gardens. Again, A will be liable for damages suffered by B on account of breach of contract. However, if the mechanism described above42 is followed and the recorded deeds include such a term, all successors of the initial contracting parties are bound by such an agreement.

Hungary

If the option to purchase is registered in the Land Register, it can be invoked against anyone who subsequently acquires ownership or any other rights over the property (Civil Code, §§ 375(4) and 374(5) in conjunction with art. 373(3)). An option can, however, only be established for a maximum period of five years.

38 Georgiades, General Principles, p. 412. 39 Georgiades, Option, pp. 173, 178.

40See also Banakas, in Georgiades and Stathopoulos, GCC, Collective Analysis, art. 1188, no. 15 (207).

41Yiannopoulos, in Kerameus and Kozyris, Introduction to Greek Law, p. 163.

42See Case 10.