5. Covenants

Question 1

What is a ‘Covenant that runs with the land’?

Answer 1

A promise that attaches to land where the covenantor promises to do or refrain from doing something on the land.

Question 2

What happens when a covenant that runs with the land is breached?

Answer 2

Breach of covenants lead to award in damages.

Question 3

What five elements must be met for a covenant to run with the land?

Answer 3

1. A Writing that satisfies the Statute of Frauds
2. Parties intent for the covenant to run
3. Horizontal or Vertical privity
4. Touch and concern
5. Notice

Question 4

How do parties show intent for a covenant to run?

Answer 4

Parties must intend that successors in interest be bound by the terms of the covenant, inferred from circumstances or actual language.

This intent can be inferred from:
i.) circumstances surrounding the creation of the covenant; or
ii.) actual language in the conveyance itself.

Question 5

When is there no intent to involve the land for a covenant to run?

Answer 5

When the deed is personal or lacks an express statement in the deed.

Question 6

Does a purchaser of land subject to a covenant take the land burdened by the covenant?

Answer 6

Yes, regardless of whether the purchaser had notice of the covenant prior to purchasing.

Question 7

What happens if the covenant is not recorded in a recording statute jurisdiction?

Answer 7

A bona fide purchaser who has no notice of the covenant and records their own deed will take possession of the land free of the covenant.

Question 8

What is privity?

Answer 8

The mutual interest of two or more people in the same property at the time such property is transferred.

Question 9

What is horizontal privity?

Answer 9

The relationship between the original parties to the covenant at the time that they entered into the covenant.

Question 10

When is horizontal privity satisfied?

Answer 10

By a conveyance of land between the covenantee and covenantor, occurring by the same deed that includes the covenant.

Question 11

What parties are considered to be in horizontal privity?

Answer 11

• Landlord and tenant
• Grantor and grantee
• One party holds an easement right in the other party’s land

Question 12

When is there no horizontal privity between parties?

Answer 12

When neighboring landowners have no common ownership or no legal relationship as to the same premises.

Question 13

What is vertical privity?

Answer 13

The relationship between an original party to a running covenant and the successor in interest to the original party.

Question 14

When is vertical privity satisfied?

Answer 14

When the successor ‘stepped into the shoes of’ the original party by taking the entire interest held by the original party.

Question 15

When is vertical privity not satisfied?

Answer 15

When an original party sublets their interest to a successor or when land is acquired by adverse possession.

Question 16

What is ‘Touch and Concern’ of the land?

Answer 16

The covenant must have an effect that makes the land itself more useful or valuable to the benefitted party.

Question 17

What are the requirements for touch and concern?

Answer 17

Both the benefit and burden had to touch for either to run with the land.

Question 18

When does no touch and concern exist?

Answer 18

• The parties are individuals without land ownership
• A covenant’s benefit or burden is personal and not linked to a specific piece of land

Question 19

What is notice for covenants that run with the land?

Answer 19

The transferee must either know or should have known that the covenant existed at the time they took possession of the servient estate.

Question 20

What are the three types of notice?

Answer 20

• Actual Notice (what you know)
• Constructive Notice (recordation)
• Inquiry Notice (information that leads to further inquiry)

Question 21

When are restrictive covenants binding?

Answer 21

When placed on property at the time it is conveyed.

A burden CANNOT be attached to a lot at a later time by someone who has NO interest in the lot.

Question 22

What is an equitable servitude?

Answer 22

A promise concerning the use of land that benefits and burdens the original parties to the promise, as well as their successors.

Question 23

An equitable servitude in a deed is only enforceable where a party can establish:

Answer 23

(i) intent for the restriction to be enforceable by subsequent grantees;
(ii) that the subsequent grantees had notice of the servitude; and
(iii) that the restriction touches and concerns the land

Question 24

What three elements must be established for an equitable servitude to run with the land?

Answer 24

• Intent for it to run with the land
• Actual, inquiry or record notice
• The covenant ‘touches and concerns’ the land

Question 25

True or False: An equitable servitude will not end on the death of the promisor absent a provision which so provides.

Answer 25

True.

Question 26

What if a plaintiff cannot show that the covenant was embodied in a writing?

Answer 26

If the plaintiff cannot show that the covenant was embodied in a writing, the plaintiff may prove the covenant through part performance or estoppel.

Question 27

What if a plaintiff cannot show intent in a writing for the covenant to run?

Answer 27

If the plaintiff cannot show intent in a writing for the covenant to run, he may nevertheless establish intent by showing a common scheme.

Question 28

What is a common scheme?

Answer 28

Typically exists in a subdivision where enough lots have the same covenant, binding all lots, including those without written restriction.

Question 29

What are the four factors that may show a common scheme?

Answer 29

• A large percentage of lots expressly burdened
• Oral representations to buyers
• Statements in written advertisements, sales brochures, or maps
• Recorded plat maps or declarations

Question 30

When is a burden imposed on lots with a common scheme?

Answer 30

The burden will be imposed on lots even in the absence of an express restriction in the deed to those lots if a common scheme was evident at the time of conveyance of those lots, mostly by notice.

Question 31

When is a burden not imposed on a lot with a common scheme?

Answer 31

If there is no explicit restriction mentioned in the deed, a lot that was conveyed BEFORE the restriction was added will NOT be subject to the burden of that restriction.

Question 32

Can an original subdivider enforce a benefit on a lot?

Answer 32

The original subdivider may enforce a benefit unless he has sold all the property.

Question 33

Can a suit be brought by a purchaser of a lot conveyed after the lot with the express restriction?

Answer 33

If a common scheme is present, suit may be brought by the purchaser of a lot conveyed after the lot with the express restriction.

Question 34

What is an Implied Reciprocal Servitude?

Answer 34

Implied Reciprocal Servitude is created when someone owns multiple adjacent lots and sells one of them with certain restrictions that benefit the remaining lots, the restrictions apply to all the lots, and the owner of the lots must follow the same restrictions as the buyer of the sold lot.

Question 35

What are five ways covenants can be terminated?

Answer 35

• Written release
• Merger of the dominant and servient estates
• Abandonment
• Estoppel
• Changed circumstances

Question 36

Can property owners associations enforce restrictive covenants?

Answer 36

Yes, typically they have standing to enforce a restrictive covenant.

Question 37

What is the primary test for determining the validity of a rule adopted by a property owners association?

Answer 37

Whether the rule is reasonably related to furthering a legitimate purpose of the association.

Question 38

To ensure compliance with proper restraints, a board may:

Answer 38

(i) impose fines, penalties, and late fees;
(ii) withdraw privileges to use common recreational or social facilities;
(iii) require prior submission of plans for projects to ensure compliance with existing restrictions;
(iv) conduct reasonable inspections of property for violations, with a reasonable belief that such violation exists; AND/OR
(v) deny voting privileges or board positions