Covenants

Question 1

What is the definition of covenant?

Answer 1

a legal right restricting an owner’s conduct related to use and enjoyment of the owner’s land

1) must have notice
2) Runs with title and not the land

Question 2

What is a Covenant in general?

Answer 2

1) They can be real or implied
1a) real can be contracts or equitable servitudes
1b) Implied Covenants can be mutual servitudes, or implied mutual recirpocal servicitues
2) They can be affirmative or restrictive

Question 3

Define Restrictive and Affirmative Covenants

Answer 3

1) Both types of covenants create burdens and benefits
2) Restrictive Covenant: restricts an owners use or enjoyment…for residential use only
3) Affirmative Covenants: obligates owners to perform certain duties for the benefit of their neighbors

Question 4

Who undertakes the burdens and benefits created by covenants

Answer 4

1) Burden is undertaken by the covenentor and the promisor

2) Benefit is undertaken by the promisee or covenantee

Question 5

What is an Equitable Servitude

Answer 5

legal right based on a promise of a real covenant governing an owner’s conduct related to use or enjoyment of the owner’s land, enforceable in equity (only by injunctive relief) despite some problem with privity

1) Affirmative covenants: owner’s duty to act
2) Restrictive: restricts owner’s use or enjoyment

3) for injunctions to apply in equity courts….need notice

Question 6

How does the Doctrine of Succession apply to Covenants?

Answer 6

1) Unlike easements where benefits and burdens run with land, Covenants run with title
2) Benefits and burdens evaluated separately

3) Covenants are subject to stricter requirements

Question 7

How does a Benefit run in a Covenant?

Answer 7

Need Three Things, but notice is not required

i. Intent to run– can be express or implied (touch and concern….language)
ii. Touch and concerns the land–enhances use or market value (strong presumption of intent, HOA now included)
iii. Vertical privity (will devise, sale, gift, heir)

Question 8

How does a Burden run

Answer 8

Burdens require 5 things and is stricter
1) Intent to run

2) Touch and Concern the land
3) Vertical privity–>
4) Horizontal Privity (p794)
5) Notice by later owner at time they take title (actual, record/constructive, inquiry)

Question 9

What is vertical Privity?

Answer 9

1) Vertical privity is a relationship between original promisor and promisee
2) Wills, Sales, Gifts, Inheritance all establish vertical privity

Question 10

What is Horizontal Privity

Answer 10

Horizontal Privity is the relationship between the original covenanting parties and requires notice

1) At time created, Grantor and Grantee (O and A) had a landlord/tenant relationship in the burdened tract
2) At the time created, O and A owned an interest in the burdened tract (i.e. O- Fee simple and A=easement)
3) Creation of a covenant accompanied a conveyance of an interest in the burdened land (Estate and Cov must be explicitly contained in the same instrument)

Question 11

The Creation of Covenants: General Rules

Answer 11

1) Expressly by dead conveying interest in land
* this is not like an easement which be created by independent direct dead
* Horiz. Priv covenant must accompany the conveyance of the interest in the land

2) General
* burdens of covenants not extended by implication or construction
* Construe to greatest free use

3) Exception=implied mutual reciprocal servitudes

Question 12

What is Uniform Building Plan

Answer 12

A UBP is a common scheme or plan of development created by a common grantor by imposition of uniform covenants on lots sold therin

Question 13

Mutual Reciprocal Servitudes in a UBP

Answer 13

Courts will allow grantees therein to enforce each other’s covenants as mutual reciprocal servitude despite a problem with vertical privity to ensure the mutuality of the uniform benefits and burdens intended

Rule—A common grantor establishes must have an approved and recorded plan on file, shows up in chain of title search; later owners must have notice

Question 14

How is a UBP created (4)

Answer 14

i. Specification in each deed
ii. Incorporation by reference to each deed
iii. Master Deed
iv. Mutual covenants in 1st grantee’s deed

Question 15

When can a purchaser rely on Developer’s intent to create a UBP?

Answer 15

1. Covenant not implied based on developers intent and oral representations…Riley v. Bear Creek
2. Recording of Plat Map and Dec of Covenants and Restrictions to create UBP
3. Mutual covenants in 1st Grantee’s deed ….A is initial purchaser and has covenants that burden B’s lot. When B buys his lot he can imply the same covenants A had

4.UBP intended to burden all lots in UBP

Question 16

UBP and Implied mutual reciprocal Servitude

Answer 16

Prior purchasers of lots may be able to 1) get the Court may be able to get the court to imply a covenant against later purchasers if it seems that they are implied
(all white fences and new guy builds a wrought iron fence)

2) Typically, only against a later-conveyed unresrestcited lot within an established UBP
3) only do it with notice (constructive)

Question 17

What is the Zeigler Rule for Implied Mutual Reciprocal Servitudes

Answer 17

Rule: under established UBP, Court may imply existence of a covenant against a later grantee with notice (despite fact there was never a lawfully created buden on that grantee’s land) to ensure mutuality of burdens and benfits

Question 18

How does Covenant Authority apply to HOA

Answer 18

1) UBP Covenants Control the scope of authority of an OA to regulate uses of the “common areas private lots and conduct withing a dwelling”
2) Covenants generally operate like the OA’s Constitutions
3) Must be clear and precise
4) must not violate state law or zoning laws

Question 19

When is an HOA rule invalid?

Answer 19

i. Rule is ulta-vires–> no cov. Authority to adopt

ii. Rule is arbitrary and capricious—not reasonably related to promoting general welfare of UBP community
- -> no pets in humanlike clothing

Question 20

When is Validity of HOA’s Decisions in Applying the Rule an abuse of discretion?

Answer 20

1) Did not apply or did not reasonably interpret standard of existing rule (pet stinks)
2) No reasonable factual basis to support decision for rule (no dangerous pets)

Question 21

Common Law Modifications and Termination of a UBP

Answer 21

CL applies unless the covenant clearly and expressly provides otherwise

a. Must be 100% of UBP units (unless contracted otherwise)
b. Changes must be uniform
c. HOA/Dev waiver and release decision in residential UBP
i. This is a good faith implication
d. HOA cannot prohibit a preexisting lawful use (residential UBP and Commercial)

Question 22

How many Defenses or Terminations to a covenant can you name?

Hint: there are twelve

Answer 22

1) Public Policy Veto
2) Not breached (interpretive d)
3) Terminated by express terms)
4) Release due to SOF
5) Unitiy of Title
6) Benefit/Burden didn’t run
7) Unclean Hands (Can’t do it if you are violated)
8) Original Purpose not furthered
9) Prescriptions barred by SoL
10) estoppel
11) Laches (bad faith unreasonable delay)
12) Abandonment (clear and unambiguous)

Question 23

What is a Public Policy Veto/How does it work?

Answer 23

When courts refuse to enforce servitude…two explanations

1. Pursuant to public policy they will not enforce 1) discriminatory covenants 2) unduly restrained alienation 3) restrained trade
2. Refusal based on privity failure (equitable balance)

Question 24

When is a covenant struck down because its Original Purpose would not be furthered?

Answer 24

1) No substantial Benefit, defendant must show one
2) Changed Condition (from original conditions)
3) Lack of Mutuality within the UBP

Question 25

What is the relationship between Zoning Laws and Covenants

Answer 25

1) Zoning doesn’t preempt use covenants because a covenant can comply with both UBP and Zoning
2) Zoning changes outside the UBP don’t frustrate a purpose
3) Courts don’t balance interests for injunctions, zoning laws or UBP take precedent and we do not balance interests