Covenants that Run with the Land/Real Covenants

Question 1

Real Covenants: Defined

Answer 1

1. Promises, Ks, and Covenants

Question 2

What is a covenant?

Answer 2

A promise that creates a benefit and burden. AKA a K.

K law: Original parties to promise are bound to perform.

Question 3

Covenant: Conceptually

Answer 3

A covenant that binds subsequent owners of the land even though the subsequent owners are not parties to the original promise.

Typically in residential developers.

Question 4

Common Law Elements - There are five

Answer 4

1. Intent that covenant runs with the land.
2. Covenant “touches and concerns” the land.
3. Horizontal Privity
4. Vertical Privity
5. In writing

Question 5

Common Law Elements: Intent

Answer 5

1. Language which explicitly states that covenant and restricts “shall be binding on and run with” the real estate; AND
2. Language in the document indicating that it shall be binding upon all heirs, assigns, and successors-in-interest of the parties of the original covenant.

Question 6

Common Law Elements: Touches and Concerns

Answer 6

1. Satisfies when the covenant calls a party to do, or refrain from doing, a physical act on the land.
2. A logical connection to the use and enjoyment of the land.

Question 7

Common Law Elements: Horizontal Privity

Answer 7

1. Requirement that the original parties of the covenant made their promise in connection with a conveyance of an interest in land.
2. The conveyance that typically support horizontal privity are grantor-grantee, mortgagor-mortgagee, and landlord-tenant.

Question 8

Common Law Elements: Vertical Privity

Answer 8

1. There must be a conveyance of the full interest to the subsequent owner (title via AP wouldn’t count); AND
2. There must be notice in the deed of the restriction down the vertical “leg”.
   a. Example: The deed transfers FSA “subject to all covenants, easements, and other restrictions.”

Question 9

Common Law Elements: In writing

Answer 9

A real covenant is an interest in land. Therefore the SoFs would apply.

Question 10

Black Letter Rule: Sonoma Development Inc. Pt. 1

Answer 10

The court is not willing to say that, in every situation, only one document can be examined in order to determine if horizontal privity existed b/w the original parties.

Question 11

Black Letter Rule: Sonoma Development Inc. Pt. 2

Answer 11

Horizontal privity exists when a restrictive covenant is made as part of a transaction that also includes the transfer of an interest in land that is either benefitted or burdened by the covenant.

Question 12

Black Letter Rule: Sonoma Development Inc. Pt. 3 (Transaction definition)

Answer 12

An act or agreement, or several acts or agreements having some connection with each other, in which more than one person is concerned and by which the legal relations of such persons b/w themselves are altered.