Pg 38

Question 1

What are the two different views on whether or not the element of intent has been met for a real covenant to run with the land?

Answer 1

• common law: intent is only satisfied if the covenant expressly stated it was binding or meant to run with the land
  – modernly: as long as it touches and concerns the property, intent to run is inferred

Question 2

What is a common way for the intent element to be met for a real covenant to run with the land?

Answer 2

If the language refers to “assigns and successors“

Question 3

If you covenant about something that doesn’t yet exist, will it run with the land? I.e.: you covenant to build a fence between your lot and your neighbors’?

Answer 3

Because the object does not yet exist, the covenant only runs if you expressly state that you were covenanting for yourself and assigns.

Question 4

How does a common scheme of development show intent for a real covenant to run with the land?

Answer 4

It shows the original party’s intent for successors in interest and puts subsequent purchasers on notice

Question 5

If you have a development where there was no declaration of covenants that got recorded, what do you need before a court will recognize a common scheme exists?

Answer 5

You need substantially more than 50% of the lots to be transferred subject to restrictions.

Ie: if you own 100 lots and you convey the first 65 with restrictions in the deed for single-family dwellings, each remaining lot has benefited. When lot 66 is conveyed, courts infer from the common scheme that the original parties intended successors in interest in the remaining lots to be able to enforce the benefit against the owner of Lot 66. Courts infer that the grantor intended that other owners in the subdivision would benefit from the restrictions on the lots he sold in the future

Question 6

What is necessary if there has been no declaration of covenants recorded in order for a court to find that a development has a common scheme of development?

Answer 6

You need substantially more than 50% of the lots transferred to be subject to restrictions, and it must be an apparent common scheme to benefit third parties, so it is not available in the earlier stages of a building development.

Plus courts are reluctant to apply it to benefit those that got title before the common scheme developed

Question 7

What is the third-party beneficiary theory in relation to the intent element of a real covenant?

Answer 7

This is from contract law, and it finds that the original parties expressly or impliedly intended to benefit someone other than or in addition to the original promisee.

Ie: developer wants to give a homeowners’ association the right to enforce restrictions.

Drawback: Many courts won’t apply it to benefit parties not yet in existence when the original agreement was made

Question 8

What is involved in the element of a real covenant that requires that the covenant “touch and concern“ the land?

Answer 8

There must be some relationship with the land/sufficiently connected to the land. Some economic impact on the parties’ ownership rights is enough such as enhancing the value of the dominant and decreasing the servient estate’s. The covenant must in some way affect the legal rights of the owners. If the burdens and benefits exist independently of the parties’ ownership, there is no touch and concern and the covenant does not run.

The benefit of the promise must touch and concern the original promisee’s land/benefited land

Question 9

What are some examples of covenants that would be considered to touch and concern the land?

Answer 9

Covenant to build on the land, not to plow, pay to use the land (rent it), restricting business activity, purchase options on a lease, etc.

Question 10

Would a covenant to paint someone’s portrait be considered to touch and concern land?

Answer 10

No

Question 11

Would a covenant to buy insurance be considered to touch and concern the land?

Answer 11

There is a split on this. The covenant must be coupled with a covenant to invest the proceeds in restoring the damaged premises in order for it to run. This is because the promise must benefit the land at the time the promise was made and the promisee must have an interest in the property at the time the promise was made so that performing it would enhance its value or use

Question 12

If you sell seafront property with a clause that the new owner must maintain a seawall in order to protect it from hurricanes, would that be considered to touch and concern the land?

Answer 12

No because you have no interest in the property at the time of the promise and it doesn’t enhance the value or use of the land

Question 13

If you own a mall and you rent out the first space to a store with a covenant that they will only sell clothes and you put them in the middle of the mall so that customers must walk past all the other stores to get to it, does that touch and concern the land?

Answer 13

Yes because at the time of the promise you had an interest in the other parts of the mall and the tenant would enhance the value or use of those other spots to be rented out

Question 14

What are the three different approaches in order for a covenant to be considered to touch and concern the land?

Answer 14

– it must affect the nature, quality, or value of the land or its use
– it must increase or decrease the promissor’s or the premisee’s legal relations to the land. It touches and concerns the servient estate if it reduces use and enjoyment of the land, and the dominant estate if it enhances use and enjoyment of the land
– the promise must make ownership more or less valuable

Question 15

Do all covenants have both a burden and a benefit?

Answer 15

No, covenants can have a burden and a benefit, or could only have one or the other.

Question 16

A burden of a covenant can only be performed by whom?

Answer 16

The owner or the possessor of the burdened land that the covenant touches and concerns

Question 17

Who can enjoy the benefits of a covenant?

Answer 17

They can be enjoyed by the current owner or the possessor of the benefitted land that the covenant touches and concerns

Question 18

What land must be burdened in order for a covenant to touch and concern the land?

Answer 18

The covenantor’s land

Question 19

If you covenant with B not to sell liquor on the land because B hates alcohol, does that burden touch and concern the land and does the benefit touch and concern the land?

Answer 19

• burden: yes because it deprives you of a use

- benefit: no because it doesn’t touch and concern B’s land

Question 20

If you covenant to water B’s land every day, do the burden and benefit both that touch and concern the land?

Answer 20

• burden: no, because it can be done whether you own the property or not
  – benefit: yes because it benefits the land and not B personally

Question 21

What are the two different approaches for a covenant’s burden to run with the land?

Answer 21

– Liberal standard: it runs if it touches and concerns the Covenantor’s land even if it doesn’t benefit the covenantee’s land
– restrictive rule: it runs only if both the burden and the benefit touch and concern the land

Question 22

What is required under the benefit needing to touch and concern the land in order for a covenant to run with the land?

Answer 22

The covenant must benefit the covenantee’s land or a third person in order for it to touch and concern the land

Question 23

What is required in order for a benefit to run with the land when a covenant has been made?

Answer 23

The benefit will run even if the burden doesn’t touch and concern the land because the running doesn’t hamper the benefitted land’s alienability or utility

Question 24

If you covenant to water trees on B’s land, does that run with the land?

Answer 24

Yes because the benefit touches and concerns the land, so it runs, even though the burden doesn’t affect your land

Question 25

Is it possible for a covenantee to pay more money to be a substitute for performing an act that touches and concerns the land, and therefore the covenant will run with the land?

Answer 25

Yes

Question 26

If you covenant in a private subdivision to pay fees for maintenance of common areas, can that be a substitute for a covenant by the lot owner to do it himself, and count as touching and concerning the land?

Answer 26

Yes

Question 27

What is required for the notice element in a real covenant in order for the covenant to run with the land?

Answer 27

The requirement for a covenant to run is that the person had notice of the information that he would have discovered from a diligent search done by a reasonably prudent person under the circumstances.

The covenant’s BURDEN is not binding on BFPs. This means that the new owner of the servient estate must take the land with notice of the restriction at the time he took ownership of the property. This can be actual, constructive, or inquiry notice.

Note: the BENEFIT can still be enforced even if the owner of the dominant estate did not take with notice

Question 28

What is the difference between actual knowledge, actual notice, constructive notice, and inquiry notice for the notice element of a covenant?

Answer 28

– actual knowledge: person knew about the covenant
– actual notice: got information about the existence of the restriction from someone else
– constructive notice: the restriction was recorded in public records
– inquiry notice: something like a common scheme of development or surrounding circumstances put the person on inquiry

Question 29

If the public records would not have revealed an instrument because it wasn’t in the deed in the chain of title or some other problem, is the buyer held to have had constructive notice of a covenant?

Answer 29

No, so he would then take the property free of restrictions because those restrictions would not run with the land

Question 30

What are the three types of privity of estate?

Answer 30

– mutual privity
– vertical privity
– horizontal privity

Question 31

What is mutual privity?

Answer 31

The covenanting parties both need interests in the same land. This is rarely required today

Question 32

What is vertical privity?

Answer 32

Privity between one or both covenanting parties and remote parties sought to be benefitted or burdened. This is the relationship between the promisor and his successors or the promisee and his successors

Focus on the chain of conveyance of the benefitted and burdened lands. There must be an unbroken chain from the original covenantor to the current owner of the burdened and benefitted land.