Restrictive Covenants Flashcards
What is a covenant? How is is different from an easement?
A covenant is a written promise to do or not do something related to land (e.g., to maintain a fence, or to not build a multifamily dwelling).
It is unlike an easement because it is not the grant of a property interest. Instead, it is a contractual limitation or promise regarding land.
Real covenants are normally found in deeds and when certain requirements are met, they run with the land at law, which means that subsequent owners may enforce or be burdened by the covenants.
What is a negative (or restrictive) covenant?
A negative or restrictive covenant is a promise to refrain from doing something related to land.
What is an affirmative covenant?
An affirmative covenant is a promise to do something related to land.
The same set of facts could seem to give rise to either a covenant or an equitable servitude. How can you tell the difference?
If the plaintiff wants money damages, construe the promise as a covenant.
If the plaintiff wants an injunction, construe the promise as an equitable servitude.
In covenant parlance, one tract is _______ by the promise and another is _______.
(1) burdened
(2) benefited
If the following requirements are met, any successor in interest to an estate BURDENED by a covenant will be bound by the covenant as if they themselves had expressly agreed to it:
“W I T H N”:
(1) Writing: the original promise (between A and B) must have been in writing
(2) Intent: the original covenanting parties (A and B) must have intended that the covenant would run. This intent may be inferred from circumstances surrounding the creation of the covenant, but is usually found in the language of the conveyance itself. Courts are generous in finding the requisite intent.
(3) Touch and concern: the promise must affect the parties’ legal relations as landowners and not simply as members of the community at large.
(4) Horizontal and vertical privity: both horizontal and vertical privity are required
(5) Notice: The successor must have had notice of the promise when she took. Under modern recording acts, to be bound by a covenant, a subsequent purchaser for value must have had actual, inquiry, or record notice of the covenant at the time of purchase.
In the context of the running of a covenant that burdens an estate, what does it mean for the covenant (both restrictive and affirmative) to “touch and concern” the land?
Restrictive covenants touch and concern the land if they restrict the burdened parcel owner in her use of that parcel of land.
Affirmative covenants touch and concern the land if they require the holder of the servient estate to do something that increases her obligations in connection with the land.
Covenants to pay money to be used in connection with the land (e.g., homeowners’ association fees) and covenants not to compete DO touch and concern the land.
In the context of the running of a covenant that burdens an estate, what is “horizontal privity”?
Horizontal privity refers to the nexus between the original promising parties (A and B). It requires that they be in succession of estate, meaning that they were in a grantor-grantee or landlord-tenant or mortgagor-mortgagee relationship when the covenant was created.
In other words, at the time the promisor entered into the covenant with the promisee, the two must have shared some interest in the land independent of the covenant.
Horizontal privity is difficult to establish. Its absence is the reason by many burdens will not run.
In the context of the running of a covenant that burdens an estate, what is “vertical privity”?
Vertical privity refers to the nexus between the successor in interest (A-1) and the originally covenanting party (A). It simply requires some non-hostile nexus, such as contract, devise, or descent.
The only time vertical privity will be absent is when the successor acquired her interest through adverse possession.
If the following requirements are met, any successor in interest to an estate BENEFITED by a covenant will be bound by the covenant as if they themselves had expressly agreed to it:
“W I T V”:
(1) Writing: the original promise must have been in writing
(2) Intent: the originally covenanting parties (A and B) must have intended that the benefit would run, meaning they intended that successors in interest to the promisee would be able to enforce the covenant
(3) Touch and concern: the benefit touches and concerns the land if the promised performance benefits the promisee and her successors in their use and enjoyment of the benefited land (i.e., the promise must affect the parties as landowners)
(4) Vertical privity: there must be a non-hostile nexus between the original promisee (B) and the successor in interest (B-1)
What is the remedy for breach of a real covenant?
A breach of a real covenant generally is remedied by an award of money damages, collectible from the defendant’s general assets.
If an injunction is sought, the promise may be enforced as an equitable servitude.
How may a covenant be terminated?
A covenant may be terminated by:
(1) a written release
(2) the merger of the benefited and burdened estates
(3) the condemnation of the burdened property
What is an equitable servitude?
An equitable servitude is a promise that equity will enforce against successors of the burdened land regardless of whether it runs with the land at law, unless the successor is a bona fide purchaser (i.e., a subsequent purchaser for value without notice of the covenant).
What is the judicial remedy available for breach of an equitable servitude?
Injunction
How is an equitable servitude created?
Equitable servitudes are created by promises contained in a writing that satisfies the Statute of Frauds.
To create an equitable servitude that will bind successors: (“W I T N E S”)
(1) Writing: generally, but not always, the original promise was in writing (the common scheme doctrine is an exception)
(2) Intent: the original parties intended that the promise would be enforceable by and against successors
(3) Touch and concern: the promise affects the parties as landowners
(4) Notice: subsequent purchasers of land burdened by the covenant had actual, inquiry, or record notice of the covenant when they acquired the land
(5) ES: equitable servitudes