Restrictive Covenants Flashcards

1
Q

What is a covenant? How is is different from an easement?

A

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.

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2
Q

What is a negative (or restrictive) covenant?

A

A negative or restrictive covenant is a promise to refrain from doing something related to land.

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3
Q

What is an affirmative covenant?

A

An affirmative covenant is a promise to do something related to land.

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4
Q

The same set of facts could seem to give rise to either a covenant or an equitable servitude. How can you tell the difference?

A

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.

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5
Q

In covenant parlance, one tract is _______ by the promise and another is _______.

A

(1) burdened

(2) benefited

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6
Q

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:

A

“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.

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7
Q

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?

A

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.

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8
Q

In the context of the running of a covenant that burdens an estate, what is “horizontal privity”?

A

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.

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9
Q

In the context of the running of a covenant that burdens an estate, what is “vertical privity”?

A

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.

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10
Q

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:

A

“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)

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11
Q

What is the remedy for breach of a real covenant?

A

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.

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12
Q

How may a covenant be terminated?

A

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

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13
Q

What is an equitable servitude?

A

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).

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14
Q

What is the judicial remedy available for breach of an equitable servitude?

A

Injunction

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15
Q

How is an equitable servitude created?

A

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

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16
Q

Is privity of estate required for an equitable servitude to be enforceable?

A

No. Neither horizontal nor vertical privity are required to create an equitable servitude, as contrasted with covenants.

17
Q

What is the general or common scheme doctrine?

A

Under the common scheme doctrine, the court will imply a reciprocal negative servitude (i.e., an implied equitable servitude) to hold an unrestricted lot holder to a promise.

Thus, if a developer subdivides land, and some deeds contain restrictive covenants while others do not, the restrictive covenants will be binding on ALL parcels provided there was a common scheme of development and notice of the covenants.

18
Q

What are the two elements of the general or common scheme doctrine?

A

(1) When the sales began, the subdivider (A) had a general scheme of residential development which included the defendant’s lot (the scheme may be evidenced by: a recorded plat, a general pattern of restrictions, or oral representations to early buyers); AND
(2) The defendant lot-holder (B) had notice of the promise contained in those prior deeds when it took

NOTE: If the scheme arises AFTER some lots are sold, no implied servitude can arise with respect to the lots already sold without express covenants.

19
Q

For the three forms of notice, remember A I R:

A

(A) Actual notice, meaning the defendant had literal knowledge of the promises contained in the prior deeds

(I) Inquiry notice, meaning the neighborhood seems to conform to the common restriction (it’s the “lay of the land”)

(R) Record notice, meaning the form of notice sometimes imputed to buyers on the basis of the publicly recorded documents (so, there’s a prior deed with the covenant in grantee’s chain of title)

20
Q

A court will NOT enforce an equitable servitude if:

A

(1) The neighborhood conditions have changed so significantly that enforcement would be inequitable. The changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the entire area or subdivision has changed (piecemeal change or mere pockets of limited change are insufficient);
(2) The person seeking enforcement is violating a similar restriction on his own land (unclean hands);
(3) A benefited party acquiesced in violation of the servitude by a burdened party;
(4) A benefited party acted in such a way that a reasonable person would believe the covenant was abandoned or waived (estoppel); OR
(5) The benefited party fails to bring suit against the violator within a reasonable time (laches)