Restrictive Covenants

Question 1

What is a covenant? What is the difference between a covenant and an easement?

Answer 1

A covenant is a written promise - usually found in a deed – to do or not do something related to the land (e.g. maintain a fence, not use for certain commercial use, etc). It is different from an easement in that it is not the grant of a property interest - is just a contractual obligation on the part of the owner.

They run with the land, so future owners may be burdened by the covenants.

Question 2

What is the difference between a negative and affirmative covenant?

Answer 2

Negative - promise not to do something (aka restrictive covenant)
Affirmative - promise to do something

Question 3

When does the burden of a covenant validly run with the land? I.e. when is the successor to a burdened estate required to abide by the covenant?

Answer 3

For the burden to run with the land (and burdened estate be bound), it must meet the following req’s (WITHN):

[E.g. A-B are original promisors, and A2 is new A landowner and B2 is new B landowner]

• writing - original promise (A-B) must have been in writing
• intent - original promisors (A-B) must have intended that covenant would run with the land - can be inferred
• touch and concern - promise must touch and concern the land (e.g. to do something wrt land, homeowners assn fee, not to compete)
• horizontal and vertical privity:
  need horizontal privity, i.e. A-B had some shared interest in land note absence of this is common reason burden doesnt run with land
  need vertical privity, i.e. A1-A2, B1-B2, have some non-hostile nexus - contract, devise, etc.
• notice - new owner must have had notice of the promise when she takes land

Question 4

When does the benefit run with the land, i.e. when will the successor to the benefited land be able to enforce the covenant?

Answer 4

When the following requirements are met (WITV):

• writing - original promise A-B must have been in writing
• intent - original promise A-B must have intended the benefit would run
• touch and concern - benefit touches and concerns B2’s use of the land
• vertical privity - there must be non-hostile nexus between B1-B2

Note: NO horizontal nexus req’d - so when there is no horizontal privity, this means the B2 can enforce the covenant against A1 but NOT A2

Question 5

What happens if the burden does not validly run with the land but the benefit does?

Answer 5

This means that B2 has the benefit but A2 does not have the burden, so B2 can enforce the benefit against A1 but not A2.

Question 6

How may a covenant be terminated?

Answer 6

By:

• a written release
• the merger of both estates
• the condemnation/destruction of the burdened property

Question 7

Whats the difference between a covenant and an equitable servitude?

Answer 7

An equitable servitude is basically the same as a covenant - it is a promise wrt land. However, it is only enforced via injunction whereas a covenant is only enforced via damages.

An equitable servitude also does not require privity between parties - horizontal or vertical.

Note: On exam if P is seeking injunction than analyze as equitable servitude.

Question 8

What elements are needed to create an equitable servitude that is enforceable?

Answer 8

Same elements as a covenant except privity (WITN):

• writing - original promise in writing (but does not always have to be true)
• intent - original parties intended it to run with land
• touch and concerns land
• notice - to successors before they take new land (actual notice or record notice)

Question 9

What is the common scheme doctrine?

Answer 9

The common scheme doctrine functions as an exception to the general rule that equitable servitudes must have had the original promise in writing in order to be enforceable.

Under the common scheme doctrine, an equitable servitude that is present in a few deeds of certain premises but not in others within the same common development, will be deemed valid if (a) at the time of sale there was a general scheme of residential development which included the defendant’s lot (i.e. they had one of a group of common lots) and (b) the buyer had notice of the promise contained in those lots.

Notice is possible either as (a) actual notice (b) inquiry notice - i.e. everyone in neighborhood conforms or (c) record notice - i.e. available in public docs

Note: this is called an implied equitable servitude as it is implied by law

Note: if the common scheme arises after lots are sold the lots sold prior to it arising cannot have the promise enforced.

Question 10

What equitable defenses are available to a party seeking to invalidate an equitable servitude?

Answer 10

• neighborhood conditions have changed in a very pervasive way such that enforcement would be inequitable
• unclean hands - person trying to enforce violating similar restriction
• party acquiesced to violation
• estoppel - benefited party’s conduct indicated they waived promise
• laches - benefited party fails to bring action in reasonable time

Question 11

How may an equitable servitude be terminated?

Answer 11

• written release
• merger of properties
• condemnation of burdened property