Restrictive Covenants Flashcards
Definition of the Covenant
A promise to do or not do something related to land.
How a covenant is different from an easement
- They both involve benefitted and burdened tracts of land
- It is not the grant of a property interest.
- Instead, it is a con-tractual limitation or promise regarding land.
In terms of
Definition of real covenant
- The covenant starts out as a mere contractual limitation regarding land.
- The covenant becomes known as a real covenat when it is capable of running with the land.
Definition of Running with the Land
The covenant’s ability to bind the successors to the originally contracting or covenanting parties
Two types of covenants based on their subject matter
Negative (restrictive) and affirmative covenants
Definition of Negative (restrictive) Covenant
- A promise to refrain from doing something related to land.
- Most covenants are restrictive.
- Born b/c negative easements are difficult to obtain but ppl still wanted ways to regulate land use.
Examples of Restrictive Covenants
- “I promise not to build for commercial purposes,”
- “I promise not to paint my shutters brown,” or
- “I promise not to place a petting zoo on my land.”
Definition of affirmative covenant
- A promise to do something related to land.
- e.g. “I promise to maintain in good repair our common fence”
- “I promise to tend to our common garden”
- “I promise to pay annual dues to our Homeowners’ Association”
The difference between real covenants and equitable servitudes
RC is a promise enforceable in law, ES is a promise enforceable in equity
- Lots of factual overlap between the two
- One set of facts could fit both
How to know choose between RCs and ESs.
Look to the relief the plaintiff is seeking.
- If P seeks money damages because of a violation of a promise regarding land, it’s a covenant.
- This is bc a covenant is a legal device and damages is a legal remedy.
- If P seeks injunctive relief, it’s an equitable servitude
- e.g. P seeks to enjoin D from violating the promise.
The two tests to determine when a covenant runs with the land
- Must determine separately:
- whether the burden runs with the land, and
- whether the bargain runs with the land.
- Always analyze burden first
- Covenant runs with the land when capable of binding successors
- Benefits are easier to run with the land than burdens are
How to determine whether the burden runs with the land
WITHN
- Writing
- Intent
- Touch and Concern
- Horizontal and Vertical Privity
- Notice
Burden Run-Writing Requirement
The original promise must have been in writing
Burden Run- Intent Requirement
- The original parties must have intended that the promise would bind successors.
- Courts are generous in imputing to the parties the requisite intent.
Burden Run- Touch and Concern Requirement
- The promise must touch and concern the land
- this means that it must affect the parties’ legal relations as landowners, and not simply as members of the public at large.
- i.e. must be of and pertaining to land.
- Examples:
- covenants to pay money to be used in connection with the land (HOA fees)
- covenants by one landowner not to compete with the business of another landowner
Burden Run- Touch and Concern Requirement
VA Distinction
Unline the maj., a covenant not to compete does not run with the land in VA.
Burden Run- Types of Privity Needed
For the burden to run, you need both horizontal and vertical privity.
Horizontal Privity
- The nexus between the originally covenanting parties
- A and B must be in “succession of estate” at the time the promise is made.
Succession of estate
Can mean:
- A and B were in a grantor-grantee relationship,
- a landlord-tenant relationship, or
- a mortgagor-mortgagee (debtor-creditor) relationship
Often difficult to establish and doesn’t commonly occur. That’s why burdens typically don’t run.
Vertical Privity
- the nexus between the burdened possessor with the new possessor.
- requires some non-hostile relationship between A and her successor, A–1.
- e.g. contract, blood relation, or devise.
- The only time that vertical privity will be absent is if A–1 acquired her interest through adverse possession.
Burden Run-Notice Requirement
- A–1 must have had some form of notice of the promise when she took.
The 3 kinds of notice
AIR:
- Actual
- Inquiry
- Imputed
Actual notice
Successor was literally and actually informed of the existence of the covenant when she took the land.
Inquiry and Record notice are both this kind of notice
Constructive Notice
This means that they are sometimes imputed regardless of whether the successor had notice.
Inquiry Notice
- If the appearance of the premises should have given notice of the presence of the covenant, the successor would be charged with such notice, even though she may not have inspected.
- synonymous with “the lay of the land.”
Record Notice
- Form of notice that is attributable to parties on the basis of the publicly recorded documents.
- If the covenant was properly recorded within A’s chain of title, A–1 would be charged with notice of it, regardles of whether or not A–1 did a title search.
Elements needed for the benefit to run
WITV
- Writing
- Intent
- Touch and Concern
- Vertical Privity
Horizontal privity is not needed. Much easier for the benefit to run.
Definition of equitable servitude
- Promise that equity will enforce against successors.
- Accompanied by equitable relief, e.g. injunctions
How to create an equitable servitude that will bind successors
WITNES
- Writing
- Intent
- Touch and concern
- Notice
- ES: equitable servitude
Privity is NOT required.
implied equitable servitude or common scheme doctrine.
- Maj. of courts allow an ES to be implied in the absence of a writing if the elements of the general or common scheme doctrine are satisfied.
- Min. require writing
- Example: A subdivides land into 50 lots for residential purposes. Sells lots 1-45 through deeds that contain covenants restricting use for residential purposes. A sells one remaining lot to B, but no covenant is in the deed. B wants to build convenience store. Court can enjoin him.
Elements of the general or common scheme doctrine
- Subdivider had a general scheme of residential development which included Defendant, at the time the sales began.
- B had some form of notice of the restriction when he took. (AIR)
- Inquiry notice- the neighborhood conforms to the common restriction + routine inspection would put B on notice
- Record Notice- Majority says B is not required to look up prior deeds transferred by his grantor. Minority says the opposite, which puts a huge burden on B.
Equitable defense to enforcement of equitable servitudes.
Changed Conditions (narrow defense)
- Party seeking release from the terms of an equitable servitude must allege changed circumstances so pervasive that the entire area’s essential character has been irrevocably altered
- e.g. Neighborhood was once residential but is now commercial
- Gradual change or change to a bordering lot is never sufficient
