Restrictive Covenants Flashcards

1
Q

Overview

A

• Three legal mechanisms for imposing restrictions on future use of land:
o Negative Easement
o Equitable Servitude
o Real Covenant running with the land
• People more likely to buy property if they know how neighbor’s property will be used – certain restraints thus make the property more valuable
• Compare w/ determinable estates
o Forfeiture penalty was too harsh so courts were reluctant to actually enforce

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2
Q

• Who can enforce?

A

o Not state/public generally
o Must be benefitted by the covenant and were intended to benefit from covenant
o Some jurisdictions will allow implied reciprocal servitudes

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3
Q

Equitable Servitudes

A

• Restriction on land created by contract that applies to the party owning the land, his heirs, and assignees [intention to bind]. Subsequent purchaser must comply with restriction so long as it pertains to the land and they had notice (actual or constructive)

o	Components are: (TWIN)
	Touch/concern land
	Writing
	Intention to bind
	Notice at time of purchase 

o Creates a real property interest

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4
Q

• Constructive notice is satisfied if :

A

there is a record of the covenant in the chain of title or the original deed
o Some states allow notice by inquiry. Completely uniform appearance of an area constitutes notice that there might be a general plan – puts them to inquiry

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5
Q

• General Plan/Common Scheme Doctrine:

A

restrictions applied generally to a development may be excluded from individual lot deeds yet still be enforceable. usually estoppel theory – buyer has received benefits of covenant in question. Some jurisdictions do not recognize on statute of frauds grounds.

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6
Q

• Benefit can be in gross

A

o Personal to individual and not normally related to some other parcel of land
o Common example is the covenant not to compete
o Neither benefit nor burden will run with the land traditionally (some change; see Whittinsville infra regarding real covenant)

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7
Q

• Cheatam v. Taylor – VA (1927)

A

o F: Restrictions on land development include 20ft setback requirement; D expands store and goes into setback zone, P brings suit
o H: For P – addition must be torn down because the equitable servitude applies
 Substantial consequence, but better than forfeiture

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8
Q

• Rodgers v. Reimann – OR (1961)

A

Who can enforce?
o F: Sellers sold lot to D wanting to protect their view via a height restriction. Sellers used real estate agent who did not tell D’s about restriction. (not a common plan community)
o H: For D – need reliance not demonstrated by P here, so P does not have standing to sue
 Prior grantee may sue upon a covenant subsequently made by his grantor if all the elements essential to the enforcement of the covenant are present
 To make a 3rd person beneficiary of a promise: it must be shown that the promise was sufficiently comprehensive to include the benefit of the 3rd person w/in its intended operation
 Purchaser must have notice there is a restriction on the land purchasing + the scope
• No evidence here that covenant was intended to benefit other owners
• No implied reciprocal servitude here
 P here was not burdened and not explicitly benefitted

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9
Q

Real Covenant Running with the Land

A

• Contractual limitation, not real property interest
o Differs from equitable servitude because it connotes some form of affirmative obligation
• Remedy is money damages

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10
Q

• Elements of Real Covenants Running with the Land

A
(WITH VERNE)
o	Writing: must be in writing
o	Intent to bind future owners
o	Touch and concern the land: 
o	Horizontal Privity
•	Modern rule in some states: no horizontal privity requirement

o VERtical Privity:
o Notice:
o Enforceable

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11
Q

• Moseley v. Bishop – IN (1984)

A

o F: 1896 agreement between P and D’s predecessor in interest that drain would be permanently maintained
o H: For P, this agreement runs with the land
 Intent to bind: “permanently maintain”
 Touch and concern: clearly affects the land
 Vertical privity: complete transfer between D and D’s predecessor who was original party to the covenant
 Horizontal privity – potential issue because this wasn’t created at time of sale
• Ct. says that this drainage arrangement created an easement which satisfies horizontal privity

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12
Q

• Whitinsville Plaza Inc. v. Kotseas – MA (1979)

A

o H: Broadens touch and concern to economic impact  covenant not to compete case
o “Reasonable covenants against competition may be considered to run with the land when they serve a purpose of facilitating orderly and harmonious development for commercial use”

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13
Q

How to identify difference between Real Covenants and Equitable Servitudes

A

By the Remedy!
• Real Covenant= money damages
• Equitable Servitudes= Injunction

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