Week 5 - Easement and Covenants 3 (9/20/24) Flashcards
1
Q
It is easier to show breach of a real covenant and get money damages than it is to show breach of an equitable servitude and get an injunction.
A. True
B. False
A
B.False
There are more elements to be satisfied to get money damages in a real covenant than for an equitable servitude to get an injunction. You have to show three privity in real covenant.
2
Q
There are more elements to be satisfied to get money damages in a ____ _______ than for an _______ _________to get an injunction. You have to show three privity in real covenant.
A
Real Covenant
equitable servitude
3
Q
_________ ___________ are promises respecting the use of the land that runs with the land at law.
A
real covenants
4
Q
_______ _________ are enforced at “law” based upon very strict requirements.
A
real covenants
5
Q
Real covenants are enforced at “_____” based upon very strict requirements.
A
law
6
Q
They address the issue of whether the benefited party can enforce the burden; in other words, can we make the burden run with the land?
A
real covenants
7
Q
Breach gets you money damages.
A
Real Covenant
8
Q
_____ ________ evolved because we needed a property right that was enforceable by and against subsequent purchasers. A mere contract right is sometimes insufficient to solve land use problems.
A
real covenants
9
Q
Early 19th century in that time promises were not enforceable against a person who wasn’t a party to the contract. One exception: _____ ____ _______ – contract was enforceable by and against the assignee.
In England only happened in a LL/ Tenant here it has involved to include both LL/T and Grantor/ Grantee.
A
Privity of Estate
10
Q
_____ ________– worried about whether or not someone can enforce the burden running with the land.
A
real covenants
11
Q
Example of a burden:
A
Single Family Residential Purposes Only
12
Q
_________ – single family residential purposes only. Limits the way you can operate your property.
A
Burden
13
Q
With real covenants ________ gets you money damages.
A
breach
14
Q
Real covenants come in two types: just like easements.
1. ?
2.
A
- An Affirmative Covenant
15
Q
Real covenants come in two types: just like easements.
1.
2. ?
A
- A Negative Covenant, sometimes also called a restrictive covenant
16
Q
Real covenants come in two types: just like easements.
1.
2.
A
- An Affirmative Covenant
- A Negative Covenant, sometimes also called a restrictive covenant
17
Q
Negative covenants are often called :
A
Restrictive Covenants
18
Q
GRANTOR –> GRANTEE transaction with a covenant requiring residential use of the property, where grantee conveys to a subsequent purchaser.
When thinking about real covenants we are oftentimes worried about whether or not the burden has gone to the new person?
It shouldn’t be that hard to enforce the covenant against B because B agreed to it, B likely signed something like I am only going to single family residential only. Problem becomes when B transfer to C whether or not the burden runs with the land.
This instance we say it is a grantor/grantee action between A and B.
Is there horizontal privity between A and B? yes.
If A has sold property to B what must B do in their transaction with C in order for there to be Vertical Privity on the burdened side?
A
FSA. B would have to give a FSA to C in order to transfer a sufficient amount of rights to have privity on the burdened side.
19
Q
Real Covenants Running with the Land
Mr. A owns two adjoining parcels, X and Y, and desires to sell parcel Y to Ms.B. But, A does not want parcel Y used for anything but residential purposes in order to maintain the value of parcel X.
QUESTION: If the conveyance to B includes a covenant requiring residential use, which party, Mr. A or Ms. B, owns the BURDENED PARCEL?
Here, B is a party to the transaction, and takes parcel Y with full notice of the covenant, and, A and B are in PRIVITY OF CONTRACT.
A
B owns the burdened parcel and A and B are in POC because they have signed agreement where B has agreed not to use the property for anything other than a residence.
20
Q
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1. ?
2.
3.
4.
5.
A
- Written covenant (Statute of Frauds)
21
Q
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1.
2. ?
3.
4.
5.
A
- Intent that covenant run with the land
22
Q
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1.
2.
3. ?
4.
5.
A
- Notice of the covenant to burdened party
23
Q
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1.
2.
3.
4. ?
5.
A
- Privity
24
Q
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1.
2.
3.
4.
5. ?
A
- Covenant touches and concerns
25
Elements for a Real Covenant.
Requisites for real covenants to run with the land to a new party with the burden:
1.
2.
3.
4.
5.
Assume that A B transaction of a moment ago. Then B conveys to C. When should A be able to sue C for $$ damages?
All of these have to be met for A to sue C and get money damages. They all have to be met or you cannot get any money damages.
1. Written Covenant (Statute of Frauds)
2. Intent that covenant run with the land
3. Notice of the covenant to burdened party
4. Privity
5. Covenant touches and concerns
26
Real Covenants Running with the Land
Requisites for real covenants to run with the land to a new party with the burden:
How to satisfy the written covenant (statute of frauds):
It to be in writing to satisfy the statue of frauds. –
In a deed or a lease there is a writing.
Relationship between A and B is LL/T or Grantor/ Grantee then you have a written document likely, you absolutely do if it is grantor/grantee – most leases are in writing and that is what we are going to use as our proof for the written element.
27
Real Covenants Running with the Land
Requisites for real covenants to run with the land to a new party with the burden:
How to satisfy the intent that covenant run with the land:
Intent is presumed.
still need to mention it.
28
Real Covenants Running with the Land
Requisites for real covenants to run with the land to a new party with the burden:
How to satisfy the notice of the covenant to burdened party:
if A and B are in a grantor/grantee relationship, person C is going to have notice of the covenant.
Record notice if the deed was recorded.
A and B in a LL//Tenant Relationship C might have notice if C expressly assumed the covenants in the lease.
29
Real Covenants Running with the Land
Requisites for real covenants to run with the land to a new party with the burden:
How to satisfy privity:
Both types of privity must be satisfied: Horizontal and vertical
A and B = horizontal privity (LL/T or Grantor/ Grantee)
vertical privity – 2 tests.
Burdened is same. B and C is on the burdened side and B must have conveyed same estate in land that B has to C.
vertical privity on the benefit side: A and D. test for vertical privity is some. A most convey some of his interest to D, you can give the whole thing.
30
___________ privity is between A and B.
Horizontal
31
What are the two tests for vertical privity?
Burdened is the Same Test.
Benefited is the Some Test
32
Vertical Privity - Burdened is the _________ Test.
Same
33
Vertical Privity - Benefited is the ________ Test.
Some
34
Real Covenants Running with the Land
Requisites for real covenants to run with the land to a new party with the burden:
The covenant has to touch and concern the land. How do we know which covenants touch and concern the land?
affects the physical use and enjoyment of the land. Single family residential purposes only would affect physical use and enjoyment.
35
**If you have to write about real covenants you will want to know these elements. !!
!!
36
As a general rule, a burden will _______ _____ _______ land when it:
Affects the physical use or enjoyment of the land, or the title to the land.
Is to be performed on the land
Affirmative covenant for payment of money: an agreement to pay money does touch and concern the land where the money is spent on services that affect the physical enjoyment or use of the benefited and burdened land.
Benefit and burden must be felt in the capacity as landowners, not just as individuals.
touch and concern
37
In a real covenant context, how do you establish horizontal privity between A and B?
Landlord/ Tenant
Grantor/ Grantee
38
With a grantor-grantee transaction between A and B, when B transfers to C, when can A sue C for money damages?
A. When C breaches and has vertical privity with A.
B. When C breaches and has vertical privity with B.
C. When C breaches and has horizontal privity with B.
D. When C breaches and has horizontal privity with A.
B. When C breaches and has vertical privity with B.
39
B, owner of Blackacre, promised A, owner of Whiteacre, that Blackacre shall not be used for industrial purposes, B sells Blackacre to C, and A sells Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages.
These facts on their own are they enough for us to say for sure that this is a real covenant?
1. Is the covenant in writing?
It doesn’t say in the fact pattern. If B promised to A owner of Whiteacre we don’t know if it was oral or written and if it wasn’t written down, we don’t satisfy the 1st element. Talk about the other elements.
40
B, owner of Blackacre, promised A, owner of Whiteacre, that Blackacre shall not be used for industrial purposes, B sells Blackacre to C, and A sells Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages.
These facts on their own are they enough for us to say for sure that this is a real covenant?
2. Is there intent?
2. Intent is presumed
41
B, owner of Blackacre, promised A, owner of Whiteacre, that Blackacre shall not be used for industrial purposes, B sells Blackacre to C, and A sells Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages.
These facts on their own are they enough for us to say for sure that this is a real covenant?
3. do we know that C has notice of the promise between A and B?
3. B sold it but maybe B didn’t tell C. We don’t know if there is notice. B made the promise to A nothing that tells us that B owns black acre.
We don’t know if B bought it from A.
We don’t know if C has notice because we don’t know if that promise between A and B was written down.
If it was written down and recorded in a deed or lease, then C would have notice. Or if B told C, you could only do residential only then C would have notice.
We don’t have those facts.
42
B, owner of Blackacre, promised A, owner of Whiteacre, that Blackacre shall not be used for industrial purposes, B sells Blackacre to C, and A sells Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages.
These facts on their own are they enough for us to say for sure that this is a real covenant?
4. Do we have Privity?
4. Horizontal privity is not satisfied because we can’t prove A and B had a LL/T G/G relationship
Vertical privity between A and D because A sells to D and you can assume FSA. A didn’t have to give FSA to D, A could have given some of A’s rights but she gave all so we are good on the benefit side.
Vertical privity between B and C yes because B sells to C. Facts tell us that. When it says sells you can assume FSA. If only a life estate or fee simple determinable it would say that if it just says B sells to C FSA has been exchanged. Because B owned BA and then sold to C B has given away all of B’s rights. We have vertical privity on the burdened side.
43
B, owner of Blackacre, promised A, owner of Whiteacre, that Blackacre shall not be used for industrial purposes, B sells Blackacre to C, and A sells Whiteacre to D. C constructs a factory on Blackacre. D sues C for damages.
These facts on their own are they enough for us to say for sure that this is a real covenant?
5. Do we know if it touches and concerns the land?
Can D sue C for money damages and win under these facts? No D cannot!
5. shall not be used for industrial purposes. It relates to the physical use and enjoyment of the land and therefore it touches and concerns the land.
No D cannot
D might be able to sue C and get an injunction. We need a little more information, but we are not as far from that as we are from money damages.
44
They might just be neighbors and A might be by the fire pit and say I know you are thinking about selling and worried the next guy is going to open a factory and B say I won’t open a factory and the guy I sell it to won’t open a factory – no ________ ________ there. Watch out for that in a real covenant context.
horizontal privity
45
Benefit Side and Burden Side
If A --> D and B still owns, and D sues B, D must allege that the benefit runs to D.
Explain:
D will have to allege that the benefit runs to D. Which element relates to the relationship between A and D? vertical privity on the benefit side – that means you would have to satisfy some test that A has transferred some of A’s rights to D or B can’t sue D.
46
If B --> C, who constructs factory, and A still owns, and A sues C, A must allege that the burden runs to C.
Explain:
If B conveys to C and C constructs a factory and A still owns lot 1 and A sues C.
A will have to prove vertical privity on the burdened side by satisfying the same test.
47
If D sues C, D must allege that both the burden and the benefit run.
Explain:
If D is suing C – D will have to how both benefit and burden run and prove vertical privity on both sides.
48
Anytime you have a new person doing the suing or getting sued you have to establish vertical privity between the old people and the new people.
True or False.
True
49
________ _______: Created based upon the relationship between the original parties to the covenant (L T or Grantor Grantee).
Horizontal Privity
50
_______ _______: Created based upon the relationship between one of the original parties to the covenant and a new party (e.g., subsequent purchaser C, who takes from B subject to the covenant.)
Vertical Privity
51
B conveys all interest to C, but there is no Grantor-Grantee relationship between A and B (and A and B are not landlord and tenant). Is it a real covenant and why?
No because it was just a promise between neighbors and there is no horizontal privity.
52
When is horizontal privity required to enforce the covenant?
Horizontal privity of estate is required when the party with the benefit (i.e., A) is pursuing enforcement against a new party with the burden, C.
Anytime somebody is suing C you need horizontal privity.
53
When is horizontal privity NOT required to enforce the covenant?
1. ?
2.
1. Between the original parties to the covenant; or
(If somebody is suing B you don’t have to prove horizontal privity.)
54
When is horizontal privity NOT required to enforce the covenant?
1.
2. ?
2. Where the successor benefiting party pursuing enforcement against original burdened party.
(If somebody is suing B you don’t have to prove horizontal privity.)
55
Vertical Privity is always required in order to enforce the covenant against or by a new party.
But,… there are two standards for vertical privity.
Always need vertical privity to enforce the covenant by or against the new party. !!
!!
56
For the burden to run with the land
When the party with the benefit, A, is pursuing enforcement against new party with the burden, C,…
B must have conveyed the same type of interest to C, e.g., fee simple to fee simple.
57
When a new party with the benefit, D, is pursuing enforcement of the covenant against either the original party with the burden, B, or the new party with the burden, C,…
A must have conveyed to D only some of A’s original interest, e.g., D could be A’s tenant, or have a life estate.
58
Real Covenants Running with the Land Hypo
G’r – G’ee between A and B. A wants to enforce ($$$) written covenant to require residential use of the property against C, who takes fee simple from B in a deed.
* Written covenant (Statute of Frauds)? – Yes. Written covenant A and B are in a – grantor/ grantee relationship there is deed between them and helpful because it is prob written in the deed.
* Intent that covenant run with the land? – intent is presumed
* Notice of the covenant to burdened party? – C has notice if this covenant was written into the deed between A and B and recorded C has notice. But don’t want to assume anything so for EXAM say: If this covenant was written into the deed between A and B and recorded C has notice or if it was written into the deed between B and C, even if it wasn’t record C would have notice because C has accepted the deed from B.
* Privity – horizontal and vertical? – horizontal – yes grantor/ grantee, no D so don’t worry about vertical privity on benefit side. Burdened side vertical privity – FSA was exchanged and that is that same that B had and gave to C.
* Covenant touches and concerns? – yes, residential covenant because it concerns the physical use and enjoyment of the land.
59
G’r – G’ee between A and B. D, A’s tenant, wants to enforce ($$$) written covenant to require residential use of the property against B.
* Written covenant (Statute of Frauds)? - written covenant. Grantor/grantee
* Intent that covenant run with the land? - intent presumed
* Notice of the covenant to burdened party? – B agreed to it. B is the one who agreed to it. B has notice because B is burdened.
* Privity – horizontal and vertical? – vertical between A and D yes because A has leased the property to D or D is A’s tenant and that is the legal relationship between the parties and the transfer of rights. Horizontal between A and B – do you need horizontal privity between A and B? WE DON’T
Relationship between A and B is such that B is the person who has agreed and because we are suing the original party with the burden, we don’t have to go through the legal formality to make sure there was a formal document exchange that clarified the relationship because we know B is the person who agreed to it. It still has to be in writing. We have horizontal privity because A and B are in a G/G relationship, but we don’t need it.
* Covenant touches and concerns? – yes because it is regarding the physical use and enjoyment.
60
HYPO: A and B enter into and record an agreement restricting both their respective properties for residential use. B then conveys to C all of B’s interest.
Question: Can A enforce the covenant against C based upon a money damage remedy?
Written – yes record
Intent – presumed
Notice –
Privity – horizontal (new person is being sued) vertical privity met. Horizontal does not say that they are in grantor/ grantee or LL/T. that sounds fancy, but they did not necessarily make it legal. If you have to prove HP to get money damages and you can’t prove A and B are LL/T or G/G you haven’t proven horizontal privity then money damages are unavailable.
61
An _____________ ________, enforceable by injunction, is a covenant respecting the use of land, where the original Grantor and Grantee intended to create a covenant (burdened and benefited parcels) enforceable against successor owners or possessors with notice, regardless of enforceability at law. [created by Tulk v. Moxhay].
equitable servitude
62
An equitable servitude, enforceable by ___________, is a covenant respecting the use of land, where the original Grantor and Grantee intended to create a covenant (burdened and benefited parcels) enforceable against successor owners or possessors with notice, regardless of enforceability at law. [created by Tulk v. Moxhay].
injunction
63
Began because parties intended to create a covenant that ran with the land regardless of its enforceability at law.
Challenging to figure out if there is a real covenant and to be able to get money damages. If you can’t prove those things, it would be unfair to pretend the covenant doesn’t exist.
Equitable Servitudes
64
Tulk v. Moxhay:
If an equity is attached to the real property by the owner, no one purchasing with the notice of that equity can stand in a different situation from the party from whom he purchased. !
!
65
Equitable Servitudes
Requirements for enforcement of equitable servitude against a new party with the burden:
1. ?
2.
3.
4.
1. Intent to run with the landEquitable Servitudes
66
Requirements for enforcement of equitable servitude against a new party with the burden:
1.
2. ?
3.
4.
2, Notice to burdened party, actual or constructive
67
Requirements for enforcement of equitable servitude against a new party with the burden:
1.
2.
3. ?
4.
3. Covenant must touch and concern land
68
Requirements for enforcement of equitable servitude against a new party with the burden:
1.
2.
3.
4. ?
4. Comply with Statue of Frauds (W/ Exception)
69
Easier to get an injunction than money damages because you don’t have to prove ______.
privity
70
Question: How do you distinguish between a Real Covenant and an Equitable Servitude?
_________ __________ attach to the estate in land. _______ ________ sinks its tentacles into the soil burdening the land and not the estate.
Real Covenants
Equitable Servitudes
71
Remedy for breach of Equitable Servitude = __________
Remedy for breach of Real Covenant = __________
Injunction
Money Damages
72
In many states courts of equity and law have merged and you seek injunction, and you might get money damages instead. Apparently if you get an injunction, you can sell it. If the chancery court gives you an injunction to shut down the factory, you can tell them you have a right to shut them down and they might say we will give you money if you let us stay open. The jury may say 100K but the factory thinking about how much it will lose might give you a lot more. !!
!!
73
Creation of Covenants
For a document to be enforceable as a real covenant:
1. ?
2.
1. Must comply with statute of frauds and
74
Creation of Covenants
For a document to be enforceable as a real covenant:
1.
2. ?
2. Cannot arise by estoppel, implication or prescription, as can an easement
75
Equitable Servitude - _______ _______ _______ is not in writing but still enforceable.
reciprocal negative covenant
76
Creation of Covenants
Reciprocal Negative Covenants
Requirements to establish:
1. ?
2.
All the other elements of an equitable servitude.
* Intent to run with the land
* Notice (constructive)
* Touch and concern
1. Common Owner
77
Creation of Covenants
Reciprocal Negative Covenants
Requirements to establish:
1.
2. ?
All the other elements of an equitable servitude.
* Intent to run with the land
* Notice (constructive)
* Touch and concern
2. Scheme of restrictions
78
Creation of Covenants
Reciprocal Negative Covenants
Requirements to establish:
1.
2.
All the other elements of an equitable servitude.
* Intent to run with the land
* Notice (constructive)
* Touch and concern
1. Common Owner
2. Scheme of restrictions
79
Developer who wants to build a subdivision – every house to be 2 stories and brick for example. Common owner developer who owns the whole parcel split into lots. Scheme of Restrictions is the Master plan and what the community will look like. Town houses over here and apartments and amenities in the center or is it community where all of the houses are between 2-300 square feet. What is your plan for how it will look. You have to have a plan.
What does this refer to?
Reciprocal negative covenants
80
If you have an owner of 2 or more lots and they sell one with restrictions of benefit to the land retained the servitude becomes mutual and during the period of restraint the owner of the lot or lots retained can do nothing forbidden to the owner of the lot sold.
These ES are going to be implied even though not in a deed. No, you can’t build a gas station in your backyard because no one else can either. Your property is benefited because your neighbors haven’t don’t this and you won’t do this either. !!
!!
81
If you start with a common owner or developer to a piece of property and they have a master plan, even if your deed doesn’t make specific reference to the restriction – you have to read other deeds and see what the restrictions are because we will hold those applicable to you as well.
Majority view – you can’t get so excited because your deed forgot to mention it, you will be stuck with everybody else in your subdivision in terms of restrictions.
!!
!!
