Construction of a Real Covenant

Question 1

A real covenant that is not clear, what do states do?

Answer 1

they are split. Some:
-see them as a contract & seek to implement intent of parties
others:
-see them as Restraints on alienation & so narrowly construe them (mass)

Question 2

Rhue v. Cheyenne Homes, Inc.

Answer 2

Rhue (defendant) intended to relocate a 30 year old house into a modern subdivision. The subdivision’s protective covenants prohibited the construction or location of any building in the subdivision without advance approval of the subdivision architectural control committee. Rhue did not submit plans for committee approval. Cheyenne Homes (plaintiff) petitioned for an injunction prohibiting the placement of Rhue’s house.
rule: a restrictive covenant requiring committee approval of planned construction is valid even when the covenant fails to set forth explicit approval criteria

Question 3

(Amendment Rights)

Real Covenants that can be amended will……?

Answer 3

-run w/the land provided a perpetual mechanism is established for the exercise of the amendment rights

Question 4

perpetual mechanisms established….

Answer 4

1) committee- must act:
- reasonably & in good faith
- need perp. mechanism to put people ON commtee
2) Vote of the majority or super-majority of the dominant estates
- works better- no overhead & runs perpetually

Question 5

If a developer keeps ____ ____ _ ____ real covenants, the covenant will NOT run w/the land.

Answer 5

unilateral rights to amend

• developer could amend the restrictions out of existence, so they would not actually bind future land title holders
• who would get to exercise amendment right after he’s gone??

Question 6

Restraints on Alienation (narrowly construing problems when lang. not expressly written)

Answer 6

• to prevent transfer of property freely

- we WANT property to transfer freely so not in feudal times again so ..

Question 7

How do we KNOW have a real covenant in construction problems (lang unclear)

Answer 7

Its lowering the value of our land. Restrain on alienation–so we construe it narrowly

Question 8

Mass

Answer 8

conservative w/covenants. Not well liked here

Question 9

argue are Covenants on architecture style….are they restraints on alienation?

Answer 9

yes-decrease value of land, makes harder to sell

no-value of property could go up cuz all the same & the people of the community like that.

Question 10

languange to use for restrictions that are unclear arguments

jones v. park lane (1956)

Answer 10

“[the building restriction & use restriction] are wholly independent of one another and the one is not to be extended so as to include the other unless the INTENTION to do so is EXPRESSLY and PLAINLY stated; to doubt is to deny enforcement.”

Question 11

two categories of restriction limitations

Answer 11

Building restrictions: restricting type & # of buildings (physical/external appearance)
Use restrictions: Purposes which buildings are used
-Nature of occupancy, Operations conducted therein, As affecting health, welfare & comfort of neighbors

Question 12

arbitrary

Answer 12

disregard info in front of way & base decision on other grounds

Question 13

capricious

Answer 13

“whatever”; not just disregarding info, you don’t give a damn

Question 14

can we have amendment rights

Answer 14

yes.- don’t want to be locked into forever

Question 15

why be careful to set up to be perpetual?

Answer 15

• so processing of amending can go into the future also

- if NOT perpetual then it can’t run w/the land

Question 16

if the developer still owns ONE last parcel left on development & has unilateral rights to amend…..?

Answer 16

the covenant will NOT run w/land.

Question 17

builder puts “ restrictions—subject to amendment”

Answer 17

being first buyer into neighborhood can be risky