Restrictive Covenants Flashcards
(9 cards)
Coventant (Generally)
Promise to do or not do something related to land
* Promise from one landowner to another
* Not the grant of a property interest (differs from easement)
Negative/Restrictive Covenant:
* Promise to not do something related to land
* Ex: “I promise not to build for commercial purposes.” “I promise not to paint my curtains brown.”
* Much more broad than negative easement
Affirmative Covenant:
* Promise to do something related to land
Covenant vs. Equitable Servitude
Look at Basis of Relief
* Money Damages = Construe as Covenant
* Injunction = Construe as Equitable Servitude
Running with the Land (Covenants)
The covenant binds successors to the originally covenanting parties
Requirements for Burden to Run (WITHN)
Writing
* The original promise (between A and B) must have been in writing.
Intent
* The original covenanting parties (A and B) must have intended that the covenant would run (meaning they intended that successors to the originally promising parties would be bound by the covenant).
* This intent may be inferred from circumstances surrounding the creation of the covenant, but is usually found in the language of the conveyance itself (for example, “A promises on behalf of herself, her successors and assigns…”). Courts are generous in finding the requisite intent.
Touch and Concern
* The promise must affect the parties’ legal relations as landowners and not simply as members of the community at large.
* Restrictive covenants touch and concern the land if they restrict the burdened parcel owner in her use of that parcel of land.
* Affirmative covenants touch and concern the land if they require the holder of the servient estate to do something that increases her obligations in connection with the land.
* Covenants to pay money to be used in connection with the land (such as homeowners’ association fees) and covenants not to compete do touch and concern the land.
Horizontal and Vertical Privity
* Horizontal privity refers to the nexus between the original promising parties (A and B). It requires that they be in succession of estate, meaning that they were in a grantor-grantee or landlord-tenant or mortgagor-mortgagee relationship when the covenant was created. In other words, at the time the promisor entered into the covenant with the promisee, the two must have shared some interest in the land independent of the covenant. Horizontal privity is difficult to establish. Its absence is the reason why many burdens will not run.
* Vertical privity refers to the nexus between the successor in interest (A-1) and the originally covenanting party (A). It simply requires some non-hostile nexus, such as contract, devise, or descent. The only time vertical privity will be absent is when the successor acquired her interest through adverse possession.
Notice
* The successor must have had notice of the promise when she took. Why? Because under modern recording acts (see 13.1, infra), to be bound by a covenant, a subsequent purchaser for value must have had actual, inquiry, or record notice of the covenant at the time of purchase.
Requirements for Benefit to Run (WITV)
Writing
* The original promise (between A and B) must have been in writing.
Intent
* The originally covenanting parties (A and B) must have intended that the benefit would run, meaning they intended that successors in interest to the promisee would be able to enforce the covenant.
Touch and Concern
* The benefit of a covenant touches and concerns the land if the promised performance benefits the promisee and her successors in their use and enjoyment of the benefited land. In other words, the promise must affect the parties as landowners.
Vertical Privity
* There must be a non-hostile nexus between the original promisee (B) and the successor in interest (B-1).
* Don’t need horizontal privity
Equitable Servitude
Promise that equity will enforce against successors of the burdened land regardless of whether it runs with the land at law, unless the successor is a bona fide purchaser (meaning, a subsequent purchaser for value without notice of the covenant).
* Injunctive relief
Creation of Equitable Servitude (WITNes)
Writing
* Generally, but not always, the original promise was in writing (the common scheme doctrine, discussed below, is an exception to this requirement)
Intent
* The original parties intended that the promise would be enforceable by and against successors
Touch and concern
* The promise affects the parties as landowners
Notice
* Subsequent purchasers of land burdened by the covenant had actual, inquiry, or record notice of the covenant when they acquired the land.
* Note: This rule is part of the law of equitable servitudes, and exists apart from the recording acts, so notice is required to bind a subsequent purchaser regardless of whether they seek the protection of a recording act. On the exam, though, a recording act will usually be involved. Note also that in most states, successors of burdened land who are not purchasers (such as donees) are bound by the covenant whether or not they had notice.
Note that in contrast to real covenants, which require vertical and horizontal privity of estate for burdens to run, and vertical privity for benefits to run, no privity of estate is required for an equitable servitude to be enforceable by and against assignees.
Implied Equitable Servitude (AKA: The General or Common Scheme Doctrine)
Elements:
* When sale began, subdivider had scheme of development which included D’s lot
* D had notice of restriction when he took
Notice (AIR):
1. Actual = D was advised
2. Inquiry = Lay of the land (Constuctive notice; should look around and inspect before taking title)
3. Record = Public Documents (Constructive notice)
Court will imply reciprocal negative servitude
Often comes up with subdivisions (Ex: Suppose A subdivides her land into 50 lots. She sells lots 1 through 45 through deeds that contain covenants restricting use to residential purposes. A then sells one of the remaining lots to a commercial entity, B, by deed containing no such covenant. B now seeks to build a convenience store on his lot. Can B be enjoined from doing so?
Equitable Defenses to Enforcement (Equitable Servitudes)
Changed Neighborhood Conditions = changed so significantly that enforcement would be inequitable.
* The changed circumstances alleged by the party seeking release from the terms of an equitable servitude must be so pervasive that the entire area or subdivision has changed.
* What’s never good enough here is piecemeal change or mere pockets of limited change
Unclean Hands = Violating restriction on own parcel
