12. Covenants & Equitable Servitudes

Question 1

What is a covenant?

Answer 1

Covenantee’s written promise to do/NOT do something on Promisee’s land

Question 2

How may subsequent owners of the land be bound by existing covenants?

Answer 2

Real covenants must run with the land at law

• Benefit
• Burden

Question 3

What is required for the burden to run with the land by covenants?

Answer 3

(WITHVN)

• Promisor promises to do something for Promisee
• Promisor transfers interest to Promisor’s successor (Covenantee)
• Covenantee must do something for Promisee
• Promisee’s successor must NEVER do something for Promisor/Promisor’s successor

1) Writing

2) Intent
- Parties (Promisee + Covenantee) intended burden to run with land
- Circumstances/Language
- ‘This covenant runs with the land’/’Grantee covenants for himself, his heirs, etc’

3) Touch + Concern land
- Burden’s performance must diminish landowner’s rights and powers in enjoying his land
- Negative covenants (Restrict Covenantee from use of Promisee’s land) (NOT Covenantee’s land)
- Affirmative covenants (Enforce Covenantee to do something on Promisee’s land) (NOT Covenantee’s land)

4) Horizontal privity
- Promisor + Promisee (original parties) had interest in land ‘independent’ of covenant at time of entering covenant
- Grantor-Grantee, Landlord-Tenant, Easement holders

5) Vertical privity
- Covenantee holds ENTIRE durational interest that Promisor held (fee simple)
- NOT defeasible fees/life estates

6) Notice (bona fide purchaser)
- Notice (actual/inquiry/record)
- For value
- At time of purchase

Question 4

What is required for the benefit to run with the land by covenants?

Answer 4

(WITV)

• Promisor promises to do something for Promisee
• Promisee transfers interest to Promisee’s successor (Covenantee)
• Promisor promises to do something for Promisee’s successor
• Promisee’s successor NEVER promises to do something for Promisor’s successor

1) Writing

2) Intent
- Parties (Promisee + Covenantee) intended burden to run with land
- Circumstances/Language
- ‘This covenant runs with the land’/’Grantee covenants for himself, his heirs, etc’

3) Touch + Concern land
- Burden’s performance must benefit Covenantee’s + Successor’s rights and powers in enjoying his owned land (adjacent to Promisor’s land)

4) Vertical privity
- Covenantee holds same/different durational interest that Promisee held
- Defeasible fees/life estates
- NO horizontal privity required

Question 5

What type of covenants running with the land may be enforceable?

Answer 5

Promise to pay money

Non-compete promises

• Some courts: Enforceable
• Some courts: NOT enforceable (such covenant’s physical use would not enhance land value)

NOT racially restrictive

Question 6

What is the remedy for breach of covenant?

Answer 6

Monetary damages

Question 7

How may covenants/equitable servitudes be terminated?

Answer 7

Release (written)

• Covenants (by benefitted/burdened estate)
• Equitable servitudes (by benefitted estate)

Merger
- Benefitted + Burdened estates

Condemnation (of burdened estate)

Question 8

What is the difference between the running of the benefit and burden on the land in covenants?

Answer 8

Benefit
- Vertical privity (carved out of original party’s interest)

Burden

• Vertical (Take original party’s entire interest)
• Horizontal privity (Promisor + Promisee)
• Notice

Question 9

What is an equitable servitude?

Answer 9

Covenantee’s written promise to do/NOT do something on Promisee’s land

• Whether or NOT covenant runs with land at law
• Enforceable by equity

Question 10

What is required for the burden to run with the land by equitable servitude?

Answer 10

(WITN)

• Promisor promises to do something for Promisee
• Promisor transfers interest to Covenantee
• Covenantee must do something for Promisee

1) Writing; or

1) Implied from common scheme of development
- Recorded plat/General pattern of restrictions/Oral representations to buyers early
- Applies to negative covenants (‘Reciprocal Negative Servitudes’) (NOT affirmative covenants)
- If scheme arose ‘at time’ sales in subdivision began => ALL parcels subject to ES
- If scheme arose ‘after’ sales in subdivision began => Only lots NOT ‘sold’ are subject to ES

2) Intent
- Parties (Promisee + Covenantee) intended burden to run with land
- Circumstances/Language
- ‘This covenant runs with the land’/’Grantee covenants for himself, his heirs, etc’

3) Touch + Concern land
- Burden’s performance must diminish landowner’s rights and powers in enjoying his land
- Negative covenants (Restrict Covenantee from use of Promisee’s land) (NOT Covenantee’s land)
- Affirmative covenants (Enforce Covenantee to do something on Promisee’s land) (NOT Covenantee’s land)

4) Notice (bona fide purchaser)
- Notice (actual/inquiry/record)
- For value
- At time of purchase

Question 11

What is required for the benefit to run with the land by equitable servitude?

Answer 11

(WIT)

• Promisor promises to do something for Promisee
• Promisee transfers interest to Covenantee
• Promisor promises to do something for Covenantee

1) Writing

2) Intent
- Parties (Promisee + Covenantee) intended burden to run with land
- Circumstances/Language
- ‘This covenant runs with the land’/’Grantee covenants for himself, his heirs, etc’

3) Touch + Concern land
- Burden’s performance must benefit Covenantee’s + Successor’s rights and powers in enjoying his owned land (adjacent to Promisor’s land)

Question 12

What is the remedy for breach of equitable servitude?

Answer 12

Injunction

Question 13

What equitable defences may be used to prevent enforcement of equitable servitudes?

Answer 13

(CLEAU)

Change in neighbourhood
- So significant

Laches
- Benefitted party failed to sue within reasonable time

Estoppel
- Reasonable person would believe covenant was abandoned/waived based on Benefitted party’s act

Acquiescence
- Benefitted party accepted Burdened party’s covenant violation with NO protest => Other Burdened parties NOT bound by ES

Unclean hands
- Party seeking enforcement violated ‘similar’ restriction on his own land

Question 14

What is the difference between remedies for covenants and equitable servitudes?

Answer 14

Covenant
- Damages

Equitable servitude
- Injunction

Question 15

When is notice not required for burden to run with the land?

Answer 15

Common law dedication doctrine

- Owner donates land for public use