Restrictive Covenants

Question 1

Definition of the Covenant

Answer 1

A promise to do or not do something related to land.

Question 2

How a covenant is different from an easement

Answer 2

• They both involve benefitted and burdened tracts of land
• It is not the grant of a property interest.
• Instead, it is a con-tractual limitation or promise regarding land.

Question 3

In terms of

Question 4

Definition of real covenant

Answer 4

• The covenant starts out as a mere contractual limitation regarding land.
• The covenant becomes known as a real covenat when it is capable of running with the land.

Question 5

Definition of Running with the Land

Answer 5

The covenant’s ability to bind the successors to the originally contracting or covenanting parties

Question 6

Two types of covenants based on their subject matter

Answer 6

Negative (restrictive) and affirmative covenants

Question 7

Definition of Negative (restrictive) Covenant

Answer 7

• A promise to refrain from doing something related to land.
• Most covenants are restrictive.
• Born b/c negative easements are difficult to obtain but ppl still wanted ways to regulate land use.

Question 8

Examples of Restrictive Covenants

Answer 8

• “I promise not to build for commercial purposes,”
• “I promise not to paint my shutters brown,” or
• “I promise not to place a petting zoo on my land.”

Question 9

Definition of affirmative covenant

Answer 9

• A promise to do something related to land.
  
  • e.g. “I promise to maintain in good repair our common fence”
  • “I promise to tend to our common garden”
  • “I promise to pay annual dues to our Homeowners’ Association”

Question 10

The difference between real covenants and equitable servitudes

Answer 10

RC is a promise enforceable in law, ES is a promise enforceable in equity

• Lots of factual overlap between the two
• One set of facts could fit both

Question 11

How to know choose between RCs and ESs.

Answer 11

Look to the relief the plaintiff is seeking.

• If P seeks money damages because of a violation of a promise regarding land, it’s a covenant.
  
  • This is bc a covenant is a legal device and damages is a legal remedy.
• If P seeks injunctive relief, it’s an equitable servitude
  
  • ​e.g. P seeks to enjoin D from violating the promise.

Question 12

The two tests to determine when a covenant runs with the land

Answer 12

• Must determine separately:
  
  • whether the burden runs with the land, and
  • whether the bargain runs with the land.
• Always analyze burden first
• Covenant runs with the land when capable of binding successors
• Benefits are easier to run with the land than burdens are

Question 13

How to determine whether the burden runs with the land

Answer 13

WITHN

• Writing
• Intent
• Touch and Concern
• Horizontal and Vertical Privity
• Notice

Question 14

Burden Run-Writing Requirement

Answer 14

The original promise must have been in writing

Question 15

Burden Run- Intent Requirement

Answer 15

• The original parties must have intended that the promise would bind successors.
• Courts are generous in imputing to the parties the requisite intent.

Question 16

Burden Run- Touch and Concern Requirement

Answer 16

• The promise must touch and concern the land
  
  • this means that it must affect the parties’ legal relations as landowners, and not simply as members of the public at large.
• i.e. must be of and pertaining to land.
• Examples:
  
  • covenants to pay money to be used in connection with the land (HOA fees)
  • covenants by one landowner not to compete with the business of another landowner

Question 17

Burden Run- Touch and Concern Requirement

VA Distinction

Answer 17

Unline the maj., a covenant not to compete does not run with the land in VA.

Question 18

Burden Run- Types of Privity Needed

Answer 18

For the burden to run, you need both horizontal and vertical privity.

Question 19

Horizontal Privity

Answer 19

• The nexus between the originally covenanting parties
• A and B must be in “succession of estate” at the time the promise is made.

Question 20

Succession of estate

Answer 20

Can mean:

• A and B were in a grantor-grantee relationship,
• a landlord-tenant relationship, or
• a mortgagor-mortgagee (debtor-creditor) relationship

Often difficult to establish and doesn’t commonly occur. That’s why burdens typically don’t run.

Question 21

Vertical Privity

Answer 21

• the nexus between the burdened possessor with the new possessor.
• requires some non-hostile relationship between A and her successor, A–1.
  
  • e.g. contract, blood relation, or devise.
  • The only time that vertical privity will be absent is if A–1 acquired her interest through adverse possession.

Question 22

Burden Run-Notice Requirement

Answer 22

• A–1 must have had some form of notice of the promise when she took.

Question 23

The 3 kinds of notice

Answer 23

AIR:

• Actual
• Inquiry
• Imputed

Question 24

Actual notice

Answer 24

Successor was literally and actually informed of the existence of the covenant when she took the land.

Question 25

Inquiry and Record notice are both this kind of notice

Answer 25

Constructive Notice This means that they are sometimes imputed regardless of whether the successor had notice.

Question 26

Inquiry Notice

Answer 26

* If the appearance of the premises should have given notice of the presence of the covenant, the successor would be charged with such notice, even though she may not have inspected. * synonymous with “the lay of the land.”

Question 27

Record Notice

Answer 27

* Form of notice that is attributable to parties on the basis of the publicly recorded documents. * If the covenant was properly recorded within A’s chain of title, A–1 would be charged with notice of it, regardles of whether or not A–1 did a title search.

Question 28

Elements needed for the benefit to run

Answer 28

**WITV** * Writing * Intent * Touch and Concern * Vertical Privity Horizontal privity is not needed. Much easier for the benefit to run.

Question 29

Definition of equitable servitude

Answer 29

* Promise that equity will enforce against successors. * Accompanied by equitable relief, e.g. injunctions

Question 30

How to create an equitable servitude that will bind successors

Answer 30

**WITNES** * Writing * Intent * Touch and concern * Notice * ES: equitable servitude Privity is NOT required.

Question 31

implied equitable servitude or common scheme doctrine.

Answer 31

* Maj. of courts allow an ES to be implied in the absence of a writing if the elements of the general or common scheme doctrine are satisfied. * Min. require writing * Example: A subdivides land into 50 lots for residential purposes. Sells lots 1-45 through deeds that contain covenants restricting use for residential purposes. A sells one remaining lot to B, but no covenant is in the deed. B wants to build convenience store. Court can enjoin him.

Question 32

Elements of the general or common scheme doctrine

Answer 32

1. Subdivider had a general scheme of residential development which included Defendant, at the time the sales began. 2. B had some form of notice of the restriction when he took. (AIR) 1. Inquiry notice- the neighborhood conforms to the common restriction + routine inspection would put B on notice 2. Record Notice- Majority says B is not required to look up prior deeds transferred by his grantor. Minority says the opposite, which puts a huge burden on B.

Question 33

Equitable defense to enforcement of equitable servitudes.

Answer 33

Changed Conditions (narrow defense) * Party seeking release from the terms of an equitable servitude must allege changed circumstances so pervasive that the entire area’s essential character has been irrevocably altered * e.g. Neighborhood was once residential but is now commercial * Gradual change or change to a bordering lot is never sufficient