P: ReelC & EServ
Terms
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- The (5) elements most often said to be required for covenants to run at law are
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1. Touch and concern the land
2. Intend for it to run
3. Some form of privity (Horizontal &/or Vertical)
4. Some require it to be in writing (where SOF needs to be satisfied)
5. Some also require that the party charged must have notice (actual notice, record notice, inquiry notice, or imputed notice). - Describe Touch & Concern
- The burden of the covenant must relate to use of the land. A covenant is less likely to “touch and concern†as its connection to physical use of the land diminishes.
- Name the Two tests for Touch and Concern
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1. Economic Concern Test
2. Restatement test - Describe the Economic Concern test for touch and concern
- The Test considers whether performance of the covenant will tend necessarily to enhance the value of the land or render it more convenient or beneficial to the owners or occupants.
- What are the two facts to determine when using the Economic Concern Test?
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i. If the covenantor's (this is the promisor, or the one who promises to do something) legal interest in land is rendered less valuable by the covenant's performance, then the burden of the covenant satisfies the requirement that the covenant touch and concern land.
ii. If the covenantee's legal interest in land is rendered more valuable by the covenant's performance, then the benefit of the covenant satisfies the requirement that the covenant touch and concern land. - What are the 3 types of privity in land relating to real covenants and equitable servitudes?
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Mutual Privity
Horizontal Privity
Vertical Privity - What is required in mutual privity?
- That the original parties have had a mutual adn continuing interest in the same land (landlord&tenant or an easement)
- What is required in horizontal privity?
- That the covenant be made in connection with the conveyance of an estate in fee from one of the parties to the other. This is from the grantor to antoher person - and it need only happen once.
- How do you determine if horizontal privity exists?
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You only consider the relationship between the original parties to the promise.
It exists when teh covenant is incident to a conveyance of an interest in the burdened property.
Horizontal privity is absent if two property owners simply agree to restrict the use of their respective properties. - What does vertical privity require?
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That the person presently claiming the benefit, or being subjected to the burden, is a successor to the estate of the original person so benefited or burdened.
VP exists when the present owners of the burdened land and benefited property have a certain relationship to their predecessors in interest.
In order for a burden to run with the land, and assignee must acquire the entire interest in the estate - Under the modern view, which privity is required for the covenant to run with the land?
- No more than vertical privity is required.
- Why is a writing typically required in a real covenant?
- B/c almost all courts view real covenants as an interest in land.
- When are oral covenants enforceable?
- If one of the standard exceptions to the SOF can be proven (Estoppel, part performance)
- What damages are available for breach of a real covenant?
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Damages equal to difference between fair market value of property before and after Defendant's breach.
Almost any real covenant can alternatively be enforced as an equitable servitude, thus allowing injunctions - Explain why a homeowners' association might not be recognized as having a covenant that runs with the land
- A property owners' association technically owns no interest in property, and therefore doesn't have standing to enforce a covenant that runs with the land (no t & c)
- Explain why a homeowners' association can be found to have a covenant running with the land.
- Court may recognize a corporate entity, created solely for purpose of advancing common interests of property owners, as havin gstanding to bring suit to enforce covenant that runs with land. Also, payment of dues can also be said to touch and concern land.
- How can a covenant that runs with the land be terminated?
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i. If there is a fixed period
ii. Parties agree to release each other
iii. Eminent domain
iv. When one party acquires ownership of all land benefited and burdened (merger doctrine)
v. Anti-discrimination statutes
vi. Abandonment
vii. Changed conditions: when the intended benefits of the covenant can no longer be realized - Explain how abandonment works to terminate a real covenant and by what standard it is judged
- When the conduct of the person entitled to the benefit of the covenant demonstrates that intent to relinquish their rights. It is found when the average person readily observes sufficient violations so that they will logically infer that the land owners neither adhere to nor enforce the restrictions
- Explain 3 ways in which real covenants differ from Equitable Servitudes
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1. Traditional remedy for breach is damages while ES is injunction
2. Requirements for ES are far easier to satisfy
3. Narrow defenses available - What is an equitable servitude?
- The primary modern tool for enforcing private land use restrictions. It evolved b/c the RC failed to satisfy need for an effective method of binding successor owner to promises made by their predecessors
- What are the required elements for ES?
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Touch and Concern (benefit/burden)
Intent that it runs w/ land
Writing or implied from "common plan"
Notice (actual/constructive) - How does touch and concern operate in ES's?
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Same analysis as in RC
NB: a grantor can't create a covenant for benefit of a lot that he has previously conveyed unless the benefited lot falls w/ the geographic boundaries of a pre-existing scheme of development - What are the different methods by which one may receive notice in an equitable servitude?
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i. Actual notice
ii. Record notice
iii. Imputed notice: When a purchaser's visual examination of the premises clearly indicates that lots are occupied in strict accordance with a general plan, he has constructive notice that a reciprocal negative easement may exist and is under a duty to make certain inquiries.
iv. Inquiry notice: by looking around and then you have to search further – see General Scheme Doctrine.
v. If you take with notice you are bound to the covenant. However, if you can prove there was no notice, you are not bound. - Why is there a writing requirement for equitable servitudes?
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i. Where SOF is enforced: an equitable as well as a legal interest in land must be evidenced by some sufficient instrument in writing or it is unenforceable.
ii. This requirement can be waived when the general scheme is applied - What is the rationale behind the common scheme doctrine?
- i. Rational: Notice may be found when one has a view of the premises on the street, clearly indicating the residences were built and the lots occupied in strict accordance with a general plan, the buyer is put to inquiry, and constructive notice will be found, for had he inquired he would have found of record the reason for such general conformation.
- How is a common scheme established?
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i. Rational: Notice may be found when one has a view of the premises on the street, clearly indicating the residences were built and the lots occupied in strict accordance with a general plan, the buyer is put to inquiry, and constructive notice will be found, for had he inquired he would have found of record the reason for such general conformation.
NB: in order for a common scheme to be found, it must be present at the creation of the subdivision - What conditions mustbe met for grantees of plots of subdivided land to enfroce restrictive covenants against each other, regardless of whether the covenant was expressly in deed or not?
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1. The subdivision was carried out pursuant to a general scheme.
2. The grantees seeking enforcement purchased their lots in reliance on their right to enforce the restrictive covenant.
3. The grantee against whom enforcement is sought had actual or constructive notice that the land may be subject to a restrictive covenant. - What happens when not all the grantor's land is divided at the same time in a common scheme?
- 1. If there is a scheme of restrictions existing when the sale of lots begins which includes both the prior purchasers' land and the grantor's remaining unsold land, the prior purchasers acquire a right to enforce the restrictions against subsequent purchasers. However, the individuals seeking to enforce the restrictions must bear the burden of proving the existence of a scheme of restricted usage
- What are the damages for the breach of an ES?
- Equity/Injunction (remove what violates the covenant)
- Explain how equitable servitudes can be terminated.
- See RC termination
- What do courts consider when determining whether building restrictions constitute use restrictions on the land itself?
- the location and character of the entire tract of land, the purpose of the limitation, whether it was imposed for the sole benefit of the grantor or for the grantee and subsequent purchasers as well and whether the restriction is pursuant to a general building plan for the development of the property
- What constitutes a change in conditions for RC's and ES's?
- when the intended benefits of the covenant can no longer be realized
- Can amended deed restrictions be more restrictive than those contained in original deed restrictions?
- Yes
- When are amended deed restrictions inapplicable to a lot owner?
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they are inapplicable to a lot owner who has, prior to the amendment:
1. committed himself to a certain land use which the amendment seeks to prohibit, provided the lot owner both justifiably relied on the existing restrictions (i.e., had no notice of the proposed amendment), and
2. will be prejudiced if the amendment is enforced as to his lot - What is the effect of a reservation by the grantor of a right to amend or annul restrictive covenants?
- It makes the covenants personal between the grantor and his individual grantees. Therefore, the covenants do not run with the land, and one grantee may not enforce a covenant against another. This is due to the lack of mutuality or reciprocity so necessary to create a covenant which will run with the land and inure to the benefit of all subsequent owners. However, another court viewed this to be okay, so long as the reservation is used reasonably
- When is a covenant mandating the prior approval of an architectural control committee as to the appropriateness of erecting or placing a building on a lot enforceable?
- So long as the intention of a covenant is clear, even absent specific guidelines for the committee, when a refusal to grant approval is reasonable, made in good faith, and is neither arbitrary nor capricious (impulsive and unpredictable)
- What is a landowner's remedy if a homeowner's association, or equivalent, refuses to enforce a restrictive covenant?
- The individual owner may bring suit to enforce it, or force the association to file suit
- When should a restriction be enforced against border lots?
- i. Even upon substantial changes surrounding a schematic development, if the benefits of the original plan for a restricted subdivision can still be realized for the protection of the interior lots, the restriction should be enforced against the border lots, notwithstanding that such lot owners are deprived of the most valuable use of their lots
- What is the policy behind enforcing restrictions on border lots?
- ii. The policy behind the above is that interior lots continue to receive substantial benefit from the restriction, even if the border lots are harmed
- When will the defense of changed conditions allow restrictions to not be enforced against border lots?
- the defense does apply if changed conditions outside the subdivision are so substantial and widespread that all lots in the subdivision are adversely affected to the point that the benefits of restrictions cannot be realized