1Covenants may be enforceable at law or in equity; the latter are called equitable servitudes.
Classification
2Covenants that are enforceable in equity.
Equitable Servitudes
3Covenants enforceable at law
Real Covenants
4How may covenants be enforceable?
In law or in equity.
5Covenants running at law may be either?
May be either affirmative or negative.
6• This form of privity means that people either have a mutual interest in land or successive interest in land.
• This is needed between the original covenanting parties.
Horizontal Privity
7This form of privity requires a successive interest between original covenanting parties and successive parties.
Vertical Privity
8What forms of privity are required to enforce the burden of a covenant against a successor to the covenantor?
• Both forms of privity are required to enforce the burden of a covenant against a successor to the covenantor.
• But neither is required to enforce covenant to enforce covenant against original covenantor.
9Means there's a mutual interest in land or successive interest in land, regardless of whether it's horizontal or vertical.
Privity of Estate
10For the burden to run at law what do nearly all jurisdictions require?
(1) Nearly all JXs require Horizontal Privity between original covenanting parties.
(a) There's widespread disagreement about what constitutes Horizontal Privity, but generally in U.S. a covenanting party must succeed to an interest in land of the other.
• Examples:
(1) Landlord & Tenant
(2) Grantor & grantee
(3) Promissor & Promissee in connection with granting of an easement.
11Generally, what must there be to constitute horizontal privity in the U.S.?
Generally in the U.S. one of the covenanting parties must succeed to an interest in land of the other, e.g. (LTGGPP)
(1) Landlord & Tenant
(2) Grantor & Grantee
(3) Promissor & Promisee in connection with the granting of an easement.
12What are some examples of a covenanting party suceeding to an interest in land of the other which constitutes Horizontal Privity?
(LTGGPP)
(1) Landlord & Tenant
(2) Grantor & Grantee
(3) Promissor & Promissee in connection with the granting of an easement.
13What's required for the burden to run at law?
(1) Horizontal Privity Original Covenanting parties.
(2) Vertical Privity between Original Covenanting party & Current Estate Holder.
(3) Notice to Burdened Party
(4) Covenanting parties must have intended the burden run with land ("assigns")
(5) Touch & Concern land.
14What's evidence that covenanting parties have intended that the burden run with the land?
It's evidenced by use of the word "assigns".
15How can Vertical Privity between Original Covenanting Party and Current Estate Holder be demonstrated?
(1) By owning the entire estate the original covenanting party owned is in Vertical privity with that party,
(2) If there has been a voluntary transfer of the estate; an involuntary transfer (adverse possession) negates privity.
16How can a burdened party have notice?
(1) Actual Notice
(2) Constructive Notice
(3) Inquiry Notice
17• Notice that's imputed to a person at time existing info would prompt an ordinarily prudent person to investigate issue further.
• Notice where knowledge is imputed to purchaser because diligent investigation would have revealed the info.
Inquiry Notice
18• Notice that's presumed by law to have been received on account of existing facts and circumstances, in contrast to actual notice.
• Can be imputed by recording system.
• If one records his deed, the entire world is given this type of notice w/out actually seeing deed.
Constructive Notice
19• A party's direct knowledge of existing fact or future occurrence.
• Requires the party to be directly informed such as through express statement or direct observation.
Actual Notice
20There's inquiry notice only where:
(1) Investigation arises
(2) Investigation would reveal someone else had prior time.
• Where would areasonable person inquire whether another was first-in-time.
21How is intent evidenced when determining whether the burden runs with land?
Evidenced by use of word “assigns”.
22Explain "the burden must touch and concern the land."
(a) Restatement: In order for the burden to run, both the burden and the benefit must touch and concern the land.
(b) The burden touches and concerns the land if it makes the burdened land less valuable or less useful
(c) An alternate way of stating this is that the burden touches and concerns the land if it can only be performed by the possessor of the burdened land
23According to the Restatement, in order for the burden to run, what must happen?
Both the burden and the benefit must touch and concern the land.
24How does the burden touch and concern the land?
• If it makes the burdened land less valuable or less useful.
• An alternate way of stating this is the burden touches and concerns the land if it can only be performed by possessor of burdened land
25For the benefit to run at law what is required for the benefit to run at law?
(1) Some jurisdictions require Horizontal Privity between original covenanting parties; others Horizontal Privity isn't required for the benefit to run. (Restatement doesn't require Horizontal Privity).
(2) Some jurisdictions require Vertical Privity between original covenanting party and current estate holder; in others Vertical Privity isn't required for benefit to run.
(3) Benefited party doesn't need notice.
(4) Covenanting parties must have intended the benefit run with land.
26Does the Restatement require Horizontal Privity for the benefit to run at law?
No
27How does the benefit touches and concerns the land?
• If it makes the benefited land more valuable or more useful.
• In other words, this is that the benefit touches and concerns the land if it can only be received by the owner of the benefited land.
• Note that the effect of this is that benefits in gross will not run with the land.
28Covenants that may run with the land include covenants to:
(1) Pay Rent.
(2) Pay property taxes.
(3) Not to assign or sublease.
(4) Supply water, heat, or electricity to property.
(5) Build buildings on property.
(6) Insure buildings on property.
(7) Refrain from selling alcoholic beverages on property.
(8) Give an option to purchase the property.
29Covenants that will not run with the land include covenants to
(1) Pay taxes on some other property.
(2) Pay a promissory note of the covenantee.
(3) Refrain from competing with the grantor’s business.
30Under what case, would the obligation to enforce contracts run as an equitable servitude rather than as a real covenant?
When an HOA is designated as a subdivider's agent for enforcing contracts.
31Can a HOA be designated as an agent to enforce covenants even after the subdiver no longer owns any benefited parcels and even though HOA owns no land?
Yes,
32Can a subdivider designate a HOA as its agent to enforce covenants?
Yes, and HOA may do so even after subdivider no longer owns any benefited parcels and even though HOA owns no land.
33What are some ways covenants running with the land may terminate in the same ways as easements, profits and equitable servitudes?
(a) Release by the benefited tenant
(b) Merger of the burdened and benefited parcels
(c) Condemnation
(d) Abandonment
(e) Involuntary destruction of burdened or benefited property
(f) Prescription
(g) Estoppel
34Termination of covenants running with the land:
(1) Covenants running with land may terminate in same ways as easements, profits and equitable servitudes.
(2) Covenants enforceable in equity: equitable servitudes.
35What happens when a covenant is enforceable by many persons (that is, benefits many properties)
• The release by the original covenantee does not affect the rights of other covenantees.
• In other words, when a subdivider releases one property owner in the subdivision from a restrictive covenant, the rights of other property owners in the subdivision are unaffected.
36Covenants enforceable in Equity
Equitable Servitudes
37Covenants enforceable in equity: Equitable Servitudes
(1) In a minority of states affirmative servitudes won't be enforced; negative servitudes are enforceable in all state.
(2) For an equitable servitude to run, neither horizontal nor vertical privity is required
(3) Notice is generally presumed, but an equitable servitude cannot be enforced against a BFP for value w/out notice.
(4) For either benefit or burden to run with land, original covenanting parties must've intended that it run.
(5) The burden of an equitable servitude may run even if the benefit does not touch and concern the land (Restatement).
(6) However, burden of an equitable servitude must touch and concern the land in order to run with land.
(7) An equitable servitude won't be enforced if its purpose is illegal, unconstitutional or contrary to public policy.
(8) An equitable servitude may not be enforced if.
(9)Termination of equitable servitudes.
38What must original covenanting parties have done for either beenfit or burden to run w/ the land?
The original covenanting parties must have intended that it run.
Intent may be presumed where a common grantor has a general plan to develop a residential subdivision:
(1) If the owner of the two or more appropriately situated lots sells one.
(2) W/ restrictions of benefit to the land retained.
(3) Then servitude becomes mutual.
39How may intent be presumed where a common grantor has a general plan to develop a residential subdivision?
(1) If the owner of the two or more appropriately situated lots sells one.
(2) W/ restrictions of benefit to the land retained.
(3) Then servitude becomes mutual.
40Can the burden of an equitable servitude run even if benefit doesn't touch and concern land?
Yes (Restatement)
Common law: Burden won't run in equity if benefit is in gross
41What is common law approach for if burden of an equitable servitude runs even if it doesn't touch and concern the land?
Under the Common law, the burden won't run in equity if benefit is in gross.
42Can an equitable servitude be enforced against a BFP for value w/out notice?
No, an equitable servitude cannot be enforced against a BFP for value w/out notice.
43Are horizontal or vertical privity required for an equitable servitude to run?
No, neither horizontal nor vertical privity is required for an equitable servitude to run.
44Will an equitable servitude be enforced if its purpose is illegal, unconstitutional or contrary to public policy?
No, it won't be enforced.
45An equitable servitude may not be enforced if:
(1) Granting relief would do more harm than good.
(2) Granting relief prayed for would be futile.
(3) Claim is barred by laches.
46Termination of equitable servitudes:
(1) May terminate in same ways as easements, profits and covenants running w/ land.
(2) May also terminate because of changes in neighborhood conditions rendering it impossible to fulfill purpose of restrictions
(a) Change must affect entire subdivision and not merely border lots.
(3) (Majority rule) Changes in zoning do not invalidate equitable servitudes inconsistent with zoning ordinance, unless neighborhood conditions have changes so greatly as to render servitude meaningless.
47How are Equitable servitudes similar to easements, profits, and covenants running with the land?
May terminate in same ways as easements, profits and covenants running with land such as:
(a) Release by the benefited tenant
(b) Merger of the burdened and benefited parcels
(c) Condemnation
(d) Abandonment
(e) Involuntary destruction of the burdened or benefited property
(f) Prescription
(g) Estoppel
48How may Equitable servitudes terminate?
May terminate in same ways as easements, profits and covenants running with land such as:
(a) Release by the benefited tenant
(b) Merger of the burdened and benefited parcels
(c) Condemnation
(d) Abandonment
(e) Involuntary destruction of the burdened or benefited property
(f) Prescription
(g) Estoppel
49Majority and Minority on how Equitable Servitudes are terminated:
(Minority) Equitable Servitudes may also terminate b/c of changes in neighborhood conditions rendering it impossible to fulfill the purpose of restrictions, and change must affect entire subdivision, not just border lots.
(Majority rule) Changes in zoning don't invalidate equitable servitudes inconsistent w/ zoning ordinances, unless neighborhood conditions have changed so greatly to render servitude meaningless.
50Obligates a person to act.
Affirmative Covenant
51Prohibits a person to act.
Negative Covenant