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24 Cards in this Set

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  • Back
When you think REAL COVENANT
think damages...
breach of a real covenant renders the violator liable for damages, breach of a condition causes a forfeiture of estate
Examples of real covenants
a right to an unobstructed view over your neighboyr's land (a negative easement) is funcitonally identical tp a promise by your neighbor not to obstruct your view (a real coveannat) While courts are reluctant to create negative easements they may enforce the promise as a real covenant.
is a covenant abou tland use tha twill be enforced in equity by an injunciton against a successor to the burdened estate who acquired it with NOTICE of the covenant. A covenant need not meet all the criteria of a real covenant to be enforeceable as an equitable servatude. Covenants are more commonly enforced as equitable servituges than as real covenants because they are easier to enforce by or against successors and most people prefer enforcement of a covenant by injuction.
What is the Difference between real covenants and equitable servitudes?
a. Remedy- RC is enforceable at law by an award of money damages. An equitable servitude is enforceable in equity by an injunction

b. No Privity NEEDED for ES

C. ES can be created by implication in many jurisdicitons
because they are interest in land the S of F requires that they be created in a writing signed by the promisor, bu tacceptance of a deed containing a promise made by the grantee of the deed suffices eventhough the grantee does not sign the deed. There is one EXCEPTION-- many states permit NEGATIVE equitable servitudes (a promise to refrian from using one's land in a specified fashion) to be created by IMPLICATION when there is a common scheme of residential development.
Example of the Exception to the creation of the ES rule

- many states will imply a negative equitable servitude where a real estate developer sells lots in a subdivision on the promise that all the lots will be burdened with the same use restrictions (single family resideces only) and later fails to carry through on the promise to burden all lots.
The Michigan court agreed that an injunction was proper, reasoning that because the initial restrictions imposed by McLaughlin, the developer were “for the benefit of the lands held by McLaughlin to carry out the scheme of a residential district” an implied reciprocal servitude burdened McLaughlin’s retained property and that servitude was equitably enforceable against McLean, who was on INQUIRY NOTICE form the “uniform residence character given the lots by the expensive dwellings thereon” that Lot 86 might be burdened by a covenant restricting it to residential use.
For the Servitude to be implied there must be a general plan..
Courts sometimes call the covenant so implied a reciprocal negative easement, although the term implied reciprocal covenant is more accurate. Whatever the label it is (1) reciprocal (the common scheme contemplates covenants burdening all lots for reciprocal benefit) and (2) negative (it restricts land use rather than requiring affirmative acts or use. Although not an easement it is in the nature of an easement because an equitable servitude is an interest in land. For an implied reciprocal covenant to be implied the following elements must be present
A. Reasonably uniform for all lots of same character
B. Permits inference that purchasers relied on that pland and that others would be bound to same promise they made
C. Must exist at sale of first lot of subdivision to bind all lots.
What happens if a developer conveys land without use covenants before the common scheme beginst
no reciprocal covenants will be implied.
Courts will imply reciprocal covenants only when the substance of the covenant is
negative- limiting the use that may be amde of the proprety rather than requireing some positive act on the part of the owner of the burdened land.
Enforcability by or against sucessors:
1. Intent- same as RC
2. Privity not requried
3. Notice- as with real covenants, a purchaser who pays real valued for an estate and has NO NOTICE of the servitude is not bound by the servitude. Notice can be actual or constructive. Constructive notice comse through the record- public records of real estate titles- but can also be the product of circumstances that should trigger inquiry on the part of the buyer (like in sanborn)
4. Touch and concern- the meaning of touch and concern is the same for ES also look at restatement 3d property
Enforceability by third parties
Sometimes the benefit of a covenant is sought to be enforced by a person who is neither a successor to the covenant nor a successor to land benefited by the covenant, but who was intended to be the beneficiary of the covenant.
; any third-party beneficiary can enforce if intended by contracting parties (contrast common law re easements
Is a third party beneficiary able to sue to enforce the benefit of the covenant?

Neoposit Property vs Emigrant
O purchases lot 1 from F, under a deed that says O can use for residential purposes only and states the benefit is for lot 2 (owned by F) and lot 3 (owned by C, who purchased it from F in a prior trasaction) Can C enforce the covenant? There is no vertical privity because C has not succeeded to any interest of F after the benefit was created. Restatment provides that a covenant may be enforced by such third personas as are also beneficiaries of the promise". O builds a gas station on lot 1.

Cases involveing 3rd party beneficiaries to enforce covenants arew almost always suits in equity, thus involving equitable servitudes, not RC.

In this case the court held tha thomeowners associaiotn that did not succeed to any estate of the benefited promisee was able to enfroce the benefit of such a a covenant on the theory tha tit was the corporate agent of the owners of benefited estates.
The third restatement
eliminates vertical privity with respect to the running of both benefits and burdens of negative covenants but retian vertical privity for the running of both benefits of affirmative covenants.
Restatement: Touch and concern the land
- the meaning of Tc is the same for ES and RC
- holds that a servitude is valid unless it is illegal or unconstiutional or violates public policy
- examples:
1- arbitrayr, spiteful and capricous
2- unrasonably burden a fundamental constitutional right

3- impose an unreasonable restrain on alineation

4- impose an unreasonable restrain on trade or competition

5- are unconscionable

though courts have no fully embraced the third restatement it is still necessary to look at T and C
Essential meaing of touch and concern
focuses on the effect of the covenant does it depress the lavlue of the burdened land and increase the value of the benefited land? Looks at the marketplace vlaues to determine this.
Does it beneif physical use and enjoyment?

FIRST RESTATEMENT: burden won't run if obviously greater than benfit given
Touch and concern:
Negative Covenants
NC almost always touch and concern the burdened land, because their nature is to restrict land use.
The same holds true for coveanants against competition
Touch and Concern:
Affirmative Covenants
Since courts are reluctant to enforce affirmative covenants they used the elements of touch and concern to express their reluctance. An affirmative covenant that fails to address the economic external costs of land use is almost certainly one that does not touch and concern land.
Touch and Concern:
Neoposit v. Emmigrant

(this note card goes after essential meaning of touch and concern)
Held that the covenant to pay money annually to a homeowner’s association for the purpose of maintaining private roads and sidewalks by all owners touched and concerned the burdened estate in this case. It was concluded that the covenant” affects the legal relations, advantages and burdens, of the parties to the covenant as owners of particular parcels of land and not merely as members of the community in general.
Affirmative Covenants:

To pay money
the most common coventn is one requiare payment of fees to a homeowner's association for the maintenants of common areas and facilities. They are held to touch and concern land so long as the services produced by the payments enhance the value of the burdened land.
Example of Affirmative Covenant:

Neposit v. Emigrant
Is the facility pfart of a common plan of development? Is the facility in close proximity to the burdened land? Is the facility open to common use of all burdened property owners?
 When a neighbor moves out can you put a covenant on there land? As a third party beneficiary I can get an injunction if he moves within 10 feet
. The strick requirement of privity does not exist anymore. The Supreme Court, Appellate Division, Halpern, J., held that owner of neighboring land, for whose benefit restrictive covenant is imposed by grantor, may enforce covenant as third-party beneficiary despite absence of any privity of estate between grantor and him.
Reversed and summary judgment denied.
Affirmative Covenants:

Caullet v. Stanley Stilwell
Stanly Stilwell sold a building lot to Caullet under a deed by which Stilwell reserved “the right to build or construct the original dwelling or building” on the lot.

The NJ court held that the covenant was unenforceable because it did not touch and concern cullett’s land. The promise did nothing to restrict land usage except in “the very incidental fashion” of precluding Caullett form construction unless Stilwell derived the builder’s profit, making this “at best a personal arrangement.. designed to ensure a profit” for stilwell. There was no negative externality of Caullett’s land use that the promise was designed to control.

As an alternative, occasionally a court will enforce an affirmativce covenant by creative remedies that resemble enforcement of a negative covenant.
Common Interest Communities:

Covenants recorded in the master Deed
A condo development will have recorded mater deed in which the use restrictions that pertian to each unit are recited: thus, any purchaser of a condo unit has constructive notice of such covenants. Some states feel that covenants should generally be enforceable unless they are unreasonable.
Common Interest Communities:

Narhstedt v. Lakeside Village Condos
The recorded master deed to Lakeside Village, a condo development in Los Angeles, said that no animals “shall be kept in any unit.” Nahrstedt purchased a unit and moved in with her three “noiseless” cats. The homeowners association demanded their removald and fined her. She argued that not having animals was an unreasonable covenant.

The court concluded that the restriction was not unreasonable because it did not violate a fundamental public policy and was not wholly arbitrary, and did not impose a burden that far outweighs any benefit.” Because the covenant was a recorded use restriction of which Narstedt had constructive notice of and it was presumptively reasonable,” the burden being placed on the challenger to demonstrate that the covenant’s “effects on the project as a whole” rather than on the individual homeowner was unreasonable.
- It is going to look like the neponsit case, where they give the right to enforce the damages/injunction to the homeowners or corporation
- ON a case by case approach do the cats break the spirit of the rule. Do the presence of the cat violate that rule.
- Pg. 930 you first have to know where this is infact a covenant that runs with the land. If so, then we ask if it violates the statute. It is possible that theses communities do have covenants that could run with the land, but they must also be unreasonable.
- Does this Touch and Concern? Yes it it a negative covenant. It affects your rights as property owners. Just cause it T and C does not mean that it is going to be enforced. We want to make sure that we are not over doing it and having too many standards.