Real Covenants & Equitable Servitudes Template

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Equitable Servitudes

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An equitable servitude is essentially a real covenant but is enforced in equity. An equitable servitude must be in writing unless it is a negative servitude (one that prohibits a certain behavior).

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Negative Equitable Servitude

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A negative equitable servitude is one that may be implied from a common plan or scheme for the development of a residential subdivision, so long as landownders have notice of the agreement.

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Common Plan or Scheme

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A common plan or scheme means that the developer intended that all parcels would be bound by the restrictive covenant. This may be evidenced by, among other things,: (1) a recorded plat; (2) a general plat of restrictions; or (3) oral representations to early buyers. [IFH]

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Notice

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To be bound by an implied equitable servitude (or covenant not contained in a deed), a grantee must have had notice of the covenant generally, which means notice that the covenant was contained in the deeds of others. Notice can be actual, constructive, or inquiry.

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Notice continued, Types of Notice

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In this context, actual notice means the grantee was directly informed of the existence of the covenants. Record notice means that a deed in the grantee's chain of title contained the covenant or promise (even though the grantee;s deed did not). Inquiry notice means that the neighborhood obviously and clearly conforms to the specifications and restrictions of the covenant. [IFH]

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Requirements for the Burden of an Equitable Servitude to Run

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In order for the burden of an equitable servitude to run with the land, the elements of intent, notice and touch and concern must be met.

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Intent

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The original covenanting parties must have intended that the successors in interest be able to enforce the covenant. This intent is usally found in hte language of the orignial agreement. [IFH]

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Touch and Concern

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A covenant touches and concerns the land when it directly relates to the use and enjoyment of the land (in either a negative or positive way). [IFH]

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Requirements for the Benefit of an Equitable Servitude to Run

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In order for the benefit of an equitable servitude to run with the land, the elements of intent and touch and concern must be met.

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Remedies for Breaches of Equitable Servitudes

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Because equitable servitudes are covenants enforced in equity, only equitable remedies are available. The usuale remedy for an equitable servitude is injunctive relief.

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Defenses to Breach of Equitable Servitudes

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Because an equitable servitude is a creation of equity, all of the common equity defenses apply.

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Unclean Hands

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The defense of unclean hands can be asserted against any plaintiff landowner who has engaged in the same prohibited activity as the defendant. [IFH]

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Acquiescence

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The defense of acquiescence can be asserted if the plaintiff landownder failed to complain or object when another third-party landowner (not named in the action) engaged in the same prhibited activity as the defendant. [IFH]

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Estoppel

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The defense of estoppel can be asserted against any plaintiff landowner who acted in a way that led his or her neighbors to rely on the belief that he would not complain of the prohibited activity. [IFH]

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Laches

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The defense of laches can be asserted against any landowner who does not bring suit within a reasonable time. [IFH]

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Termination of an Equitable Servitude

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An equitable servitude may be terminated by: (1) written release from the benefit holder or holders; (2) merger of the benefited estate with the burdened estate; or (3) condemnation of the burdened property. [IFH]

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Real Covenants

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A real covenant is a written promise concerning the use of real property. Real covenants are either affirmative(a promise to do something) or negative/restrictive (a promise not to do something). Every real covenant has two sides -- the burden side and the benefit side. The burden is the duty to perform and the benefit is the privilege of forcing another party to perform.

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Real Covenants Pt 2

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Real covenants may run with the land, which means that subsequent owners of land may be able to enforce them or be burdened by them, so long as certain requirements are met. These requirements change, depending on whether the burden is being enforced or the benefit.

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Requirements for Burden of RC to Run

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In order for the burden of a real covenant to run with the land, certain elements must be satisfied. Those are notice, intent, touch and concern, vertical privity, and horizontal privity.

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Notice (RC)

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Under the common law, a subsequent purchaser of land was subject to the burden of a covenant regardless of whether he or she had notice. Modernly, however, recording statutes have modified the requirements so that a BFP who has no notice of the covenant, and who records his or her own deed will not be bound by it. There are three types of notice: actual notice, constructive notice, and inquiry notice.

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Actual Notice (RC)

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Actual notice refers to direct knowledge of the covenant. [IFH]

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Constructive notice (RC)

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Constructive notice is notice given to the public at large by virtue of the covenant being recorded with a public official. Constructive notice is often called record notice. [IFH]

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Inquiry Notice (RC)

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A party is said to have inquiry notice when a reasonable inspection of the land would have revealed the covenant. [IFH]

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Intent (RC)

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The original covenanting parties must have intended that the successors in the interest be able to enforce the covenant. This intent is usually found in the language of the original agreement. [IFH]

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Touch and Concern (RC)

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A covenant touches and concerns the land when it directly relates to the use and enjoyment of the land (in either a negative or positive way). [IFH]

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Vertical Privity (RC)

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Vertical privity exists between the original party to the covenant and the subsequent owner. In order ot be bound by the covenant, the successor must hold the entire estate in land held by the original party. [IFH]

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Horizontal Privity

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Horizontal privity requires that at the time the original parties enered into the agreement, they shared some interest in land, independent of the covenant (e.g. landlord and tenant, morgageee and mortgager, dominant estate and servient estate in an easement, etc.). [IFH]

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Reuirements for the Benefit of a RC to Run

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In order for the benefit of a covenant to run with the land, certain elements must be satisfied. Those are: intent, touch and concern, and vertical privity.

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Remedies for Breaches of Real Covenants

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A breach of a real covenant warrants only an award of monetary damages. If an equitable remeidy is sought, the promise is no longer enforced as a covenant, but instead is enforced as an equitable servitude. [IFH]

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Termination of a Real Covenant

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A covenant may be terminated by: (1) a written release; (2) the merger of the benefited and burdened estates; or (3) the condemnation of the burdened property.