PROPERTY OUTLINE- WATSON 2005 Fall
Chapter 6: REAL COVENANTS AND INEQUITABLE SERVITUDE
A. Real Covenants – A real covenant is a covenant that runs with the land at law. It is enforceable at law by a successor owner of the promisee’s land and, concomitantly, is enforceable against a successor to the promisor’s land. If the P wants money damages, the P must show that the covenant qualifies as a real covenant.
A. Personal Liability – A real covenant gives rise to personal liability only. It is enforceable only by an award of money damages, which is collectible out of the general assets of the D.
B. Equitable servitude distinguished – An equitable servitude is a covenant enforceable in equity by or against successors to the land of the original parties to the contract. Hence, if the P wants equitable relief, the P must show that the covenant qualifies as an equitable servitude. Different rules may be applicable to the enforcement of covenants in equity than are applicable in law.
C. Condition- Distinguish- Land use maybe controlled by a condition as well a by a covenant. Condition provides for forfeiture upon breach of the condition, whereas a covenant is enforceable only by an award of money damages (real covenant) or an injunction (equitable servitude). i.e. such as a FSD or a FS subject to Condition subsequent.
2. Creation (1st element, promise must be valid)
A. Writing required – At common law a real covenant had to be in writing and under seal. The requirement of a seal has been abrogated, but a writing is still required. Note that real covenant will not be implied, nor can it arise by prescription.
B. Grantee bound without signing – Most deeds are signed only by the grantor. Such a deed is known as a deed pool. By accepting a deed poll, the grantee is bound by any covenants in the deed to be performed by the grantee.
3. Enforcement By or Against Assignees (The PR and PE must intend that the promise run with the land) – Major issue is whether the burden of the covenant will run to successor owners of the promisor’s land. It is also sometimes an issue whether the benefit will run to successor owners of the promisee’s land. Burdened tract analogous to the servient tenant under easements. Similarly, the benefited tract is analogous to the dominant tenant. Easements run to successive owners of the tract because easements are interests in land. Covenants, on the other hand, did not start out as interests in land, but rather only as promises concerning the use of land, and so courts laid out different rules for when these promises run to successors.
A. Requirements for burden of covenant to run at law – Requirements for the burden to run are:
1) The contracting parties must intend that successors to the promisor be bound by the covenant.
2) There must be privity of estate between the original promisor and promisee as well as privity of estate between the promisor and his assignee.
3) The covenant must touch and concern the land; and
4) A subsequent purchaser of the promisor’s land must have notice of the covenant.
B. Requirements for benefit of covenant to run at law – Requirements for the benefit to run are:
1) The parties must so intend
2) Some form of privity of estate may be required; and
3) The benefit must touch and concern land owned by the promisee.
C. Intention of the parties – The original parties must intend that the covenant bind the promisor’s successor. The intention of the parties that the burden and benefit run is usually found in the langua
ss it was tied closely to the land. Traditional view is that covenants to pay money (ie. Property taxes, homeowners association fees) do not touch and concern. However, T’s promise to pay rent was uniformly held to touch and concern. Modern courts have relaxed the traditional approach. There is a clear trend toward holding that monetary payments related to land do touch and concern. Clearest example is covenant to pay homeowners association dues.
F. Privity of estate
1) Horizontal privity – relationship between the original contracting parties
a) Running of the burden – For the burden of a covenant to run to assignees, the traditional rule is that the original parties to the covenant must be in privity of estate.
1] English view – Parties to the promise are in privity of estate only if they are in a landlord-tenant relationship. Judges wanted to curtail restrictions on a fee simple.
2] Mutual interest – MA and a few states took the position that what put the parties in privity of estate was the fact that the landlord and the tenant both have an interest in the property. Applying this view of privity to covenants, the burden will run if one party has an interest (apart from the covenant) in the land of the other.
3] Successive relationship (Majority) – Covenant must contain a conveyance of an interest in land. Applying this to covenants, privity of estate is present where the promise is contained in a