Real Covenants & Equitable Servitudes

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smokyroom26
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Real Covenants & Equitable Servitudes

Postby smokyroom26 » Sat Nov 27, 2010 6:45 pm

So I'm grappling with this concept and I'm having a bit of trouble teasing it out.

To enforce a real covenant, I thought that only vertical privity was required - meaning the person trying to enforce the covenant had to be a successor in interest to the original covenanting parties. Is horizontal privity required as well? I thought that only referred to the original covenanting relationship, and when considering the enforceability of a covenant later you only needed to worry about whether there was vertical privity.

Also, how does this concept connect to Tulk v. Moxhay? I know that case was supposed to have created the equitable servitude, but part of its reasoning focuses on how the original agreement between the parties didn't run with the land (and that's why it needs enforcement in equity). I am not sure why that agreement didn't run with the land, unless I've got the facts wrong, since the original agreement bound covenantor, his heirs and assigns.

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DoubleChecks
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Re: Real Covenants & Equitable Servitudes

Postby DoubleChecks » Sat Nov 27, 2010 6:49 pm

smokyroom26 wrote:Also, how does this concept connect to Tulk v. Moxhay? I know that case was supposed to have created the equitable servitude, but part of its reasoning focuses on how the original agreement between the parties didn't run with the land (and that's why it needs enforcement in equity). I am not sure why that agreement didn't run with the land, unless I've got the facts wrong, since the original agreement bound covenantor, his heirs and assigns.


Have not looked at my notes and I don't really remember, but for Tulk v. Moxhay, I'm pretty sure that was an English case, and during that time period, the agreement between the parties would not run w/ the land because only things between a landlord-tenant would in England (not grantor-grantee).

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vamedic03
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Re: Real Covenants & Equitable Servitudes

Postby vamedic03 » Sat Nov 27, 2010 6:51 pm

smokyroom26 wrote:So I'm grappling with this concept and I'm having a bit of trouble teasing it out.

To enforce a real covenant, I thought that only vertical privity was required - meaning the person trying to enforce the covenant had to be a successor in interest to the original covenanting parties. Is horizontal privity required as well? I thought that only referred to the original covenanting relationship, and when considering the enforceability of a covenant later you only needed to worry about whether there was vertical privity.

Also, how does this concept connect to Tulk v. Moxhay? I know that case was supposed to have created the equitable servitude, but part of its reasoning focuses on how the original agreement between the parties didn't run with the land (and that's why it needs enforcement in equity). I am not sure why that agreement didn't run with the land, unless I've got the facts wrong, since the original agreement bound covenantor, his heirs and assigns.


Too lazy to give you a direct answer, but these are the relevant sections from my outline from last year (I omitted most of my stuff on Equitable servitudes because it doesn't seem relevant to what you're asking):


5. Real Covenants
a. Real Covenant – contractual land use restrictions intended to run with the land (estate) at law (enforced through damages)
i. Reasoning
1. People believe that their property will be worth more if they get the adjacent owner to make an agreement about how to use the land
2. Why not a contract? Contract is only binding on the parties who are privy to the contract
ii. Must be in writing – cannot be implied and cannot be by prescription
iii. Must be privity of estate
iv. Must touch and concern the land
b. Types of Real Covenants
i. Affirmative – obligates owners to perform certain acts
1. Contrast with affirmative easement – in affirmative easement, the dominant tenement has the right to do something; in an affirmative covenant, the servient tenement is obligated to do something
ii. Negative – owners promise to refrain from certain acts
c. Notice
i. Not enforceable against a bona fide purchaser without notice
ii. Enforceable against donees, devisees, and heirs with or without notice
d. Privity of Estate
i. Horizontal privity – privity between the original owners
1. Accomplished through conveyance of interests
a. “Horizontal privity is satisfied when the transaction of which the promise is a part includes a transfer of an interest either in the land benefitted by or in the land burdened by the performance of the promise” Sonoma Development v. Miller
2. Typically accomplished through conveying the deeds to a strawman who conveys them back with the covenant
3. At English common law – had to be a landlord-tenant relationship
ii. Vertical privity – accomplished through conveyance of estate to subsequent owners
e. Running of the benefit
i. Must be intent on the part of the contractors for the benefit to run
ii. No notice requirement
iii. Must touch & concern the land
iv. No horizontal privity requirements
v. Must have vertical privity (must have the same or lesser estate)
f. Running of the burden
i. Must be intent on the part of the contractors for the burden to run
ii. Must have notice (if subsequent bona fide purchaser – no requirement for devisee / donee)
iii. Must touch & concern the land
iv. Majority requires horizontal privity
v. Must have vertical privity (same estate)
g. Adverse possessors – they are not in vertical privity, so the covenant does not run (obtain a new title through action of law)


6. Equitable Servitude
a. Equitable Servitude – a covenant (interest in land, not in an estate), enforced in equity
i. Requirements
1. Parties must intend for it to run with the land
2. Subsequent bona fide purchaser must have notice
3. Must touch and concern the land
4. Horizontal and vertical privity are not required (except for 3d party beneficiaries)
a. Virginia requires horizontal privity for injunction on equitable servitudes arising outside of a general plan
5. Can be implied from a common plan
b. Can provide both negative and affirmative covenants (negative only in England)
c. Origins
i. Tulk v. Moxhay – T conveyed to E in fee Leicester square with a covenant that E would maintain the garden, not cover with building, and surrounding tenants can use square if they pay rent. E conveyed the square to M. Issue arose about whether the burden would run
1. In England, horizontal privity was only satisfied in landlord-tenant relationship
2. In equity, the court balanced the equities
a. Unfair that the purchaser was not burdened by the covenant when it was incorporated into the sales price
b. Enforced through injunction rather than damages
3. Developed the equitable servitude

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smokyroom26
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Re: Real Covenants & Equitable Servitudes

Postby smokyroom26 » Sat Nov 27, 2010 7:25 pm

Appreciate the help, folks, that cleared me up.

solidsnake
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Re: Real Covenants & Equitable Servitudes

Postby solidsnake » Sat Nov 27, 2010 7:25 pm

oh man what i would give to take a 4hr property final over writing a behemoth paper for a seminar.

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GeePee
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Re: Real Covenants & Equitable Servitudes

Postby GeePee » Sat Nov 27, 2010 7:42 pm

Real covenants require both vertical and horizontal privity. The reason why I think you're confused is that horizontal privity is generally trivial -- as long as there is some evidence that the originators of the covenant made an actual agreement, you're okay.

Prior to Tulk v. Moxhay, British Common Law required original horizontal privity (privity of estate; landlord-tenant) between the originators for both real covenants and equitable servitudes. This case shows why that requirement doesn't make any sense: plaintiff had retained residences adjacent to this piece of property and had a vested interest in the land being kept as parkland. This case started transforming the need for privity in equitable servitudes to a requirement of notice. As long as the land records showed existence of this covenant so that the purchaser could make an informed decision to acquire based on the existence of the covenant, the equitable servitude would run as long as the other 2 factors are met.

It seems like your bigger issue is having to do with "running with the land." In order for a covenant to run with the land, it must intend to run, as you said. In this case, the requirement is trivial as it has been outwardly stated. However, the covenant must also touch and concern the land. This awesomely nebulous concept has eluded property scholars for a long time. In general, agreements that address the nature and quality of the land "touch and concern." Although it is interesting that an agreement to provide water a piece of property somehow does not touch and concern (but I digress). This is a fairly clear-cut case of an agreement that touches and concerns the land. A provision that enumerates and restricts the ways in which the owner may use and develop the land does touch and concern.

You didn't mess up the facts of the case, but you did sort of miss the point: notice replaced privity as the requirement for an equitable servitude, and the importance of "touching and concerning" the land was emphasized.

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smokyroom26
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Re: Real Covenants & Equitable Servitudes

Postby smokyroom26 » Sat Nov 27, 2010 8:33 pm

Gee, you're awesome. Many thanks.




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