Calicakes wrote:Can someone please explain horizontal and vertical privity to me in the context of a covenant? For some reason, I'm not grasping this concept.
I'll try, If anyone thinks I got any of this wrong, please let me know. As a warning, this goes way beyond what was mentioned in the lecture, but I think the lecture didn't go into enough detail.
First of all, the questions of horizontal privity and vertical privity are only relevant when you need to determine whether a real covenant "runs with the land." If it "runs with the land," that means subsequent owners can enforce the covenant/have to be burdened by it. Another way of thinking of this is: When does a contractual promise become a property right? Contractual promises won't run with the land, only property rights.
Second, you have to analyze the "running" question separately for the benefit of the covenant and the burden of the covenant.
Third, horizontal privity is required only for determining whether the burden runs with the land (not necessary for the benefit).
Fourth, what is horizontal privity? It's a confusing property relationship between the original covenanting parties. Horizontal privity is present when, at the time the covenant was made between them, the two original parties shared some interest in the land independent of the covenant. Examples of when there is horizontal privity: (1) When a covenant is made in a deed between grantor-grantee; (2) When a covenant is made while one of the original parties had an easement on the other party's land; (3) When a covenant is made during a landlord-tenant relationship; or (4) When neighbors shared a common driveway and made some kind of covenant about that driveway. Examples of what is not sufficient for horizontal privity: (1) A simple agreement between neighbors, where neither had any interest in the other's land. E.g., you enter a contract with your neighbor promising never to have dogs on your property. Even if that contract is binding between you and your neighbor, it won't run with the land, meaning if you neighbor sells his property to someone else, that subsequent owner won't be able to enforce the promise about dogs. (2) When a promise is made after land is conveyed (because, in that case, the grantor and grantee didn't share any independent interest in the land at the time the covenant was made.
Fifth, what is vertical privity? It's a less confusing property relationship between a covenanting party and its successor in interest (i.e., the one he transfers it to). It's analyzed a bit differently when you're looking at the burden vs. the benefit. For the burden to run, the original covenanting party has to transfer his entire estate to the successor in interest. If he does, there's vertical privity. If he transfers less than his entire estate, there's no vertical privity. E.g., If the original burdened covenanting party had fee simple, but transfers only a life estate, there's vertical privity. This means that the original benefitting covenanting party can't enforce the covenant against the successor to the burden. If you're analyzing whether the benefit runs, then vertical privity is much more relaxed. There's vertical privity even if the original party transfers a lesser estate. One more thing to know about vertical privity is that it never exists if the "successor in interest" acquired that interest by adverse possession.
Sixth, remember that you might not always need to analyze both the benefit and the burden. The only time you need to do that is if both the burdened land and the benefitted land have been transferred by the original covenanting parties. So, if A deeds Blackacre to B with a covenant that "B will not use the land for commercial purposes," and then A sells his land to C. Here, you'd only need to analyze whether the benefit runs, because the burden is still in the hands of an original covenanting party. But if B later sells his land to D, then C would only be able to enforce against D if the burden also runs with the land.