Property question - Covenants

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pdwannabe

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Property question - Covenants

Postby pdwannabe » Sun Feb 19, 2017 5:47 pm

can someone explain when covenants are enforceable? i dont really get the concepts of horizontal vs vertical privity and when something touches the land or doesnt touch the land. and when notice makes it enforceable or doesnt

basically does anyone have an easy explanation for this

pdwannabe

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Re: Property question - Covenants

Postby pdwannabe » Sun Feb 19, 2017 5:51 pm

also what in the world is an equitable servitude

jir92

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Re: Property question - Covenants

Postby jir92 » Sun Feb 19, 2017 5:54 pm

pdwannabe wrote:also what in the world is an equitable servitude


Basically, don't need privity and remedy is injunction (as opposed to covenant = money damages), so the threshold to obtain a remedy under an equitable servitude is lower.

hirkaismyname

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Re: Property question - Covenants

Postby hirkaismyname » Sun Feb 19, 2017 6:59 pm

Horizontal - buyer/seller relationship (usually consideration)
Vertical - Father/son relationship (property passing via devise)
Touch & Concern - the benefit of the cove can only be proferred by its holder and in turn the person burdened by the cove can only comply to such cove (50 lot (5 acre) subdivision with 1 (10 acre) lot in the subdivision belonging to the owner; owner sells all lots but retains the 10 acre lot to have a water tower (pipes were inlaid into the ground to all the surrounding lots prior to their sale), the covenant is included in the master plan + deed = Buyer has notice, there is horizontal privity, and it touches & concerns the land bc only the owner of the lot can be burdened by the cove's provisions, which are enforced by the owner of the water tower = T&C. -- thus, enforceable. Usually, either the owner of the benefitted land can enforce cove to anyone choosing to go against the cove's restrictions; and surround owners can also enforce cove if master plan recorded (constructive notice), or surrounding lots are uniform in nature (no commercial bldgs in hood/all single fam units) thus inquiry notice.

Further, strongest argument against not being enforced are: no notice, change in surrounding hood, or zoning changes; BUT, when zoning changes and restrictive covenants are benched to each other, then the "strictest" form of restriction on the land trumps (zoning allows 150 set-back, vs cove says no more than 50 ft set-back).

YalteseFalcon

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Re: Property question - Covenants

Postby YalteseFalcon » Sun Feb 19, 2017 7:57 pm

I'll just add to the above explanation. This area was (is) tricky for me too.

Covenants.

The BURDEN of the covenant runs with the land when:
1) There's a writing.
2) There is an intent by original parties that it will run with the land.
3) The covenant touches and concerns the land.
4) There is horizontal and vertical privity. Horizontal privity is measured between the original people who created the covenant. NOT the new person who bought the land later, and now seeks to enforce it. HP exists when the original parties had some sort of legal relationship connected to the land (landlord-tenant, for example. But, I believe it is also sufficient that they entered into a contract with respect to the covenant.). Vertical privity, on the other hand, refers to the new parties who moved into the picture and are now questioning the applicability of the covenant. VP is found if the original contracting party to the covenant is their "vertical" predecessor in interest to the land.
5) There is notice to the party to be bound.

The Barbri lecture sums this up nicely with the acronym of WITHN.

The BENEFIT of the covenant runs with all of the above requirements, except there is no need for horizontal privity or notice. Just vertical privity. So, WITV.

Equitable servitudes.

BURDEN runs if:

1) There is a writing.
2) There is intent.
3) The servitude touches and concerns the land.
4) There is notice.

The only difference I can determine between the two is a matter of remedy. Equitable servitudes receive...well...equitable remedies.

For the sake of completeness, I'll add easements to the picture.

BURDEN of easements run with the land UNLESS the purchaser is a BFP without notice. So, notice is the big factor there to the owner of the servient parcel. The BENEFIT simply runs with the land automatically.

pdwannabe

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Re: Property question - Covenants

Postby pdwannabe » Sun Feb 19, 2017 11:42 pm

this is great, thanks!

so all 5 elements of WITHN are needed for the covenant to be enforceable (if it's a burden)? and inquiry notice counts for this - so if the land/property was sold without any mention of the covenant, but the buyer could've figured it out by observing the surrounding land/property, the covenant will still be in place?

hirkaismyname

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Re: Property question - Covenants

Postby hirkaismyname » Mon Feb 20, 2017 12:00 am

pdwannabe wrote:this is great, thanks!

so all 5 elements of WITHN are needed for the covenant to be enforceable (if it's a burden)? and inquiry notice counts for this - so if the land/property was sold without any mention of the covenant, but the buyer could've figured it out by observing the surrounding land/property, the covenant will still be in place?


Might help to search Implied Negative Reciprocal Easement

YalteseFalcon

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Re: Property question - Covenants

Postby YalteseFalcon » Mon Feb 20, 2017 12:20 am

hirkaismyname wrote:
pdwannabe wrote:this is great, thanks!

so all 5 elements of WITHN are needed for the covenant to be enforceable (if it's a burden)? and inquiry notice counts for this - so if the land/property was sold without any mention of the covenant, but the buyer could've figured it out by observing the surrounding land/property, the covenant will still be in place?


Might help to search Implied Negative Reciprocal Easement


Right. I actually didn't know this theory by that name, but if I understand it correctly, it's describing the "common plan" theory of a development. So, a buyer of a property in a development where all other properties are residential-only may then have constructive notice that there is a covenant restricting commercial use--even if it is not mentioned in the buyer's deed. Is this right Hirka?

The privity requirements sometimes get a little bit complicated for me to distinguish.



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