Property Law: Real Covenants

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 What is a Real Covenant?

A real covenant is a contract between two or more landowners that limits their use of a property. These covenants affect the landowner’s property rights. This type of covenant “runs with the land,” which means that people who take an interest in the land in the future are also subject to the covenant.

Real covenants consist of two elements, the burden, and the benefit. The covenant will burden one owner, and the other will receive some benefit. To make this concept easier to understand, consider the following examples of real covenants:

  • An agreement to maintain an English-style garden on the land in perpetuity (this is an affirmative covenant – a covenant to do something)
  • An agreement not to erect a building or a wall that would block the other owner’s view of the sea (this is a restrictive covenant – a covenant not to do something)

Some of the most common covenants are imposed through homeowner’s associations, and conflicts have arisen with regard to them. Historically, exclusionary covenants were used to exclude racial minorities. Currently, covenants may restrict everything from the height and size of buildings to the materials used in construction to superficial matters such as paint color and holiday decorations.

What are the Elements Required to Create an Enforceable Real Covenant?

For a real covenant to be enforceable, the following elements must be met:

  • The original parties must intend for the benefit and burden that results from the covenant to apply to all subsequent owners
  • The covenant must relate to the direct use or enjoyment of the land
  • The agreement must be in writing
  • A relationship between the original parties to the covenant must exist (this is referred to as horizontal privity (see below)
  • A relationship between the original parties and the subsequent owners of the land must exist (this is referred to as vertical privity (see below)
  • When ownership is transferred, the new owners must acquire the exact piece of land
  • Subsequent owners must have noticed that the real covenant exists (the covenant should be recorded with the deed to accomplish this)

The specific requirements vary from state to state. Consult with a local real estate attorney to determine what is required for a real covenant to run with the land in your state.

What Is the Burden of a Real Covenant?

The burden of a real covenant describes the duty to perform the covenant’s promise or not to do something if the covenant is a negative promise. For example, suppose A owns tree-filled undeveloped land near B’s house, and B wants their view to remain a view of the woods. If A promises B not to construct anything on the land, A now has a duty to do as he promised. In this case, the “burden” is A’s inability to allow development on the property.

What Is the Benefit of a Real Covenant?

The benefit of a real covenant describes a landowner’s right to enforce the promise in the covenant. Using the same example above, B has the right to enforce A’s promise. The “benefit” in this situation is B’s ability to limit what A does with the land.

Is a Real Covenant Legally Enforceable if the Land is Sold to Someone Else?

A covenant is different from a contract because a covenant binds the land. Even if the land changes ownership, it’s still possible for a real covenant to survive and have legal force and effect.

An essential element of real covenants is their ability to “run with the land.” In other words, whoever owns the land can be legally compelled to honor a real covenant, even if a previous owner made it. Certain requirements must be met for either the burden or the benefit of a real covenant to remain enforceable after the land has been conveyed.

Five requirements must be met if the burden of a real covenant is to run with the land and remain legally enforceable:

  1. Written form: the real covenant must be expressed in writing in some kind of document, e.g., a contract, a clause, or a separate document
  2. Intent: the original promisor and promisee must have intended for the burden/benefit to run or remain enforceable by future landowners. This is usually shown within the promise and whether it is directed towards a particular person or is generally applicable.

For example, suppose X makes a promise to Y, stating, “I promise Y to maintain a fence on the south side of my property.” Here, the promise is directed only to Y. In contrast, suppose X says, “I promise to maintain a fence on the south side of my property.” Here, the promise is not directed to any particular person; therefore, it’s probable that the promise was meant to run with the land.

  1. Touch and concern: the real covenant must directly relate to the use and enjoyment of the real property.
  2. Horizontal privity (relationship): this refers to a special relationship that must exist between the original promisor and the promisee. The nature of the relationship that must be shown varies from state to state but usually involves showing that both have a mutual interest in the land.
  3. Vertical privity: the person who is burdened by the promise must own the EXACT same piece of land as the promisor under the original real covenant

How Can A Real Covenant be Terminated?

As noted above, the covenant will not be enforceable if the elements are absent. However, there are also some ways that a real covenant can be terminated:

  • Abandonment: A real covenant is abandoned when the party that benefits from it stops receiving it. In the situation described above, if B builds in the woods around the house, B has abandoned the right to have A refrain from building
  • Changed conditions: If circumstances have changed so drastically that no benefit can be drawn from the real covenant, it will be viewed as being terminated. This might happen if property owners C, D, and E, whose lands are adjacent to B’s, build in their portions of the woods. If that happens, there is no longer any purpose served by denying A the right to build as their neighbors have done
  • Agreement: At any time, the parties bound by the covenant can agree to end the covenant

How Can a Lawyer Help Me?

If someone is suing you to restrict your ability to use your land as you want, you should immediately contact an experienced property attorney to assert your rights. An experienced attorney will have handled this and know how to manage the legal technicalities of the process. A lawyer can determine whether the burden of a real covenant runs on your land and whether or not the person suing you has a right to enforce the benefit of any real covenant.

If you would like to establish a real covenant to run with your property or the property of another in which you have an interest, a property attorney can help make sure that your real covenant satisfies all the requirements identified above. An experienced property attorney will understand what is needed to establish a real covenant that will remain legally enforceable by future owners.

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