Property - Real Covenants on the UBE / MEE

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Property - Real Covenants


Let’s face it.  Property, is a very difficult subject.  The rules of law are dry, dull and boring.  Their real-world application may never be needed by a newly minted attorney.  Couple all of that with the difficulty of some of the sub-topics (Future Interests, Mortgages, The Recording System, and Servitudes, for example) and we have an overall very difficult subject. 

All of that said, today we will tackle the subtopic of one of the common types of servitudes, that of the Real Covenant.

Definition
A real covenant is a promise that relates to the ownership or usage of land. Although covenants, in general, fall within the province of contract law, it is important to discuss various aspects of the law regarding real covenants within the context of property law. 
Although covenants are similar to easements in that in both cases, the use of land is being restricted or enhanced by an obligation owed by the property owner to another party, real covenants differ from easements in that they are not considered ownership interests in land. Real covenants are promises. They can not be acquired by implication, necessity, prior use or prescription. They are agreements and thus can only be created by promises. Once in existence though, there is little practical difference between a negative easement and a real covenant.
It is crucial to point out here that while a covenant is not an interest in land per-se it MUST be in writing and is therefore governed by the Statute of Frauds (SOF).

Enforcement of a Real Covenant on a Successor

As far as enforcement is concerned, the key element of a real covenant that distinguishes it from an ordinary promise is that a real covenant can sometimes be enforced against successive owners of the property. If a covenant can be enforced against successive owners, it is said to “run with the land.” This means that, like an easement, the covenant can remain effective even if the land is transferred to a third party. Of course, this distinguishes real covenants from ordinary contracts, as all ordinary contracts are enforceable only by and against people who are parties to the contract or intended beneficiaries.

How to we bind a successor, however and ensure that this covenant "runs with the land?"  What are the elements of determining the BURDEN and the BENEFIT of this covenant in order to determine if a successor will be bound?

We should always figure out the BURDEN first as it is more difficult to ascertain and contains an element (horizontal privity) that the BENEFIT does not contain!  Far easier to determine benefit as opposed to burden.

FIRST – Does the BURDEN of A’s promise to B RUN from A to A1?  To make this determination we need to figure out if we have the following elements:

1 - A writing.  Was the original promise in writing?
2 - Intent – The original parties intended that the covenant would run.
3 - Touch and Concern the land – In other words, the promise must affect parties’ legal relations as landowners and NOT simply as members of the community at large.
4 - Horizontal and Vertical Privity – (BOTH ARE NEEDED) - Horizontal privity is the nexus of the original parties A and B and requires that they be in succession of estate meaning that they were in grantor/tee, LL/T, mortgagor / mortgagee relationship.  Vertical privity is the nexus between A and A1 and it simply requires some NON hostile nexus like a contract, devise, or descent.

SECOND – Does the BENEFIT of A’s promise to B run from B to B-1?  We look for the following elements:

1 - Writing – The original promise between A and B was in writing
2 - Intent – The original parties A and B intended that it would run
3 - Touch and Concern – The promise effects parties as landowners
4 - Vertical Privity – A NON hostile nexus between B and B1.  Note that here, Horizontal Privity is NOT needed and this is precisely why we determine if the burden will run before we determine if the benefit will run.

When we determine if the burden and the benefit will run with the land, we will ultimately know if a successor is bound.   

For more information about Real Covenants or the bar exam in general, feel free to email us at PassYourBarExam@gmail.com  

Good luck!

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