Covenant running with the land
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A covenant running with the land, is a real covenant, in the law of real property. It is a nonpossessory interest in land in one form as an agreement between adjoining landowners to do something (affirmative covenant) or to refrain from doing something (restrictive covenant) with relation to the land. An example of an affirmative covenant is a promise to build a fence, while an example of a restrictive covenant is a promise not to develop land for commercial use. Another agreement form that is common is as a Covenants, Conditions, and Restrictions (CC&R) document as with a condominium.
Each covenant has two sides: the burden and the benefit. The burden is the promissor's duty to perform the promise and the benefit is the promisee's right to enforce the promise.
These covenants "run with the land" which means that subsequent owners or successors may either be able to enforce the covenant or be burdened by it.
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[edit] Requirements for Burden to Run
In order for the burden of covenant to run with the land, six requirements must be met. First, the covenant must be in writing to satisfy the Statute of Frauds. Second, the original parties to the agreement must have intended that successors be bound by the terms of the agreement. This intent is usually found in the language of the original agreement. Third, the subsequent owners must have had actual notice, inquiry notice, or record notice of the covenant at the time of purchase. Fourth, the covenant must touch or concern the land. This means the covenant must relate to the direct use or enjoyment of the land. Fifth, there must be horizontal privity between the original parties. Horizontal privity requires that at the time the original parties entered into the agreement, they shared some interest in land independent of the covenant (e.g. landlord and tenant, mortgagee and mortgager. Individual state statutes can alter the requirements of horizontal privity. Finally, there must be vertical privity. Vertical privity characterizes the relationship between the original party to the covenant and the subsequent owner. In order to be bound by the covenant, the successor must hold the entire estate in land held by the original party.
[edit] Requirements for Benefit to Run
In order for the benefit of the covenant to run with the land, four requirements must be met. First, the covenant must be in writing to satisfy the Statute of Frauds. Second, the original, covenanting parties must have intended that the successors be able to enforce the covenant. Third, the covenant must touch or concern the land. Lastly, there must be vertical privity between the successor and the original party.
[edit] Court Interpretation of Real Covenants
Courts interpret covenants relatively strictly and give the words of the agreement their ordinary meaning. Generally if there is any unclear or ambiguous language regarding the existence of a covenant courts will favor free alienation of the property. Courts will not read any restrictions on the land by implication (as is done with easements for example).
A covenant can be terminated if the original purpose of the covenant is lost. A negative covenant is one in which property owners are unable to perform a specific activity, such as block a scenic view.
An affirmative covenant is one in which property owners must actively perform a specific activity, such as keeping the lawn tidy or paying homeowner's association dues for the upkeep of the surrounding area.
An agreement not to open a competing business on adjacent property is generally enforceable as a covenant running with the land.
