Covenants Running with the Land

Covenants that run with the land are powerful tools in property law, allowing private parties to control land use far into the future. Unlike a contract that binds only the original signers, these covenants can bind subsequent owners, creating a web of obligations and benefits that shape neighborhoods, commercial developments, and common interest communities. For bar exam and legal practice, mastering the requirements and nuances of real covenants and equitable servitudes is essential, as they frequently appear in fact patterns involving disputes between neighbors, homeowners' associations, and developers.

Foundational Concepts: The Two Types of Running Covenants

A covenant running with the land is a promise concerning the use of land that, once created, "runs" to bind or benefit future owners of that land. There are two primary types, each with its own historical origin and legal requirements: real covenants and equitable servitudes.

A real covenant (or covenant at law) is a promise that creates a right to sue for money damages if it is breached. For a real covenant to run with the land and bind a subsequent owner, it must meet several strict common-law requirements.

An equitable servitude is a promise that creates a right to seek an injunction—a court order to stop or compel an action. Equity courts developed this doctrine to enforce land-use promises where the technical requirements for a real covenant were not fully met, focusing instead on the notice and intent of the parties. The modern trend, especially in jurisdictions following the Restatement (Third) of Property, is to merge these doctrines, but the bar exam and many courts still analyze them separately.

The Requirements for a Real Covenant to Run

For a real covenant to run with the land at common law, it must satisfy requirements for both the burden (the duty to refrain from an action) and the benefit (the right to enforce the duty). These requirements are often tested sequentially.

1. Writing and Intent: The covenant must be created in a signed writing that satisfies the Statute of Frauds. The writing must clearly show the parties' intent for the promise to bind successors, not just the original parties. Phrases like "successors and assigns" are strong evidence of this intent.

1. Touch and Concern: The promise must touch and concern the land. This means the covenant's effect must be tied to the physical use, value, or enjoyment of the land itself, rather than being a purely personal obligation. A promise to maintain a shared driveway touches and concerns the land; a promise to give your neighbor a birthday gift each year does not.

1. Privity: This is the most technical requirement and a common exam trap. For the burden to run, there must be privity of estate between the original promisor and promisee. This typically means they shared some simultaneous interest in the same land at the time of creation, such as a landlord-tenant relationship or a grantor-grantee relationship (horizontal privity). For the benefit to run, the requirement is less strict, often needing only that the original parties intended it to run (vertical privity between the original and successor owners).

The Requirements for an Equitable Servitude

Equity courts care more about fairness and notice than technical privity. The requirements for an equitable servitude to run are generally:

• Intent: The original parties intended the restriction to bind successors.
• Touch and Concern: The promise touches and concerns the land.
• Notice: The subsequent owner against whom the servitude is being enforced must have had notice of it when they purchased the land. Notice can be:
• Actual: The buyer was actually told or knew about it.
• Record: The covenant was properly recorded in the chain of title.
• Inquiry: Conditions on the land (e.g., uniform houses) would prompt a reasonable person to investigate.

If a subsequent buyer has notice, they will be bound by the equitable servitude, regardless of horizontal privity. This is a critical distinction from real covenants.

Creation and Termination of Running Covenants

Covenants can be created expressly through deeds or separate written agreements. They can also be created implicitly, such as through a common scheme of development (e.g., a subdivision where all lots are sold with uniform restrictions to create a particular neighborhood character).

Just as important as creation is termination. A covenant running with the land can end through:

• Release: The benefited party voluntarily releases the burdened party.
• Merger: When the burdened and benefited parcels come under single ownership.
• Acquiescence or Laches: The benefited party fails to enforce the covenant repeatedly, leading others to reasonably believe it is abandoned.
• Changed Conditions: The neighborhood has changed so drastically that the original purpose of the covenant is now worthless or impossible to achieve. This is a high bar to meet.
• Expiration: Many covenants are written to last for a set term (e.g., 50 years).

Common Pitfalls

Bar exam questions often test subtle misapplications of these rules. Be wary of these common mistakes:

1. Confusing Privity Types: The most frequent error is applying "horizontal privity" (needed for a real covenant's burden to run) when the facts clearly involve an equitable servitude claim for an injunction, where only notice matters. Ask yourself first: is the plaintiff seeking damages (real covenant) or an injunction (equitable servitude)? This dictates the analysis.

1. Misapplying "Touch and Concern": Do not assume all restrictions touch and concern. A promise to pay money (like a homeowners' association fee) does touch and concern if it is for maintenance of common areas that benefit the property. A promise related solely to the personal conduct of an owner, unrelated to land use, likely does not.

1. Overlooking Notice in Equitable Servitudes: When a subsequent buyer is involved, the analysis does not end with intent and touch and concern. You must always check if that buyer had notice (actual, record, or inquiry). If they are a bona fide purchaser for value without notice, they take the land free of the equitable servitude.

1. Assuming Covenants Are Forever: Candidates often forget termination doctrines. A fact pattern describing a quiet, single-family neighborhood that has become a bustling commercial district is likely setting up a "changed conditions" argument for termination.

Summary

• Covenants running with the land are enduring land-use promises that bind future owners. Real covenants support a claim for damages, while equitable servitudes support a claim for an injunction.
• For a real covenant's burden to run, it requires a writing, intent, touch and concern, and horizontal privity. The benefit requires intent, touch and concern, and vertical privity.
• For an equitable servitude to run, it requires intent, touch and concern, and most critically, notice to the subsequent owner. Privity is not required.
• On the bar exam, immediately identify the remedy sought (damages vs. injunction) to choose the correct analytical framework. Always check for notice when a subsequent owner is involved.
• Covenants can be created expressly or through a common scheme, and can be terminated by release, merger, abandonment, or changed conditions in the neighborhood.