Covenant Enforcement and the Touch and Concern Requirement

Determining which promises are enforceable against subsequent landowners is a fundamental challenge in property law. The touch and concern requirement acts as a critical filter, preventing the unfair burdening of land with purely personal obligations. Understanding this doctrine is essential for anyone drafting agreements, conducting due diligence in real estate transactions, or litigating land use disputes, as it defines the line between a covenant that runs with the land and a mere personal contract.

The Foundational Doctrine of Touch and Concern

At its core, the touch and concern requirement is a judicial rule developed to limit which covenants (promises tied to land) can "run" with the land, binding or benefiting future owners. For a covenant to run, it must not only be in writing and intended to bind successors, but it must also "touch and concern" the land itself. This means the promise must affect the parties in their capacity as landowners rather than as unrelated individuals. The doctrine protects future owners from being saddled with obligations that have no logical connection to their property, preserving its alienability and value.

Courts historically applied a formalistic test: does the covenant physically alter the use of the land, or does it relate to the ownership, use, or enjoyment of the property? For example, a promise to pay a homeowners' association fee for the upkeep of common areas directly touches and concerns the land because it funds services that preserve the property's value and utility. Conversely, a promise between two neighbors to attend each other's annual block party is purely personal; it does not relate to their ownership or use of the land and would not bind a subsequent buyer.

How Courts Evaluate Touch and Concern

Judicial evaluation has never been a purely mechanical exercise. Courts examine the substance and effect of the covenant, often considering a series of interconnected factors. A primary inquiry is whether the covenant's burden or benefit is tied to the ownership or possession of the specific parcel of land. If the obligation would follow the original promisor even if they sold the land, it is likely personal. If it logically stays with the land itself, it touches and concerns.

Consider the classic examples. A covenant to refrain from building a commercial structure on a residential lot touches and concerns the burdened land (it restricts its use) and benefits the neighboring land (by preserving its residential character). An affirmative covenant to pay money is trickier. Courts traditionally scrutinized these closely, often holding that a promise to pay a sum of money, by itself, does not touch and concern unless the payment is for something directly related to the land, like a shared well, road maintenance, or a homeowners' association fee. The modern trend is to be more flexible, asking whether the payment is for a service or facility that directly benefits the property.

The Modern Trend and the Restatement Third's Reasonableness Standard

The traditional touch and concern requirement has been criticized as vague, unpredictable, and sometimes used to strike down socially useful land-use agreements. In response, a modern trend, most prominently embodied in the Restatement (Third) of Property: Servitudes, has moved to relax or replace the doctrine. The Restatement Third abolishes the touch and concern requirement altogether, replacing it with a overarching reasonableness standard.

Under this modern approach, a covenant is enforceable against successors unless it is unconstitutional, violates public policy, imposes an unreasonable restraint on alienation or trade, or is unreasonable under the circumstances. Reasonableness is evaluated at the time of creation and enforcement, considering factors like its purpose, the context of the parties and the land, and changing conditions. This shift focuses judicial inquiry on the covenant's practical effects and fairness, rather than on metaphysical questions about whether an obligation "touches" the land. Many jurisdictions now blend the old and new, using touch and concern as a factor in a broader reasonableness analysis.

The Special Case of Anti-Competitive Covenants

A critical application of these principles involves anti-competitive covenants, such as a promise not to open a competing business on a parcel of land. These covenants directly test the limits of touch and concern and reasonableness. Historically, a covenant not to compete tied to a specific parcel of land was seen as touching and concerning that land because it restricted its use. However, courts have always viewed such restraints with suspicion under the broader public policy against restricting trade.

Today, whether such a covenant runs with the land involves a two-step analysis. First, does it meet the basic requirements (intent, writing, touch and concern/reasonableness)? A non-compete tied to the sale of a business and its underlying land often will. Second, even if it technically runs, it must be reasonable in scope, duration, and geographic area to be enforceable. A covenant prohibiting any business forever within 100 miles would likely be struck down as an unreasonable restraint, regardless of whether it touched and concerned the land. This area highlights how property law doctrines like touch and concern intersect with antitrust and contract law principles.

Common Pitfalls

1. Assuming All Written Promises Run With the Land: The most common error is believing that because a promise is in a deed or declaration, it automatically binds all future owners. The touch and concern (or reasonableness) hurdle must always be cleared. Drafters must explicitly state the intent for the covenant to run and carefully craft the obligation to relate directly to the land's use or value.
2. Confusing Personal Services with Land-Related Obligations: A covenant requiring a homeowner to hire a specific landscaping company (owned by the original developer) for all yard work is likely personal. It benefits the company as a commercial entity, not the neighboring landowners as landowners. A covenant to maintain landscaping to a community standard, which touches the land, is enforceable; dictating who must perform the service often is not.
3. Overlooking Changed Conditions: A covenant that was reasonable and touched the land at creation may become obsolete. For example, a covenant restricting all lots to single-family homes may become unreasonable if the entire surrounding area has lawfully become commercial, making residential use impractical. Under modern reasonableness analysis, a court may refuse to enforce it. Relying on an old covenant without assessing current conditions is a major litigation risk.
4. Drafting Overly Broad Anti-Competitive Covenants: When creating a non-compete tied to land, an excessively long duration or vast geographic scope will invite a court to void it entirely as an unreasonable restraint of trade. The covenant should be narrowly tailored to protect a legitimate business interest (like the goodwill of a sold business) without unnecessarily stifling competition.

Summary

• The touch and concern requirement is a traditional doctrine that limits running covenants to those affecting the parties as landowners, not as individuals, to preserve the free alienability of property.
• Courts evaluate touch and concern by analyzing whether the covenant's burden or benefit is logically tied to the ownership, use, or enjoyment of the specific parcel of land.
• The modern trend, led by the Restatement (Third), moves toward a reasonableness standard, which assesses a covenant's validity based on its fairness, purpose, and effects at the time of enforcement.
• Anti-competitive covenants must satisfy both property law rules (touch and concern/intent to run) and contract law principles of reasonableness in scope, duration, and geography to be enforceable.
• Practitioners must draft covenants with clear intent and a direct connection to the land, while constantly evaluating older covenants for potential unenforceability due to changed conditions or unreasonableness.