Class 31 Covenants Contd-2

Covenants and Privity

A sells to

D

A

Promisee; benefit to

Whiteacre

Privity between original parties in context of a transfer of estate in land

(known as “ horizontal privity”)

(e.g., B sells to A)

B

Promisor; burden on

Blackacre

B sells to

C

Privity between promisee and assignee

(known as “ vertical privity”)

Privity between promisor and assignee

(known as “ vertical privity”)

D

Professor Marcilynn A. Burke

C

Copyright©2007 Marcilynn A. Burke

All rights reserved. Provided for student use only.

Real Covenants

1. Must be in writing to satisfy the Statute of Frauds.

2. Must be what the parties intended .

Professor Marcilynn A. Burke Copyright©2007 Marcilynn A. Burke


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Real Covenants

3. Must touch and concern (T&C) the land with which it runs, that is—

• it must have a logical connection to the use and enjoyment of land, or

• it must physically affect the use and enjoyment of the land, or

• the promisor’s legal interest as an owner must be rendered less valuable by the promise and the promisee’s legal interest as an owner must be made more valuable by the promise.



Real Covenants Cont’d

4. Must have horizontal privity of estate: the relationship among—

(a) the original promisor (owner of burdened land),

(b) the original promisee (owner of benefited land), and

(c) the affected estate in land.



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Real Covenants Cont’d

5. Must have vertical privity of estate: the relationship among—

(a) the original promisor or promisee under a covenant,

(b) the promisor’s or promisee’s successor in interest , and

(c) the affected estate in land.



Equitable Servitudes

• To be enforceable against a successor in interest—

• Intent

• Notice (unless successor gave no consideration)

• T&C



3

Tulk v. Moxhay,

41 Eng. Rep. 1145 (1848), Casebook p. 746

Tulk

Grantor/

Promisee

NO horizontal privity of estate between

Tulk and Elms in England

Elms

Grantee/

Promisor

Benefit to

Tulk and his tenants

Burden on

Leicester Square Garden

Tulk sues to stop Moxhay.

Elms sells to B and

B sells to C and

C sells to Moxhay with

NO covenant in the deed

Vertical Privity

Between

Elms and Moxhay


Moxhay



Tulk v. Moxhay Cont’d

• Intent

• Notice

• T&C

• Other considerations

• Fairness/Equity

• Benefit of the bargain

• Value of retained land

1910



4

Leicester Square Garden Through the Years

Wyld’s Monster Globe

1910

Modern Times


Modern Times



Neponsit Property Owners’ Association, Inc. v.

Emigrant Industrial Savings Bank,

15 N.E.2d 793 (N.Y. 1938), Casebook p. 755.

Horizontal Privity

The Deyers Neponsit Realty

Mesne

Conveyances

Vertical Privity

Emigrant Bank buys at judicial sale

Emigrant Bank


Neponsit assigns right to enforce

Vertical Privity?!?!

to HOA

HOA



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Neponsit Cont’d

Does the Covenant Run with the Land?

• Writing

• Intent

• T&C

• Privity (horizontal and vertical)



Neponsit Cont’d


• T&C

• Negative Covenant

• Affirmative Covenant

• Old English Rule

• Modified English Rule

• Reluctance

• Neponsit Rule



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Neponsit Cont’d


• Privity

• Horizontal

• Vertical



Caullett v. Stanley Stilwell & Sons, Inc.,

170 A.2d 52 (NY 1961), Casebook, p. 768.

• “The grantors reserve the right to build or construct the original dwelling or building on said premises.”

• “covenants running with the land . . .

[which] shall bind the purchasers, their heirs, executors, administrators, or assigns.”



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Caullett v. Stanley Stilwell & Sons Cont’d

Real Covenant?

• Writing

• Intent

• Touch & Concern

• Horizontal Privity

• Vertical Privity



Caullett v. Stanley Stilwell & Sons Cont’d

Court’s Reasoning

• Ambiguous

• Touch & Concern

• In gross



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Class 31 Covenants Contd-2

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