Covenants and Privity
Privity between original parties
in context of a transfer of estate in land
(known as “horizontal privity”)
Promisee;
(e.g., B sells to A)
benefit to
Whiteacre
B
A
A
sells to
D
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
U N I V E R S I T Y of H O U S T O N
C
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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Real Covenants
1. Must be in writing to satisfy the
Statute of Frauds.
2. Must be what the parties intended.
3. Must touch and concern (T&C) the
land with which it runs.
4. Must have horizontal privity of estate.
5. Must have vertical privity of estate.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 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.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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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.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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Equitable Servitudes
To be enforceable against a successor in
interest—
• Intent
• Notice (unless successor gave no
consideration)
• T&C
• [Writing – maybe]
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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
Burden on
Leicester Square Garden
Benefit to
Tulk and his tenants
Elms sells to B and
B sells to C and
C sells to Moxhay with
NO covenant in the deed
Vertical Privity
Between
Tulk sues to stop Moxhay.
Elms and Moxhay
Moxhay
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Tulk v. Moxhay Cont’d
• Intent
• Notice
• T&C
• Other considerations
1910
• Fairness/Equity
• Benefit of the bargain
• Value of retained land
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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Leicester Square Garden Through the Years
Wyld’s Monster Globe
1910
Modern Times
Modern Times
U N I V E R S I T Y of H O U S T O N
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Professor Marcilynn A. Burke
Neponsit Property Owners’ Association, Inc. v.
Emigrant Industrial Savings Bank,
15 N.E.2d 793 (N.Y. 1938), Casebook p. 864.
Horizontal Privity
The Deyers
Neponsit Realty
Mesne
Conveyances
Vertical Privity
Neponsit
assigns right
to enforce
to HOA
Vertical Privity?!?!
Emigrant Bank
buys at judicial
sale
Emigrant Bank
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
HOA
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Neponsit Cont’d
Does the Covenant Run with the Land?
• Writing
• Intent
• T&C
• Privity (horizontal and vertical)
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Neponsit Cont’d
Does the Covenant Run with the Land?
• T&C
• Negative Covenant
• Affirmative Covenant
• Old English Rule
• Modified English Rule
• Reluctance
• Neponsit Rule
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
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Neponsit Cont’d
Does the Covenant Run with the Land?
• Privity
• Horizontal
• Vertical
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Shelley v. Kraemer,
334 U.S. 1 (1948), Casebook p. 876
Enforcing Racial Segregation
• Social norms
• Violence
• Nuisance law
• Racial zoning
• Racially restrictive covenants*
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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Shelley v. Kraemer Cont’d
Missouri Covenant
Michigan Covenant
•
Term of 50 years
•
Until 1960 (34 years)
•
Restricting the use
and occupancy of the
property
•
Restricting the use
and occupancy of
the property
•
By any person not of
the Caucasian race
• By any person not of
the Caucasian race
• Intended to restrict
use and occupancy
by people of the
Negro or Mongolian
race
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Shelley v. Kraemer Cont’d
•
•
Missouri Ruling
Restrained the
Shelleys from taking
possession
Ordered divestment
of title and revesting
of title in the
immediate grantor or
another as the court
directed
U N I V E R S I T Y of H O U S T O N
•
•
Professor Marcilynn A. Burke
Michigan Ruling
Ordered Petitioners
to move from the
property within 90
days
Enjoined and
restrained
Petitioners from
using or occupying
the premises in the
future
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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Shelley v. Kraemer Cont’d
Enforceable Covenant?
The Shelley’s House
• Writing
• Intent
• Touch & Concern
• Horizontal Privity
• Vertical Privity
National Register of Historic Places in Apr. 1988 and dedicated as
a historic site on May 1, 1988, the 40th anniversary of the case.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Shelley v. Kraemer Cont’d
Older Common Law
• Alienability
• RAP
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
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The Fourteenth Amendment
• If the restrictions against the right of
occupancy were imposed by state
statute or local ordinance, they would
be in violation of the Fourteenth
Amendment.
• Does judicial enforcement of private
restrictions equal state action?
• YES. “The judicial action in each
case bears the clear and
unmistakable imprimatur of the
State.”
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Other Possible Answers to the
State Action Puzzle
• Judicial overreaching
• Private takeover
• Enforcement of custom
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2013 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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