Licenses and Easements, Covenants

8/10/2019 Licenses and Easements, Covenants

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Licenses and Easements

Introduction

License—a form of permissive entry in which a temporary invitation is extended to allow a non-

owner to come onto a property. The owner waives their right to exclude the non-owners theyhave invited in and simultaneously exercises their privilege to admit others to the property.

o

Consent is a defense to trespass: A licensee who enters property held by another with

the owner’s permission does not commit a trespass unless she refuses to leave after

permission is revoked.

o Revocable at will: licenses as permissible entries to land are generally revocable by the

owner. It may be granted and it may be revoked.

Exceptions:

o

Example: Inviting friends over for dinner (license); go to a grocery store (implied

license);

Easements—right of access to the property; rights to do specific acts on land owned by

someone else; a non-possessory right in someone else’s property.

o

Distinguish “license” vs. “easement

Easements are intended to be permanent, or at least to last a specific period

Easements are not revocable by will of the owner of the land over which the

easement passes.

They do not grant full possession; only the right to perform specific acts.

o Distinguish “easement” v. “lease”

A lessee has possession and is generally entitled to do whatever she wants with

the property unless agreement provides to the contrary. The license is

irrevocable unless the contract is breached.

Rights short of possession involve entitlements to perform specific acts;

however, they may be intended to be permanent or irrevocable for a specified

period of time.

Easement may be granted by deed, which can be bought and sold.

Usually an easement is granted to owners of neighboring or nearby

land.

Types of Easements

o

Affirmative Easement—A right to do something on someone else’s land.

o

Negative or Restrictive Easement—an agreement not to do something on your land.

Covenants—contractual agreements where parties agree to restrict the use of their own land

for the benefit of either their landlord or neighboring owners.

o

Affirmative covenant—a duty to do something on your own land to benefit other

owners

o

Restrictive covenant—limits the uses to which land can be put

Servitudes—various nonpossessory interests individuals can have belonging to someone else.

The main types of servitudes are easements and covenants.



o Servitudes that “run with the land”—most servitudes are of this type; rights in

someone else’s land are attached to ownership of another parcel; the servitude is

“appurtenant” (attached to) to ownership of a “dominant estate” whose owner benefits

from use of the servitude on the “servient estate” (land burdened by the servitude).

Purchase—rights encompassed by the servitude will continue to existence if the

parcels burdened or benefited by the easement are sold.

o

“law of real covenants”—contracting to limit or regulate land use

o

“equitable servitudes”—the equity court’s response to technical and substantive limits

to the ability of owners to create and enforce real covenants.

Licenses

Informal creation—usually licenses are created informally.

o

Some are created by oral statement.

i.e. Inviting friends for dinner

o

Others are implied.

i.e. going to the store

Formal creation—created formally by written grant or statement

Revocable—licenses are generally revocable.

o Commonwealth v. Lapon (Mass. App. Ct. 1990)—customer insisted he was entitled to a

free bottle of detergent; he refused to leave; store manager called th police.

The court held that the store was entitled to revoke its implied license to enter

the premises.

o

Exceptional cases:

Easement by estoppel—if the licensee invests substantially in reasonable

reliance on the license, the courts may grant the licensee an easement byestoppel.

Public accommodation—a public accommodation may have a common law or

statutory duty no to revoke a license if its reasons are discriminatory

License interpreted as lease or covenant

Distinguish:

o

License vs. Easement

Wilson v. Owen (Mo. 1953)—developer granted homeowners “privilege” to use

two lakes for swimming, boating, and fishing purposes. Deeds contained

restrictive covenants limiting use of land and gave homeowners association

power to alter covenants. Majority of owners voted to revoke privilege to uselake for recreational purposes. Some owners sued.

HOA—privilege mere license revocable by the association; covenant

Court held that the association could amend restrictions on land use,

but it could not revoke “privileges” conferred by the deeds. “Privilege”

to use lakes was not merely a revocable license but a permanent

easement. “surrounding circumstances” might be considered: sales



brochures and adverts represented that owners would have exclusive

rights to use the lakes; buyers legitimate expectation of those rights to

be permanent easements.

Counterarguments: easements are normally created by language that

clearly expresses the fact that an irrevocable right is being created.

Unless permanent easement was being created, HOA should be

presumed to have the power to revoke the privilege.

o

License vs. Lease

These cases are generally decided by asking whether the owner has transferred

(1) exclusive “possession” of (2) a defined space;

Yes—lease likely to be found

No—license likely to be found

Easements—a non-possessory right in someone else’s land; less than full possession or occupation;

Possession—occupation of land with the intent to control it

usually easements encompass only specific entitlements, such as right to pass over land, remove

minerals, lumber, etc., right to use land for a specific purpose (recreation)

Implied Easements

Distinguish:

Express vs. implied easements

o Express easement—explicit statement that the grantor conveys an “easement” to the

grantee and describes the nature and location of the easement. It may be found in a

deed.o

Implied easement—when the express agreement between parties is silent or

ambiguous on the question of whether the grantor intended to create an easement.

1.

Easement by Estoppel

a.

When an owner gives someone else permission to use her property in a particular way

and the licensee invests substantially in reasonable reliance on that permission, and

revocation of the license would work an injustice.

i. Reliance must be reasonable—the licensor created the impression that the

license would not be revoked or a reasonable licensee would so construe in that

situation.

ii.

Remedy: the doctrine protects grants the licensee a permanent easement orand easement that will be irrevocable for whatever time is necessary to avoid

injustice.

b. Application

i. Ambiguous deed references—an owner may grant an easement in writing but

fail to satisfy the requirements of the statute of frauds.



1. Lawrence v. National Fruit Company (Va. Cir. Ct. 1997)—deeds referred

to a road called “Strother’s Lane” as a boundary line between parcels of

property; no deed explicitly created an easement

2. Court held reference to private roads implied the road was available for

use by purchasers of contiguous land; express easement had been

created; easement would have also been created by estoppel because

(1) deeds suggested grantees could use the road (2) grantees relied on

that representation ;

a.

Reasoning: Grantor intended easement but failed to include

clear language; grantee had reasonably understood the

reference to the road in the deed to constitute a grant of

permission and purchased on reliance of this representation.

ii.

Oral Easements—if an owner grants an easement orally, and the grantee

invests in reliance on the ability to use the easement, the courts may find that

an easement was created even though the grantor failed to put it in writing, as

required by the statute of frauds.

1.

Also applies when the grantor conveys an easement over land the

grantor does not own but later acquires the property specified in the

easement grant as the servient estate.

iii. Irrevocable licenses—an owner intends to grant a license, but the courts

convert it to a permanent easement. If the owner gives permission and the

licensee invests substantially in reasonable reliance on that permission by

expanding money or labor or making improvements on her own land, the

licensor who gave permission may be estopped (prevented) from revoking that

permission for whatever period is deemed necessary to protect the justified

expectations of the licensee.

1. Holbrook v. Taylor (Ky. 1976)

a.

Defendant gave neighboring plaintiff permission to use road on

the defendant’s property to get to plaintiff’s land. After

plaintiffs built the house, defendants tried to revoke permission

and close off the land.

i.

No express easement created in writing; only

permission

b.

Court held that the licensor could not revoke under these

circumstances and turned the revocable license into an

“irrevocable license” effectively an easement.

c.

Policy

i.

Arguments for easement by estoppel

1.

Intent of grantor: Most cases involve situations in which the grantor has

granted permission orally and has not used the technical word

“easement.” There is a presumption that grantors intended to grant



easements but simply failed to use the correct language. Effectuating

the intent of the grantor.

2.

Protecting interest of licensee: The licensee reasonably relied on the

permission that the licensor knew or should have known that the

licensee was so relying, that the licensee’s expectations were justified,

and that the licensee’s justified expectations could only be protected

only by refusing revocation.

3.

Reliance and breach of trust: if the licensor does not clarify that the

license is revocable at will and the licensee trusts the licensor’s good

will, the licensor will not be allowed to breach that trust by revoking

permission after the investment has been made and the reliance has

occurred.

ii.

Arguments against easement by estoppel

1.

Those who want easements should bargain for them and have them

described clearly in writing. This clarifies property rights, prevents fraud,

and decreases needless litigation.

2.

Licensor may have only intended to grant a revocable license; though he

may have misled the licensee by making a representation that the

licensor knew would be understood as granting more than the licensor

intended to grant. Courts may not grant easement if they believe

licensor intended to grant only a revocable license.

3.

Limiting the doctrine (and thereby relaxing statute of frauds) increases

uncertainty.

4.

Counterarguments: protect justified expectations of the licensee;

applies in relatively clear and predictable circumstances (i.e. when

licensee foreseeably invests substantially in reasonable reliance on the

license; licensor should have known that licensee understood the

permission as an easement)

iii. Hard case (Hearsay)

1.

Van Schaack v. Torsoe (N.Y. App. Div. 1990)

a.

Plaintiff inherited property from her parents; alleged neighbors

promised her parents they would sell them a strip of land for

use as a driveway; parents built house in reliance on this

permission; no other way to get to the parking spaces behind

the house

b.

Court excluded plaintiff’s hearsay evidence

c.

Reasoning: hearsay rules grounded on the reliability of evidence

involving things said to people who are not able to testify;

inability to cross-examine;

d.

Counterargument: “an easement by estoppel, once created, is

binding upon sucessors in title if reliance upon the existence of

the easement continues,” and excluding the evidence might



allow licensor to evade the result and work injustice on the

party who reasonable relied on the representation

iv.

Negative easements by estoppel—some cases involve representations that a

grantor’s reserved land will not be used for certain purposes.

1.

These are usually regulated by the law of covenants rather than

easements and are called “equitable servitudes.”

2.

Implied from Prior Use (quasi easements)

a.

Courts will imply an easement from prior use when (1) the two parcels were at one time

in common ownership; (2) one of the parcels had derived a “benefit or advantage” from

the other parcel prior to the sale, (3) this was both apparent and continuous, and (4)

continuation of the use is “reasonably necessary” or “convenient” to enjoyment of the

dominant estate.

b.

Kinds of implied easements

i.

Rights of way (people, vehicles)

ii.

Rights to enter

iii.

Rights to obtain (water, oil, minerals, etc.)

iv.

Continued access (sewage lines)

v.

Access to recreational facilities (lake, beach, gymnasium)

1. Lake/beach—cannot said to be “necessary,” but access may have

induced buyers to buy and they may have relied on that representation

to determine how much to offer for the property.

c.

Easements by reservation ad easements by grant

i.

Presumption: courts are more likely to imply an easement to a grantee than to

a grantor.

ii.

Easement by grant: a grantee who claims an easement over remaining land of

the grantor

1.

If it is necessary to the reasonable enjoyment of the dominant estate,

courts are likely to view the omission as a mutual mistake, reform the

deed to comply with presumed intent.

iii.

Easement by reservation: when the grantor claims that she intended to reserve

an easement over the land conveyed to the grantee

1.

Courts are likely to want a higher level of certainty that the easement is

necessary to the grantor’s retained land. There is an assumption that

the grantor is parting with all rights in the property being conveyed to

the grantee. If not, it should be explicitly arranged to avoid surprise.

d. Easement implied from map or ambiguous deed language

i.

Bubis v. Kassin (NJ Superior Court of Appeals, 1999)—“It is f irmly established

that when land is sold with reference to a map on which lots and streets are

delineated, the purchaser acquires an implied private right of way over the

streets.”

1.

In most circumstances such implied easements give landowners access

“from or to some public highway.”



2.

If a more expansive right-of-way is necessary for the purchaser’s full

beneficial enjoyment, courts will recognize whatever implied right is

necessary to carry out the intent of the conveyance.

ii.

Developer of a seaside community prepared a map before selling lots which

showed roads from properties to the beach; deeds included general easement

of access to the beach

iii.

Court concluded use of streets drawn on the map that provide access to the

beach and ocean were “necessary or useful f or the beneficial enjoyment of the

lots conveyed” and should be recognized as implied easements.

e. “Reasonably necessary or highly convenient”

i.

Landlocked parcel—a right of way will be recognized if there is no other way for

the grantee to get to a public way.

1.

Necessity must be absolute.

ii.

Non-landlocked parcel—easement will be implied from prior use as long as it is

reasonably necessary.

iii.

Extreme difficulty by other routes—easements likely to be implied if access to

the land is extremely difficult by other routes.

3.

Necessity

a. Landlocked parcels—easements are implied by necessity when an owner sells a

landlocked parcel. No prior use is required, but there must be no other access to public

roads for this to obtain.

b.

Default rule or Mandatory rule?

i.

An owner agrees to buy land with no easement over the grantor’s land because

the grantee intends to access public street through a neighbor’s driveway. That

access is revoked.

ii.

Presumed intent: Third Restatement (and some courts)—no easements will be

recognized in this situation. Easements are created by necessity to effectuate

the presumed intent of parties. If the parties intendednot to create an

easement, then one will not be recognized.

1.

Landlocked owner could purchase an easement.

2.

Landlocked owner could sell the property.

3.

It would reduce social welfare to force a sale.

4.

Inefficient—waste of resources to have landlocked parcel that cannot

be used or developed

a.

But it is not the case society would be best off with every parcel

developed and used

iii.

Public policy (mandatory): some courts hold that easements are recognized by

necessity regardless of the intent of the parties.

1.

Lands should not be rendered unfit for occupancy or successful

cultivation.

2.

Owners have a right to get to their own land



3.

Purchasing an easement may not be possible (transaction costs may

result in blocked deal; neighbors may be disinclined to bargain)

4.

Allows owners to get to their property and ensures each parcel is

available to use and transfer

c. Scope of an easement

i.

Strollo v. Iannantuoni (Conn. Ct. App. 1999)—court recognized easement by

necessity but limited the road to 20 feet in width. Owner wanted more

substantial easement as would be needed for a road adequate to a subdivision.

ii. Court: it was not “reasonably essential to the plaintiff’s use of their property to

impose an easement of necessity that is fifty feet wide ... to accommodate a

plaintiff’s desire to profit from a potential subdivision. Moreover, the creation of

such a right-of-way would work serious inequity on the defendants.”

iii.

Other (outside) arguments: easement by necessity should be recognized not

just to provide access to the land, but to provide access to every part of the

land… it was foreseeable that an owner might subdivide and developed the

property; owner of landlocked property should be entitled to accessway

appropriate to such development

iv.

Statutory Remedies—some states allow owners of landlocked parcels the

power to obtain easement over neighboring land for access to a public road by

application to a public official with compensation paid to the landowner whose

property is burdened by the easement,

1.

Some courts find these statutes are unconstitutional: property may be

taken by eminent domain only for a “public purpose” and transfer of

property from one owner to another arguably does not constitute a

public purpose when its only goal is to protect the interests of an

owner, who should have bargained to avoid landlocked property.

2.

SCOTUS: public purposes are often served by transferring property from

one private owner to another; preventing scarce resource as land from

being rendered unusable or unalienable would constitute a legitimate

public policy

Prescriptive Easements

1.

Prescription—if one uses someone else’s property in a manner that is visible, continuous, and

non-permissive for a period established by the SOL, one can acquire prescriptive right to

continue that use. Prescriptive easements run with the land (are binding on subsequent ownersof the servient estate)

2.

Lost grant

a. English approach: presumed use that lasted for a long time had a lawful origin and that

it was based on a “lost grant”

i. American courts: originally followed this



b.

Modern view: bases prescriptive easement on the idea that easements are interest in

property and that such claims are lost if not brought within a time period for suing to

protect property rights

3. Elements

a.

All states

i.

Use of property belonging to another

ii.

Use be “open and notorious” or visible

iii.

“continuous” and/or “uninterrupted”

iv.

Last for the statutory period

b.

Some states

i.

Owner of the land “acquiesce” to the use

ii.

Exclusive

iii.

Under “claim or right” or “ownership”

c.

Burden of proof: generally “clear and convincing evidence,” though some require only

“preponderance of evidence”

4.

Use—when someone uses someone else’s property without permission, the question arises

whether the claimant has (1) exercised sufficient control to obtain title by adverse possession or

(2) has only engaged in specific acts that would result in a grant of an easement by prescription.

a. Enclosing land by fences or building structures on it is sufficient to demonstrate intent

to possess the property.

b. Use for passage; laying of utility lines; does not usually constitute possession and will

normally results in grant of prescriptive easement rather than title.

5.

Hard case (driveway)

a.

A driveway that encroaches on neighboring land,

i.

If the owner uses the property for driveway purposes for a sufficiently long

time, she may be held to have acquired prescriptive easement to continue to

use it for that purpose,

ii.

If she can demonstrate she treated the property as her own in a more general

sense, she may be granted title by adverse possession.

1.

Usually requires substantial acts;

a.

Example: Palazzolo v. Malba Estates (App. Div. 1986)—

defendant built retaining wall on property one foot from border

and failed to stop plaintiff neighbor from paving the strip

between the wall and the rest of plaintiff’s driveway.

2.

Turns on whether the record title owner has been “effectively

excluded” from the property. “Assertion of control” vs. “use of

another’s land.”

6.

Continuous—the use must continue over the course of the statutory period without significant

interruption.

a.

Need not be constant.

b.

Seasonal use is okay.

c.

Occasional sporadic uses not likely to satisfy the requirement.



d.

Use by other parties does not constitute interruption in use.

7.

Adverse

a.

Presumption: use is presumptively non-permissive or under “claim of right”

i. Majority view: most courts presume that use of another’s property is non-

permissive. Some say that such use is under a “claim of right” (the easement

claimant does not ask or feels entitled not to have to ask for permission from

the landowner).

1.

Landowner has burden to show the use was permissive to avoid being

subject to prescriptive easement or adverse possession.

ii.

Minority view: a fair minority of courts presume use is permissive rather than

adverse.

1. Reasoning: owners often do allow neighbors to cross over land as a

“neighborly gesture”

8.

Particular presumptions

a.

Wild, unimproved land—some courts presume use is permissive if the land is vacant,

wild, unimproved, unenclosed, or remote.

b.

Use of road built by an owner—some courts presume that use of a road constructed by

an owner is presumptively permissive.

i.

If road was constructed by an easement claimant, this presumption would not

obtain. (see McDonald v. Harris)

9. Family members—use is permissive if the parties are family members or otherwise have a

relationship that suggests that it is reasonable to conclude that the use is not adverse

10.

Hard case

a. Community Feed Store, Inc. v. Northeastern Culvert Corp. (Vt. 1989)—should the law

presume that use of another’s property is permissive or non-permissive?

b.

Arguments for non-permissive

i. Trespass unless consent is given

ii. Wrong to punish owner for being neighborly by forcing owner to accept

permenant intrusion

1.

Owners may not be aware of the fact that one who doesn’t object

impliedly consents

c. Arguments for permissive

i.

Landowner who does not object to encroachment impliedly consents to it

ii.

Long-standing use creates expectations that access will continue

iii.

Owner could easily grant permission formally or cut off access explicitly

11. Open and notorious—use must be sufficiently visible that a reasonable owner would be on

notice of the use.

12.

Acquiescence—most courts do not require a showing the landowner acquiesced in the adverse

use. The courts that do interpret it in different ways:

a.

Owner failed to do anything to protect her rights in the face of adverse use

b.

The owner “should have known”

c.

The owner “actually knew”



d.

The owner “knew and acquiesced” OR the use is so visible that acquiescence must be

presumed.

e.

Subjective vs. objective tests for acquiescence

i. Arguments against subjective test—states of mind are notoriously hard to

prove; application unpredictable

ii.

Arguments for subjective test—an owner who did not know of adverse use did

not care enough to police the land and should be presume use was with implied

permission

iii.

Arguments for objective test—what a reasonable owner should have known is

likely to be more predictable and works to better clarify when an easement has

been created

iv. Generally subjective knowledge is not required

13.

Exclusive—user must have excluded the record owner.

a.

Note: most courts do not include this element in the list required to establish a

prescriptive easement

i.

Reasoning: it is ordinarily possible for both the owner and the easement

claimant to use the property.

b.

Some courts do in include exclusivity: claimant use must be independent and not

contingent upon the enjoyment of a similar right by others.

i.

Does not mean claimant is the only one using the easement. Claimant can

obtain easement even if owner/third party also uses it

ii.

Two non-owners can have independent easements

14.

Prescriptive easements acquired by the public

a.

Third Restatement—public may acquire easements in this manner.

i.

Public use of roads, beaches

15.

No prescriptive easement claims against the government

16.

No negative prescriptive easements

a.

Failure to act on your own land does not violate anyone’s rights

b. Ancient lights doctrine rejected: US courts have all rejected the English doctrine of

ancient lights where an landowner who has enjoyed unobstructed access to sunlight can

acquire an easement of light

i.

Blocks development

ii.

Require every landowner to obtain a waiver of the easement of view

17.

Hard cases:

a. Negligence or bad faith

i. Warsaw c. Chicago Metallic Ceilings, Inc. (Cal. 1984)—plaintiffs negligently built

large commercial building and left insufficient space to allow trucks to enter.

Trucks encroached on neighboring property.

ii.

Court held because they did so without permission for the statutory period,

court granted a prescriptive easement

iii.

Arguments against

1.

wrong to reward bad faith



iv.

Arguments for

1.

good faith requirement requires state of mind proof; hard to come by,

unpredictable

2.

compensating negligence would require a standard which would involve

whether the claimant acted unreasonably

a.

compensation requirements could be enacted by the legislature

3.

ordinary application of statute of limitations should bar claim if it is not

brought within the period

b.

Trees—Most courts will not grant tree owners prescriptive rights to have their tree

branches hand over neighboring property; allowing owners to develop property more

important than long-standing tree invasion

c. Prescriptive right to commit a nuisance

i.

Hoffman v. United Iron & Metal Co. (Md. Ct. Spec. App. 1996)—court held

automobile shredding facility that had been operating for more than 20 years

acquired prescriptive right to commit a nuisance by excessive noise, explosions,

and air pollutants.

ii.

Nuisance was a violation of neighbor’s property rights and failure to sue within

the applicable statute of limitations meant those rights were lost.

iii. Arguments for

1.

Harms community interests

2.

Likely to affect many owners rather than just one single servient estate

3.

Transaction costs may bar owners from bargaining

Express Easements

1.

Formal Requirements to Createa.

Writing—express easements ordinarily created by agreement of the parties. Various

statute of frauds require them to be in writing to be enforceable.

i.

Written in deed

ii.

In the course of transferring or selling ownership or possession of land

b.

Easements reserved in third parties—many states hold that an owner may not transfer

a parcel of property to one person while reserving an easement over the buyer’s

property in a third party.

i.

Drafting around the policy

1.

Convey the property to the party who is intended to own the easement,

that party then conveys the property to the ultimate grantee, reservingthe easement over the property for herself

2.

Convey the easement to the third party; transfer the parcel, subject to

this new easement, to the grantee

a.

Some courts use estoppel to prevent the grantee from

interfering in the easement reserved to the third party



ii.

Some states changed the traditional rule, allowing reservation of an easement

in a third party

2.

Substantive Limitations—courts have traditionally limited the kinds of negative easements that

could be created. Four traditional categories of negative easements: light, air, lateral support,

and the flow of an artificial stream.

a.

Reasons for limitation

i.

It is hard or impossible to observe their existence

ii.

If it was not limited, any use could presumably interfere with a neighbor’s

rights; taken to extreme, it could prevent any new uses of property which a

neighbor might object.

b.

New negative easements

i. Conservation easements limit land development by restricting the use of land

for environmental purposes.

ii.

Historic preservation prevents destruction or alteration of buildings that have

historical or architectural importance

iii.

Solar easements protect access to sunlight for solar energy panels.

c.

Negative easements and restrictive covenants

i.

Limits on the creation of new easements (essentially just a land use restriction)

can be evaded by putting the restriction in the form of a covenant rather than

an easement.

1.

Distinguish:

a.

Negative easement—subject to limitations; generally

understood to be permanent; could be owned in gross

b.

Restrictive covenant—governed by changed conditions/undue

hardship doctrines; may be nullified; traditionally courts

generally refuse to recognize right to enforce a covenant in

gross

2.

Third Restatement: would abolish distinction between negative

easements and restrictive covenants treating them as servitudes.

Abolish limits on easements and covenants. Allow servitudes to be

modified if changed conditions have made it “impossible as a practical

matter to accomplish” the easement’s purpose. Easements terminable if

modification is “not practicable.”

3.

Running with the land (Appurtenant v. In Gross)

a. Appurtenant easement—run with the land, so that any benefit of the easement will

pass to any future owner of the dominant estate and the burden will be imposed on any

future owner of the servient estate

i.

Requirements

1.

Intended to run with the land

2.

In writing

3.

Owner of the servient estate purchased with notice of the easement



a.

Note: future buyers are on constructive notice of the writing in

an earlier deed if it is in the “chain of title” and can be found by

searching deeds in the recording office.

b. Easement in gross—attaches a particular right to an individual rather than to the

property itself. The easement in gross is often considered irrevocable for the life of the

individual, but can be revoked if the individual sells the property that grants him or her

that easement.

c.

Ambiguous

i.

Presumption in favor of appurtenant easements—when the deed is not clear,

nearly all courts voice a constructional preference for appurtenant easements.

1.

Maximize value of the land

2. Limit number of easements

3.

Appurtenant easements interfere with alienability less than in gross

ii.

Presumption in favor of easement in gross—in South Carolina, easement in

gross preferred

1.

Appurtenant easements constitute greater encumbrances on the land;

should not be enforced unless the parties clearly intended to so burden

the land.

iii. Refer to intent of parties

1. Suggests appurtenant

a.

“appurtenant,” “intended to run with the land”

b.

“heirs or assigns” or “successors in interest”

c.

Other factors: utility in obtaining access to dominant estate

2.

Commercial utility—presumption likely to be intended to be in gross.

3.

If easement has no value apart from ownership of the dominant estate

or if it is especially valuable to an owner it will be presumed to be

intended to be appurtenant.

4. Personal character—if the character of the easement or circumstances

surrounding its creation suggest that it was intended to be a private

accommodation to benefit a particular person for noncommercial

purposes likely to be found in gross.

iv.

Notice—easements are binding on subsequent owners of the servient estate

only if they have notice of them. There are three kinds of notice:

1.

Actual notice—the subsequent owners in fact knows

2. Inquiry notice—if there are visible signs of use by non-owners (the

owner should have known)

3.

Constructive notice—if the deed conveying the easement is recorded in

the proper registry of deeds in the proper place, and if the deed is in the

chain of title (the owner should have known)

4.

Scope, Location, and Extension of Appurtenant Easements

a.

Interpretation issues

i.

Scope of allowable uses encompassed by easement



ii.

Divisibility of the dominant estate

iii.

Whether the easement can be extended to obtain access to land other than

the dominant estate

iv. Whether the easement can be relocated by either the easement owner or the

servient owner

b.

Constructional presumption in favor of the grantee—many courts resolve ambiguities

in favor of the grantee. “An easement owner is entitled to full enjoyment of the

easement” and doubts should be resolved in favor of broad use of the easement.

i.

Easements reserved by the grantor over land conveyed to the servient owner,

should be resolved in favor of servient owner because burden should be on

grantor to explain clearly what rights are being reserved.

c. Scope determined by grantor’s intent—the scope of the easement is determined by the

intent of the grantor. This is gleaned from language in the deed and the circumstances

surrounding its creation, behavior of the parties, etc.

d.

Kind of use—issues of kind concern the types of uses contemplated by the parties when

the easement was created,

i.

Narrow interpretation—many court interpret expressly state uses narrowly

ii.

Broad interpretation-easement owners have traditionally been entitled to

“reasonable use” of the easement. “When an easement is created, every right

necessary for enjoyment is included by implication.”

iii. Hard case (general rights of way)—many cases address the question of how to

interpret easements for a right of way granted in general terms.

1.

Some cases rest upon interpretation of language in the deed

2.

Others rest conclusions on circumstantial evidence of the parties’

intent.

iv.

Overburdening—whether the easement owner has exceeded the scope of

rights encompassed by the easement by overburdening it through quantity or

intensity of use that goes beyond what the grantor intended when the

easement was created.

v.

Cox v. Glenbrook Co. (Nev. 1962)—servient estate, a resort business, granted an

easement of access to a portion of its land it sold to the dominant owner.

Dominant owner sought to subdivide and build 40-60 homes. Servient owner

claimed that would overburden the easement and exceed the scope of rights

given to the easement owner.

1. Court held: owner has right to subdivide land; question is whether use

by 40 to 60 homes would create “undue burden”; court remanded for

factual findings on this issue

a.

In general, cases finding subdivision creates undue burden are

hard to find because courts assume parties contemplated the

dominant estate would likely be subdivided; judges favor land

development



b.

Width—court held that the dominant estate had no right to

widen the road to make it a two-lane road. Width if not

specified by grant is determined by width at the time the

easement was initially granted,

i. Practically impossible to subdivide the dominant estate

ii.

Places burden on dominant owner to compensate the

servient owner for the increase while giving the servient

owner the entitlement to reject the offer

2.

Prescription—when an easement owner exceeds the scope of

easement for a sufficiently long period, a right to continue expanded

use may be obtained by prescription.

vi. Extension to other land—sometimes the dominant owner purchases or owns

another parcel of land next to the dominant estate. Questions arise as to

whether the easement owner can use the easement to obtain access to

neighboring land (not the dominant estate).

1.

Traditional view: appurtenant easements only benefit the dominant

estate and cannot be used to obtain access to other land unless

provided in the terms of the easement.

2. Some courts: an extended easement is permissible if it does not result

in material increase in the burden on the servient estate.

a. Brown v. Voss (Wash. 1986)—dominant owner purchased

another parcel, combined two parcels, built one home on the

enlarged parcel

i.

Court refused to enjoin (prohibit) the use and limited

damages to one dollar because easement was still being

used by only the dominant estate owner and the

burden on the servient estate had not increased.

vii. Relocation

1. Owner of servient estate wishes to relocate the easement to facilitate

construction on her land

a.

Traditionally courts have not allowed the servient owner to do

this without the consent of the easement owner.

b.

Recently some courts have begun to allow servient owners to

relocate the easement over the objections of the easement

owner. (adopted by Third Restatement)

i. Third Restatement—as long as changes are

“reasonable” and do not (a) significantly lessen the

utility of the easement, (b) increase the burden on the

owner of the easement in its use and enjoyment, or

frustrate the purpose for which the servitude was

created



ii.

If servient owner has relocated the easement without a

court order, the court may refuse to require restoration

to the original location if there has been no diminution

of benefit to the easement owner and the equities are

appropriate.

2.

Policy concerns—protects rights of dominant owner while allowing

development on the servient estate; easement owner may not in fact

find the new location to be as beneficial or convenient as the old

a.

Two ways of viewing easements:

i.

Meddlesome intrusion

ii.

Property owned by easement owner

3. Appurtenant easement cannot be converted to an easement in gross

without consent of the owner of the servient estate; with consent, it is

conceptualized as a new easement.

5.

Scope and Apportionment of Easements in Gross

a.

Scope—whether an owner of an easement in gross can extend the use to other

purposes.

b.

Transferability

i. Older cases—easements in gross are not transferable

ii. Modern cases—almost all courts now hold that easements in gross are

transferable when they are commercial in nature; but not transferable when

they serve a personal or noncommercial purposes and appear to have been

intended only to benefit the immediate recipient of the easement.Profits are

transferable. Recreational uses are commonly viewed as personal, not

transferable. Commercial easements in gross transferable by owner.

1.

Some jurisdictions hold al easements are transferable.

c.

Apportionment—the power to license others to use the easement

i. Exclusive—apportionable

ii. Non-exclusive—non apportionable

iii.

Third Restatement

1.

Divisible unless (1) contrary to intent of parties OR (2) division

unreasonable increases the burden on the servient estate.

d.

Economic Significance

i.

Easement owner that can license it will make money, rather than the various

owners of the servient estates

ii.

Clients only need to bargain with the easement owner, rather than all of the

servient estates

e.

Arguments for and against allowing apportionment

i.

Arguments for

1.

Facilitates certain industries (cable television)

2.

Apportionment is implicit

ii.

Arguments against



1. Easement owner should be able to transfer, but that doesn’t mean

they should be able to share rights (servient owner may not have

intended to give up all control)

2. Can’t assume servient owner did not reserve right to license another

person to use the easement

Terminating Easements—easements are terminated (1) by agreement in writing (release of the

easement by the holder); (2) by their own terms; (3) by merger (servient and dominant estate comes to

be owned by the same person; (4) by abandonment; or (5) by adverse possession or prescription of the

servient estate or by a third party

1.

Abandonment—mere nonuse does not constitute abandonment; the easement owner must

engage in affirmative action that clearly indicates intent to abandon the easement.

2.

Changed conditions

a.

Traditionally easements were not subject to being modified or terminated by changed

conditions.

b. Some courts would terminate easements because of “frustration of purpose”

i.

Frustration of purpose—purpose is impossible to accomplish; easement no

longer serves its intended purpose

c.

Third Restatement—would extend changed conditions doctrine to easements;

servitude can be modified if changed conditions have made it “impossible as a practical

matter to accomplish” the purpose. May be terminated if modification “not

practicable.”

3. Marketable title acts

a. Some states have enacted Marketable Title Acts that require easements and other

encumbrances be re-recorded periodically (30 to 50 years) to be binding on futurepurchasers.

i.

Purpose: limit how far back a buyer must look in the chain of title to determine

validity of seller’s title and existence of encumbrances on the land

ii.

Effect: renders unenforceable interests of insufficient importance to be re-

recorded in compliance with statute.



Covenants

Introduction

Real covenants—Traditionally real covenants were said to run with the land, binding the servient estate,

and benefitting the dominant estate if (1) the covenant was in writing, (2) the purchaser of the servientestate was on notice of the covenant at the time of the purchase, (3) the original covenanting parties

intended both the burden and the benefit to run with the land, (4) the original contracting parties were

in privity of estate with each other and subsequent owners were in privity with the original contracting

parties, and (5) the covenant touched and concerned the land.

Remedy: traditionally the assessment of damages.

Equitable servitudes—covenants were enforceable by injunctive relief if (1) the purchase of the servient

estate was on notice of the covenant at the time of acquisition, (2) the original covenanting parties

intended the covenant to run with the land, and (3) the covenant touched and concerned the land.

Omits horizontal and vertical privity requirements and substitutes a notice requirement

Formal Requirements

1. Writing—the statute of frauds requires covenants to be in writing to be enforceable against

subsequent owners. They are usually included in a deed, a lease, or deed of declaration. The

requirement of writing is satisfied if the original covenanting parties put it in writing.

Subsequent deeds do not to include the covenant.

a. “recorded restrictions in the chain of title”: the grantee is on constructive notice of

properly recorded restrictions in the chain of title and impliedly agrees to be bound by

such restrictions

b. Exceptions:

i. “Doctrine of estoppel”—

1.

The doctrine holds “a person to a representation made or a position

assumed where otherwise inevitable consequences would result to

another who, having the right to do so under all of the circumstances of

the case, has in good faith relied thereon and been misled to his injury.

2.

If the grantor made representations (including oral) to the effect that

restrictions exist, and the buyer relied on the representations, the

courts might enforce restrictions under the doctrine of estoppel.

c.

Map—sometimes developers may refer to restrictions in a plat or map, but fail to record

a declaration that includes the restriction and also fail to include any restrictions in the

deeds themselves.

i.

Majority view: most courts reluctant to enforce restrictions unless play clearly

indicates the extent and nature of the restriction. If the plat clearly refers to the

covenants, they will be enforceable against owners who take with notice of

them.



d.

Oral representations and sales literature

i.

Oral representations by developers are often accompanied by sales literature

that indicates a neighborhood will be restricted in particular ways. Such

representations may not be reflected in the deeds or recorded declaration. They

do not suffice as “writings” under the statute of frauds.

1.

“Doctrine of estoppel” –if the buyer rely on the representations (in

deciding to purchase), some courts will enforce the restrictions.

a.

This includes oral representations.

b.

Affirmative promises by developers likely enforced by damages

than injunctive relief.

2.

Arguments for enforcing oral representations

a. “common honesty”—a grantor who induces purchasers by use

of a plat to believe a representation, and the purchasers have

acted upon the inducement, is required by common honesty to

do what he represented he would do.

i.

Rooted in notions of “justice and fair dealings.”

3.

Arguments for strict enforcement of statute of frauds

a.

In some cases, performance is impossible. An representation is

enforceable only if the grantor engaged in intentional fraud.

2. Notice

a. Traditional view: Notice traditionally required for equitable servitude but not real

covenants.

b.

Modern view: Notice is a requirement for a real covenant.

i.

Restatement (Third)—servitudes may be extinguished by operation of recording

statutes if they are not evident and discoverable by reasonable inspection or

inquiry and are not recorded so that a buyer would be on constructive notice.

ii.

Case law: notice not a requisite for real covenants—generally involve situation

where purchasers have been on constructive notice

c. Actual and constructive notice—

i.

Notice can be proved by showing that the purchaser was actually aware of the

covenant (actual notice).

ii.

A buyer or lessee is on constructive notice is the covenant was recorded in the

registry of deeds as part of the deed or lease creating the covenant or a

declaration containing the restriction was recorded prior to the transfer of the

property affected by the covenant. A reasonable purchaser is expected to

search the title to find out whether the property is burdened by any land use

restrictions, and a buyer is deemed to know what she would have discovered

had she performed a search of her chain of title.

d.

Inquiry notice

i.

If any condition of the premises indicates that the property is encumbered, the

buyer or lessee is on inquiry notice.



1.

Observable condition—generally important only in affirmative

easements; unlikely to put buyer on notice of negative or restrictive

covenant

2. Uniform pattern of use—some courts hold buyers or on notice when

property has a uniform pattern of use (i.e. all single-family homes);

Buyer may be obligated to search deeds of surrounding lots to

determine if they are restricted by covenants binging current owners;

a.

“General plan” obligation—if enough of surrounding lots are

restricted by covenants, some courts hold that a “general plan”

has been established that burdens all lots within the borders of

the area covered by the general plan.

b.

“Constructive notice” obligation—some courts find buyer on

notice of general plan not on the basis of uniform land use, but

because they are obligated to research deeds to contiguous or

neighboring parcels to see if a uniform plan of restrictions was

intended to apply to the neighborhood.

ii.

Grantor/grantee covenant notice problems—courts are divided on the

question of whether buyers are on constructive notice of covenants that are

recorded in deeds relating to neighboring property. The kinds arise:

1. Grantor covenants—promises from sellers to buyers

2. Grantee covenants—promises from buyers to sellers

3.

Intent to Run

a.

A deed or lease that includes a restrictive covenant will be deemed to show the

grantor’s intent for the covenant to run to future possessors IF it expressly recites that

the covenant is made to, or is enforceable by, the “heirs or assigns” or “successors” of

the covenantee and/or if the covenant expressly states that it is “intended to run with

the land” or “to bind future owners” of the affected property.

b. Ambiguous documents

i. Majority view: If it is the kind of covenant that was intended to run with the

land, most courts will hold the covenant runs with the land.

1. (Presumption) “likely to be intended to run”—if they satisfy the “touch

and concern” test (meaning they restrict the use of the servient estate

and they are of use to owners of the dominant estates).

ii.

Minority view: some courts require clear evidence a covenant is intended to run

with the land. One court refused to presume that a land use restriction that

“touches and concerns” the land was “likely intended to run with the land.”

1.

Clear evidence applies wither to the text of the conveyance or from

surrounding circumstances.

2.

Rationale: covenants are an encumbrance on ownership; may inhibit

alienability; property rights should be construed in favor of free use

unless parties have clearly agreed to the contrary.

c.

Intent to run on one side only



i.

In some cases, the original covenanting parties may intend the burden to run

with the land but not the benefit, or vice versa. The covenantee can enforce

such a burden while it owns the land but the restriction will no longer apply

once the dominant estate is sold.

d. Three kinds of intent

i.

Intent to enter no enforceable legal relationship at all

ii.

Intent to create legal relations, but only to create a mere contract relationship

iii.

Intent to bind the land

4.

Privity of Estate

a.

The original covenanting parties each had simultaneous interest in the land at the time

the covenant was created and that the burdens and benefits of the covenant would pass

to successors to those interests.

b.

Two kinds of privity were required for a covenant to run with the land:

i.

Horizontal privity—relation between the original covenanting parties

ii.

Vertical privity—the relation between the original covenanting parties and their

successors in interest.

c.

The purpose of servitudes law is to impose restrictions on some real property interests

intended to benefit the owners of other property interests. The idea of privity is that the

law will attach such burdens and benefits to ownership of particular parcels only when

the burden to the servient estate is justified by a compensating benefit to one or more

dominant estates.

d.

Origins of privity concept (England)

i.

Traditional contract law rights were not assignable to others. Promises were

personal.

ii.

Courts developed an exception to this “principle of nonassignability.”

1.

“Privity of estate”—the benefits of a contract were assignable if they

were conceived as being attached to an ownership interest in land

created by two parties who had simultaneous rights to that land. This

allows the burden and the benefit to “run with the land.”

2.

Landmark case: Spencer’s case

a.

An affirmative covenant was enforceable because (1) it was

intended to be binding on future tenants, (2) the covenant

touched and concerned the parties, (3) there was privity of

estate.

i. Privity of estate in this context was mutual privity. The

landlords and tenants had simultaneous interests in the

same parcel of land because ownership rights were

divided between the tenant’s present estate (term of

years) and the landlord’s future interest (reversion).

3.

The question arose whether a covenant could be enforced if it were

contained in a deed rather than a lease. The problem here is that the

parties do not own simultaneous interests in the same piece of land. It



is privity (instantaneous) only in the sense that the covenant is created

at the fleeting moment the property interest is transferred from one to

another. English courts rejected this notion of instantaneous privity.

Privity required simultaneous interests in the same parcel (mutual

privity).

a.

Thus, in England, covenants law was limited to landlord/tenant

relationships.

4.

Development of equitable servitudes—litigants who could not obtain

relief in the law courts could approach the equity courts for relief from

the harsh common law rule.

a.

Landmark case: Tulk v. Moxhay —dropped the privity

requirement and provided that covenant that touched and

concerned the land were intended to be binding on future

owners, and they would be enforceable against buyers who

took possession with notice of those covenants.

b.

Distinguish: real covenants vs. equitable servitudes

i.

Real covenants—enforced by damages in law courts

ii.

Equitable servitudes—enforced by injunctions in the

equity courts

iii. Developments in the United States

1. In the US, privity has been extended from traditional landlord-tenant

relationships to allow enforcement of covenants contained in deeds of

sale.

a.

Most courts expanded the privity concept by adopting the

“instantaneous privity doctrine.”

i.

“Instantaneous privity”—privity exists if a covenant was

created in the context of the sale of property

transferring a property interest from a grantor to a

grantee.

ii.

In theory—at the moment the deed passes from seller

to buyer, the parties have a fleeting, instantaneous,

simultaneous interest in the property and the covenant

was thought to attach itself to the property interest

conveyed from the seller to buyer.

2. US also accepted equitable servitudes doctrine by which enforcement of

covenants by injunctive relief was allowed without regard to technical

privity requirements if the owner of the servient estate purchased with

notice of the covenant.

e.

Strict Horizontal privity—horizontal privity involves privity between the original

covenanting parties. It can be satisfied by either (1) mutual privity or (2) instantaneous

privity.



i.

Mutual privity—is established (1) if the covenant is contained in a lease

transferring possession of land from landlord to tenant, (2) if the covenant is

contained in a deed that divides property ownership between a present estate

and a future interest, or (3) if the covenant is contained in a deed conveying

ownership of land and one or both parties owns an easement burdening the

property of the other.

ii.

Instantaneous privity—established by placing the covenant in a deed of sale

that creates the restriction and impliedly or expressly states that the covenant is

intended to benefit remaining land of the grantor.

iii.

Problems with strict horizontal privity—the strict horizontal privity

requirements traditionally excluded three types of relationships that are today

thought to be legitimate sources of covenants that should run with the land.

1.

Agreements among neighbors—Excluded agreements among neighbors

that are not part of a simultaneous conveyance of another property

right.

2.

Later agreements—A covenant between a grantor and grantee not

entered at the same moment the affected property interest was

transferred.

3. Obligations to earlier buyers—it was not clear how earlier grantees

could sue later grantees for breach of grantee covenants contained in

the later deeds.

a.

Theoretically: at the moment the later grantees buy their land,

there is no longer any relationship between the grantor and the

earlier buyers.

b.

This problem was solved by implying a promise by such

grantees to benefit earlier as well as later buyers and enforcing

that promise despite the absence of contract between the later

buyer and the earlier buyer and despite the lack of privity of

estate between the later buyer and the earlier one.

4.

Not required for enforcement as an equitable servitude.

5.

Third Restatement—suggests strict horizontal privity is no longer part

of the law; allows enforcement of covenants whose benefit is held in

gross if the beneficiary has a legitimate interest in enforcing the

covenant.

f. Strict vertical privity—refers to the relationship between the original covenanting

parties and their successors in interest. In general, vertical privity exists when an owner

succeeds to the interest held by an original covenanting party.

i.

The rules developed to require that the succeeding owner to the servient

estate must receive the entire estate of the prior owner; this does not mean the

owner had to own the entire area of land but rather the successor should own

an estate that lasted as long as that of the prior owner.



1.

Estates of lesser duration—those that held estates of lesser duration

were not thought to be in strict vertical “privity of estate.”

a.

Landlord tenant

i.

Landlord leases property—tenant is not bound by

covenants that would have bound her landlord

ii.

Subletting vs. as assignment—when a tenant assigns the

rest of her leasehold, privity exists. It does not exist

when the original tenant sublets to another tenant and

retains the right to re-enter the property before the end

of the leasehold.

ii.

Relaxed vertical privity—some courts traditionally have required vertical privity

only for the burden to run with the land and have allowed a covenant to be

enforced by a succeeding owner of the dominant estate despite lack of strict

vertical privity on the benefit side.

iii.

Effect of strict vertical privity—vertical privity is not a formality because in

certain relationships it is impossible to establish (i.e. landlord-tenant). By

definition, a grantor in vertical privity cannot have retained a future interest.

1.

Consequences:

a.

Dominant owner cannot obtain damages against a tenant who

leased the servient estate and violated a covenant burdening

the land.

b.

A landlord may not be able to sue a subtenant for unpaid rent.

iv.

Third Restatement on negative covenants—to avoid these results in affirmative

covenants, the Third Restatement abolishes both the horizontal privity and

strict vertical privity requirement; those who succeed to interests in the servient

estate are burdened by restrictive covenants of which they were on notice

when they purchased the property. In addition, owners who do not derive their

title from one of the covenanting parties can enforce the covenant if they are

intended beneficiaries of it. This extends to adverse possessors.

v.

Third Restatement on affirmative covenants

1.

Affirmative covenant—are those that require the covenantor to

perform certain actions.

2.

Restatement provides that:

a.

burdens of affirmative covenants are enforceable only if they

can “more reasonably be performed by a person in possession

than by the holder of a reversion in the burdened property.”

b.

Benefits or affirmative covenants can be enforced by the lessee

if they are covenants to repair the property or if the benefits

can be enjoyed by the lessee without “diminishing their value to

the lessor and without materially increasing the burden of their

performance on the person obligated to perform the covenant.”



Substantive Requirements

1. Touch and Concern—a covenant meets this test if it has something to do with the use of the

land and/or is connected with enjoyment of the land. (i.e. restrictions on land use)

a.

May also require that the covenant affect the market value of the land by increasing the

value of the benefitted land.b.

Some courts hold that land use restriction touches and concerns the land if it affects the

parties interest as landowners such that benefits and burdens could not exist

independently of the parties ownership interests in real property.

c.

Reasonableness: the dominant consideration seems to be the conclusion that the

obligation and/or benefit is the kind that should run with the land, binding and

benefiting future owners. “Reasonableness, not esoteric concepts of property law,

should be the guiding inquiry into the validity of covenants at law.”

i.

Anticompetitive covenants and covenants that involved payments of money

were not enforced by courts. Under touch and concern doctrine, such covenants

do not relate to the land, but merely represented economic benefits.ii.

Covenants in gross also not enforced; did not touch or concern dominant

estate; restriction was not balanced by any compensating benefit to other land.

d. Third Restatement—would abolish the touch and concern requirement and provide

instead that covenants will run with the land unless they are unconscionable, without

rational justification, or otherwise violate public policy.

i.

appurtenant benefits and burdens should run with the land when they are tied

to ownership or occupancy of land in the sense that they obligate the owner or

occupier of a particular unit or parcel in that person’s capacity as owner or

occupier of land.

1.

Appurtenant v. in gross—a servitude is appurtenant rather than ingross or personal only “if it serves a purpose that would be more useful

to a successor to a property interest … than it would be to the original

beneficiary.

e.

Covenants to pay money

i.

Homeowners association fees—generally enforceable; strong relation to land

use: (1) benefits landowners, (2) increased value of the property

2. Enforcement in Gross

a. Intent to allow original covenantee to enforce in gross after transfer—covenants that

touch and concern the use of land for the benefit of the owner of neighboring land are

presumed enforceable only by the current owner of the benefitted parcel.

i.

Some courts may allow enforcement of the original covenantee if the parties to

the original covenant intended to allow enforcement after the transfer of the

dominant estate, but they are extremely reluctant to find such intent absent

explicit language to that effect.

b. Covenants whose benefits are initially held in gross



i.

Traditionally the benefit of the covenant could not be held in gross even if the

parties intended to create such an arrangement.

1.

A landowner may make an enforceable contract to restrict her own land

use, but the obligation will not pass to future possessors if the promise

does not benefit the owner of another parcel.

2.

Cons: restricts “free use” and “marketability”

3.

Pros: can be justified by sufficient compensating benefit

ii.

Exceptions: homeowner associations, charities, governments.

c.

Restatement (Third)—would allow enforcement in gross only if the beneficiary of the

covenant has a legitimate interest in enforcing the covenant.

Implied Reciprocal Negative Servitudes

The law of equitable servitudes provided the legal basis for reciprocal enforcement of negative

servitudes among homeowners in subdivisions and later on, in condominium arrangements.

o

It allowed (1) reciprocal enforcement when the deeds in question formally restricted

use of the land by the technical requirements of privity were not met and (2) it imposed

obligations on land purchasers to research titles both to parcels they were buying and

also neighboring parcels that had been owned and conveyed by the seller of the land.

If the developers in a subdivision placed uniform restrictions, courts might

conclude the developer had intended to create a general plan of restrictions.

There are enforceable.

Early v. later buyers

o

Technical problems in mutual enforcement of covenants arise from early buyers against

later buyers.

Developer subdivides lots and sells them in succession. First buyer agrees touse for residential purposes.

Later buyers can enforce the covenants in the deeds to earlier sold property as

successor owners of the dominant estate.

Earlier buyers cannot enforce the covenants contained in the deeds of later

buyers under real covenants law because at the time the later buyer agrees to

restrict, no privity of estate exists between the earlier buyer and the later buyer.

Grantor Covenant as solution—when the developer includes both a grantor covenant and a

grantee covenant, the privity problem goes away.

o

Theoretically:

The later buyer can enforce the grantee covenant made by the earlier buyerbecause the earlier buyer’s promise to the grantor was intended to benefit the

grantor’s remaining land.

The earlier buyer can enforce the grantor covenant against the grantor’s

(developer’s) successor, the later buyer if the deed was recorded and the later

buyer is on constructive notice of the promise between the grantor (developer)

and the earlier buyer.



Third party beneficiary doctrine allows contractual promises to be enforced by someone for

whose benefit a promise was made even though the promise was not made to that person.

o

i.e. earlier buyer may sue as the third party beneficiary of a promise between the

grantor (developer) and the later buyer.

o

In such a case, the promise is intended to benefit not only the developer and the

developer’s remaining land, but also lots previously sold in the same subdivision.

Rationale: courts refer to “general plan” or “common scheme.” If all the lots in

an area previously owned by a single grantor are similarly restricted, this

provides evidence that the developer intended the restrictions to be mutually

benefitting and reciprocally enforceable; the owner is restricted and entitle to

enforce the same restrictions against her neighbors.

Factors showing existence of general plan

Presence of restrictions in all or most deeds to property

Recorded map/plat

Presence of restrictions in the last deed

Observance by owners of similar development of their land and

conformity to the written restrictions

Language stating covenants are intended to run with the land

Recording of a declaration that covenants are intended to be mutually

enforceable

Supplements

o

Oral statements

o

Sales literature

Third Restatement—abolishes horizontal privity requirement and provides that restrictions in

deeds intended to benefit other property will be mutually enforceable if the purchasers havenotice of them when they purchase.

Remedies

Damages and injunctions are both available today

o Traditional

Real covenants enforced by damages

Equitable servitudes enforced by injunctions

o

Third Restatement

Any covenant that is enforceable by damages is enforceable by injunction

Denial of injunction

o

Lack of notice defense

o

Injunctive relief is overly burdensome

o

The person seeking the injunction has acted unfairly

Damages denied, injunction awarded

o

States the enforce the privity requirement:



when privity is lacking, restriction may be enforceable by injunction as

equitable servitudes, but will not be enforceable by damages

o

owner burdened by restriction, but not in chain of title

o Rationale: protects reliance interests of the covenantee through injunction while

limiting servient owners from unlimited financial exposure to owners outside the chain

of title

Injunction v. damages

o

Contract law approach: damages are usual, injunctions are awarded only when

damages are inadequate

o Property law: damages often thought inadequate because value attached to land and

desire for free use

o

Argument for damages

Damages are the usual remedy

Efficiency

Allows promisor to breach compromise

Protect reliance interests of promisee

If promisor pays, promisee has benefit of the bargain and protection

from financial harm; promisor has more valuable use of the land

Maximize joint value of landlord/tenants property rights

Protects liberty interests—freedom to change their mind

o

Argument for injunction

Fairness

“Doctrine of efficient breach” transfers property rights from promisee

to the promisor against the will of the promisee

o

Forced sale, at price determined by court; may be less than the

owner’s asking price

Efficiency

If the court granted injunctive relief, servient owner would have to offer

dominant owner enough to meet the dominant owner’s asking price…

this is done not by market value, but by bargaining of parties.

“efficiency” measured by whether the redistribution will benefit the

new owner more than it harms the old owner; if no sale, then value to

current owner is greater than value to the potential owner

o

Forced sale is not efficient because refusal to sell entitlement

indicates value to dominant owner exceeds value to servientowner.

Interpretation of Ambiguous covenants

Intent v. free use—

o

Traditional view: courts traditionally interpreted ambiguous covenants in the manner

that would be “least burdensome to the free use of land”



o

Modern view: is to interpret the intent of the grantor. This must be shown by express

language in the deed or declaration, but may be supplemented by extrinsic evidence

where necessary to interpret an ambiguity.

o Third Restatement: suggests it is no longer acceptable that courts should err on the side

of unburdening property from restrictions.

Modifying or Terminating Covenants

1. Changed Conditions—covenants will not be enforced if conditions have (1) changed so

drastically inside the neighborhood restricted by the covenants that (2) enforcement will no

longer be of substantial benefit to the dominant estates.

a.

Third restatement: (1) uses terminations rules in place of “touch and concern test;” (2)

modification of covenant in lieu of termination if modification will allow the covenant to

serve its original purpose.

b.

Justifications: implements implied intent of parties; promotes alienability of land;

permitting enforcement after they’ve lost utility reduces land values and turns law into

an instrument of extortion.

c.

Counterarguments: parties did not provide covenant would terminate without

unanimous consent; inefficient to force beneficiary to sell an entitlement

d.

Development: began as equitable servitudes, extended to Real Covenants, and now

easements

2.

Relative Hardship—a covenant will not be enforced if the harmed caused by enforcement, that

is hardship to the owner of the servient estate, will be greater by a “considerable magnitude:

than the benefit to the owner of the dominant estate.

a. Hardship great, benefit small—likely no

b.

Hardship great, benefit great—likely noc.

Third Restatement—treats relative hardship not as a basis for terminating or modifying

servitudes, but rather a factor

i.

Hardship great, benefit small—non-enforcement may be appropriate, but some

amount of damages is appropriate to compensate for loss of benefit of the

covenant

3. Conduct of the Parties

a. By their own terms—covenants that terminate within a stated number of years

b.

Merger—burdened and benefitted estates come under ownership of the same person

(of burdened and all benefited estates)

c.

Release—all parties affected by the covenant may agree to terminate the covenant orrelease the property from it (with consent of all benefited estates)

d.

Equitable limitations on enforcement

i. Unclean hands—the complaining party violated the covenant

ii. Acquiescence or waiver—(more useful in covenants context) servient owner

violates the covenant and the servitude beneficiary fails to object, then that is

waived



1.

Equitable doctrine; court will pay attention to what you acquiesced to

2.

Laches—owner has waited too long to enforce her rights and may be

barred from doing so, if the other party has changed her position in

reliance on such failure (was defendant prejudiced?); depends on

statute of limitations (sets a suitable waiting period)

iii.

Abandonment—beneficiary relinquishes rights created by a servitude; the

beneficiary must affirmatively act in a manner inconsistent with the

continuation of the servitude (demonstrates intent not to enforce easement);

recognized in context of “multiple or repeated violations”

iv.

Equitable defenses (for equitable servitudes)

1. i.e. clean hands, laches, estoppel, Bona Fide Purchaser, “balancing of

hardships”

a.

Balancing of hardship—how much would defendant/plaintiff be

hurt if the equitable remedy is granted or denied? Court may

ask for damages

v.

Estoppel—(Sturley says more meaningful in easements context) if a servitude

beneficiary represents to the owner of a servient estate “by conduct, words, or

silence, an intention to modify or terminate the servitude” she may be estopped

from enforcing the covenant if the servient owner changes her position in

reasonable reliance on such representation, if reliance is reasonably

“foreseeable.”

vi.

Change of neighborhood doctrine (doctrine of changed circumstances) (See 1)

vii.

Adverse possession—open and notorious violation of covenant without

permission for statutory period may terminate the covenant by prescription.

viii.

Miscellaneous (condemnation, bankruptcy, Recording Act, foreclosure, new

statutes)

4.

Statutory Regulation

a. Marketable title acts—terminate restrictive covenants if they are not re-recorded after

a specified period of time

b.

Statutory limits—rigid time limits on enforceability of covenants and do not let them be

discontinued by simply re-recording them.

c.

Statutory changed conditions provisions—some states adopt statutes that expressly

adopt versions of the changed conditions doctrine

Licenses and Easements, Covenants

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