Private Land Use Controls


Covenants, servitudes, and planned communities



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Covenants, servitudes, and planned communities


Chapter 20 (pp. 934-970, and 1001-1018)

The rest of the private land use section will be devoted to covenants and private residential governments. We start with the basic requirements spelled out in pp. 934-946 and exemplified by the Wheeler and Morse cases. By the end of this segment, you should be able to identify burdens and benefits, tell which, if either, needs to run, what kind of privity is required, and ultimately, whether the covenants will run.

A, owner of Whiteacre, and B, owner of Blackacre, wish to agree that Blackacre will only be used for residential purposes.

Benefit runs with the land: If A sells to C, C may enforce the covenant against B, even though C was not originally a party to it.

Burden runs with the land: If B sells to D, A can enforce the covenant against D, although D was not originally a party to it.

Three requirements have to be fulfilled to enable a covenant to run with the land at law:



  1. Intention: A written instrument satisfying the SOF. The modern approach is to determine intent based upon an examination of the instrument as a whole.

  2. Touch and Concern: a method of restricting kinds of promises that may devolve to remote parties. Only those which touch and concern the land itself will run to these subsequent holders. The question is determined by the court’s discretion based on the facts of each case.

  • Burden: If the promisor’s legal relations in respect to the land in question are lessened – his legal interest as owner rendered less valuable by the promise – the burden of the covenant touches or concerns that land;

  • Benefit: If the promisee’s legal relations in respect to that land are increased – his legal interest as owner rendered more valuable by the promise – the benefit of the covenant touches or concerns that land.

  • Where the parties, as laymen not as lawyers, would naturally regard the covenant as intimately bound up with the land, aiding the promisee as landowner or hampering the promisor in similar capacity, the requirement should be held fulfilled.

  1. Privity: for the burden of a covenant to run at law, there had to be horizontal privity between the covenantor and covenantee and vertical privity between covenantor and assignee.

  • Vertical Privity: requires that the party suing or being sued have succeeded to the same estate as the original covenantee or covenantor.

  • Horizontal Privity:

  1. A and B could make a covenant that would run with the land only if A and B were in a tenurial relationship, as landlord-tenant or reversioner-life tenant

  2. Simultaneous Interest Rule: requires that covenantor and covenantee have a continuous and simultaneous interest in the same property.

  3. Either that a continuing tenurial relationship exist or that the parties impose the covenant while the land is being conveyed from A to B.

Spencer’s Case

Facts: P, the landlord, leased realty to a tenant. The tenant covenanted for himself, etc., to build a brick wall on part of the leased land. T assigned his interest to J, who assigned to D.

Issue: D refused to build the wall, P brought an action of covenant against D.

Rule: The covenant was not binding on D, as the wall was not in being. The court laid down four principles for the resolution of the issue of when a burden shall run with the land:

  1. When the covenant extends to a thing in being (“in esse”), the covenant shall run with the land and bind the assignee even if there are no express words in the instrument purporting to bind a later assignee.

  2. If the covenant has to do with a thing not in being, there must be express words evincing an intent to bind the assignee.

  3. The covenant will run and bind the assignee only if it “touches and concerns” the lease property and is not merely collateral.

  4. The covenant will run and bind only those in privity of estate with the lessor and lessee.

Wheeler v. Schad

Facts: After already entering into agreement, the parties later agreed to conduct and maintain a dam to be owned and enjoyed jointly and in equal shares. One party mortgage his mill. The new owner was in possession when the dam was damaged, requiring extensive repairs. When approached by the other parties about cost and repair, D told them to proceed. After the work was done, D refused to pay. The lower court found for D, P appeals.

Nevada 1862



  • H, Du, B Ds, I, McW, Duv, purpose of the land is to erect a quartz mill. Crushes oar and takes out quartz.

  • H, Du, B Ds, I, McW, Duv, six days letter they have an agreement to build a dam and a flume and to maintain it.

  • B Wheeler

  • 1868, Ds, et al Schad

  • Damage done to dam and flume and something has to be done about it, original grantors contact Schad, need to fix it. Expect Schad to uphold the bargain made 6 days after the grant.

  • Wheeler et. al. v. Schad, because he took over the property.

Issue: D is liable on the agreement entered into between D’s grantors and P; and secondly, if not, that he is so upon his own agreement with P, authorizing the work to be done.

When we can make people perform promises they did not make, and when we will allow people to enforce promises when the promise was not made to them? And when they didn’t agree to abide by the promise? There are 3



  1. Intent: the parties to the original agreement must have intended that it bind their heirs and assigns. And must have intended that heirs and assigns. Must have intended it run with the land. The heirs and assigns of the coventee have the right to enforce it. And the heirs and assigns of the coventor have the right to perform the promise.

  2. Touch and concern: two test,

  1. Berger intent effectuation test: someone who comes to the agreement, in a deed which may be burdened or benefited by a promise, or in a deed registered in the registry of deeds. If when they see the promise they think of course these people would want this promise to be binding on me, otherwise their intent to have the covenant run with the land would be meaningless.

  2. Scientific Test: Clark, 943-944, if the promisor’s legal relations with respect to the land in question are lessened, the burden of the covenant…Is the promisor giving up some legal right that she previously had that relates to the land? More objective, legal relations with respect to the land, still a lot of room for interpretation, but clearly narrower more difficult to meet than the intent effectuation test.

  • Burden: If the promisor’s legal relations in respect to the land in question are lessened – his legal interest as owner rendered less valuable by the promise – the burden of the covenant touches or concerns that land;

  • Benefit: If the promisee’s legal relations in respect to that land are increased – his legal interest as owner rendered more valuable by the promise – the benefit of the covenant touches or concerns that land.

  1. Privity: 2 kinds

  1. Horizontal: describes relationship between promisor and promisee at the time of the original promise. Describes relationship between the promisor and his heirs and assigns and the promisee on the other hand and his heirs and assigns. Pr Pee

H/Assee H/Assign

Covenant Analysis:

  1. Who has the benefit/burden of the covenant here? Because mutual agreement with both parties, there is a benefit and burden to both parties. Mutual reciprocal promise. Interpreting actual cases, concrete agreement, one party wants another to do something or refrain from doing something. In this case, Wheeler has the benefit, Schad has the burden.

  1. Could envision a case, Schad v. Wheeler, but that was not the case. The agreement is reciprocal, and true of potential dispute. But when get to a concrete dispute only one benefit and one burden. One party trying to enforce a promise against another. May be other benefits not being enforced in the lawsuit.

  2. Ask what is the particular purported obligation P is trying to enforce. As to that obligation, who has the benefit and who has the burden. Here two obligations, to maintain and to pay, but only the obligation on the part of D that is being enforced. P has performed their obligation, they were burdened by the covenant and they performed. Once there is a breach, conceivable that both sides may breach, but in any given claim one party is going to have the benefit and the other will have the burden.

  3. Frequently one party will be benefited and others will be burdened and it will be unilateral. The grantor will often hold only benefits. Often transforms into the home owner’s association. Holding portfolio of benefits and they have the right to enforce benefits against the homeowners, owners of land that have burdens.

The plaintiff also has the benefit and the defendant always has the burden. When the dispute has developed to A sues B, A has benefit, and B has the burden. Not always developed to the stage of P and D.

Here Wheeler has benefit, trying to enforce an obligation on Schad, an obligation Schad never made.



  1. Which if either (benefit or burden) has to run? Does the benefit run? In the context of the promise that is trying to be enforced here, we can describe Herd, Dosier, B, etc. as grantors and as to the promise they were the ones’ who promised to perform it. They did what they were supposed to do so they were they promisee, obligation to pay ½ of the repair cost, they were the promisees to whom it was being promised. Ds, I, McV, DV were the promisors, promised to maintain and pay for the maintenance of the dam. With regard to this obligation they were promisors. HDB were promisees. The promisor becomes the covenantor, promisee becomes the covenantee.

  1. Covenantee is a subcategory of promisee.

  2. Does the benefit have to run, if it does not need to run you don’t have to decide if it does run at all. Making the be

  3. Making the burden of a promise run with land to people who never promised to do it is even more difficult.

  4. If 10 days after agreement this problem occurred. HDB said to DIMD we are going to repair it, DIMD said go ahead. What defense would DIMD have, the benefit has not run, nor has the burden. More importantly, do we care whether the benefit runs? Just a regular contract, the land has not been passed, all the original parties are still there, don’t have to worry about covenants running. May be some other defense, but doesn’t concern covenants running with the land because neither the benefit nor the burden has to run.

Have to run means have to run to enforce the covenant in this case? Question of if still have original parties or new parties.

Benefit does not have to run: There are two original covenantee’s in this suit, if just Wheeler then none of the original covenantee’s here. But the benefit does not have to run because original covenantee’s still here. Need to be part of the original agreement and part of this lawsuit. Don’t have to enforce a promise not made, because promise made. Dosier and Hurd are P.

Burden does have to run: because we are enforcing promise made to the original covenantor because the original covenantor is not there. Schad was not an original party.

When come to promise in land and the two parties are the people that made and received the question, end of discussion. This is a contracts question, if someone makes it and tries to enforce it, don’t have to worry about it running with the land. Its only when one of the two sides was not present at the original promise we begin to think about it in property. If P, with the benefit of the promise, trying to receive something from original promise, then the benefit of the promise goes to somebody that was not there. Could say, I didn’t make the promise to you. Have to find some way to make it possible for P to get the benefit of a promise that she was never part of it. So we make the promise run with the land, to find a way to enforce the promise. If it has to do with land and the burden runs with the land.

  • Who were the parties to the original promise

  • Who are P and D, if the answer is different from first one, either the benefit or burden or both have to run.

You can enforce it against an original party for the entire amount.

  1. Does it run? For it to run, 3 part test: Intent, touch and concern and privity. Different depending on trying to make a benefit or burden run because its harder to make a burden run than it is to make a benefit run. Bad example since the benefit does have to run.

  1. if it were just Wheeler, the benefit would have to run?

Intent: probably so, they were looking to the future and intended to keep it up. Can imagine a situation where it would not run but makes more sense if both parties can rely on it into the future and both parties to contribute to its upkeep and if they don’t, can sue them. Why would you make a promise that would not be maintained into the future? The benefit is the obligation to pay.

Touch and Concern: intent effectuation test (Berger Test). Would the reasonable person coming to this agreement be on notice that the parties intended this to run? Unless intent clearly explicitly made if normally thought not to run. But arguing functionally, same analysis as. Look at the promise outside of the deed and ask is this the kind of promise that someone coming to the situation, the promise, would that person expect it to be necessary, the running of that promise be necessary to subsequent owners to realize that intent. Hard to think of when you would have intent and not have touch and concern.

More difficult under the scientific test: Taking on a legal right, and giving up right not to be obligated. Does it affect their legal relations to the land? No, its an obligation to pay money, repair a dam. But not an obligation to do anything on the land that Schad has bought. Not a restriction on use of land, not a servitude. No restriction on Schad’s legal relationship to this lot. The scientific test would say no touch and concern where intent effectuation test would say yes touch and concern.

Legal obligation to the land: bundle of rights that owners to land get, the right to alienate, develop, exclude others, possess it, go on it. None of those rights was diminished in any way by DIMD’s promise to maintain a dam which is on a separate plot of land from where DIMD build their mill and conveyed to Schad. If the dam was on Schad’s land, different story.

How does this effect water rights? Riparian jurisdiction, anyone along the watercourse gets rights to the flow incident to the land. Simultaneous interest in the right to the flow.



  • We don’t know if riparian jurisdciton, Nevada PA

  • Even if was riparian would mean that every agreement between riparian owner as long as applied to the flow of water would constitute touch and concern and give you privity. The point of these three requirements is to make it difficult to enforce promises against people who didn’t make them. Done for non-economic reasons, trying to control wealth. Courts set up obstacles to that, these are the 3 obstacles.

  • There are rights to the flow, shared interest in the water and through the water and through the land but the courts did not consider that enough.

Prior arguments for Intent/Touch and concern the same for benefit and burden.

Privity:

For the benefit to run: requires vertical but not horizontal privity. Here the benefit does not have to run so don’t have to inquire if vertical between Herd, Dosier, still there. If we had to inquire the answer would be yes there is vertical privity because Wheeler got the same estate B had. FSA in lot with others in common. B conveyed a FSA, vertical privity. Don’t

For the burden to run: needs vertical and horizontal privity. Schad and DIMD, yes vertical because got the entire estate. Has to have the title by the time the lawsuit begins. The burden has to run because Schad needs to be obligated to pay. There is intent/touch and concern for one test/vertical privity between DIMD and Schad. Is there horizontal privity? No horizontal privity because they are neighbors. Jargon for the relationship between the promisor and promisee in relation to the land. 3 possible test:

  1. Tenurial Test: must be a tenurial relationship between promisor and promisee in order for horizontal privity to exist and for the burden to run against the person that didn’t make the promise. P. 938, landlord-tenant. Most common relationship in which waste applies. Also most common tenurial relationship where covenants that run with the land are enforce. Satisfies horizontal privity. Most common test. Remainder person-life tenant is one.

  2. Simultaneous shared interest in land, Morse v. Aldrich. If the dam was between the two lots and had to go one to maintain it. Hypo

  3. Grantor-Grantee relationship. If the promisee and promisor are in a grantee-grantor relationship at the time of the promise then have horizontal privity. Not so here because the promise occurred 6 days after deed. Needs to be one instrument, but here the two instruments are disconnected. Not utterly disconnected but they are separate. Separate transaction, relationship between HDB and DIMD, they were mere neighbors trying to set up covenant relationships, fail because don’t have horizontal privity.

Rule: D is not liable for the work that was done because the agreement relied upon by P was not part of the initial covenant that was passed in the conveyance to D, but occurred separately so that D cannot be bound by it. The court said, “it is impossible to merge the deed and agreement into one instrument, and construe them as if executed simultaneously. Unless they constituted one instrument or transaction, it cannot be claimed that the covenants of the agreement run with the land so as to charge the grantee of the covenantor.” There is no touch and concern nor privity.

3/16

Morse v. Aldrich

Chronology: Morse is P, Aldrich is D.

- 1794 Original conveyance from Cook Hull, conveyance of 13 acres of land. Including privilege to Hull, easement full right of ingress/egress/regress– may be something more, to improve and use land for fish ponds, taking soil out - profit.

- Hull conveys the same thing to Morse. Hull has the full liberty to dig out and carry away the whole or any part of the soil.


  • 1809 Cook conveys to Morse, promises to draw off the fish pond – Cook owns the fish pond.

  • 1833 Cook dies, land goes to Cook’s heirs, Aldrich inherits

  • Aldrich leases land to Lee, subject to covenant not to drain the pond, Aldrich said that was OK

  • 1835, September, Morse asks Aldrich to draw off the fish pond so that he can take his mud, Aldrich says no way.

  • Morse sues Aldrich

Facts: Cook, D’s ancestor, conveyed to Hull in fee. Hull conveyed the same premises to P. Cook covenants with P, his heirs and assigns,

“that he will draw off his said pond when thereto requested by said Morse, in the months of August and September, not exceeding six working days in the whole, in each year, for the purpose of giving said Morse an opportunity of digging and carrying out mud, etc., as long as there may be mud in said pond, and no longer.” Cook does not covenant, in express terms, for his heirs and assigns.

P requested D draw off the pond, in order to get the mud out, D refused.

Issue: whether this covenant is such as is binding upon the heirs of the covenantor? Whether the covenant is a real covenant, running with the land, which Ds inherit from their ancestor, the covenantor?

Morse trying to enforce the promise of 1809. Cook Morse. Cook has the burden, to draw off the pond, Morse has the benefit, gets the mud. Aldridge

Lessee

In Morse v. Aldrich: Morse gets Benefit, Aldrich has the burden



Benefit does not have to run: Morse has the benefit in both cases.

Burden does have to run: Cook is dead, Aldridge not a party to the original covenant and Morse trying to enforce the burden against person that was not a party to the original transaction.

Concerned with against whom and by whom an obligation is enforceable. The parties are separate, some will have to perform and others will not. Think of this as a cause of action, P is an eligible P, and D is an eligible D. The criteria for determining is easier for P than for D. You have to prove that each party is an appropriate party. The party with the burden wants to get out of it.

Morse said it would run for his heirs and assigns and Cook did not. Makes a difference as to whether it will run, influence intent/touch and concern. More questionable because Morse specifically said heirs and assigns and Cook did not. Clear that you wouldn’t have this kind of agreement unless the parties intended the agreement to run.



Intent: taken care of. Assume Cook and Morse intended for this agreement to run. If both used heirs and assigns language, strong evidence of intent to run, if its not there you have to look somewhere else. The nature of the agreement, the ability to invest money, makes it possible to make a profit from long term investment is the kind that people don’t make unless its within a time they can get their investment back or that if it is conveyed it should be maintained.

Touch and Concern

Berger Test: Intent effectuation, since there is intent, someone would come to this agreement and would expect the agreement to run if they knew of the agreement. The easements would survive. If these are tied to an easement, if the easements survive you would think the things that make the easement valuable would also survive.

Could also say, Morse has built these fish ponds dependent on access to the pond bed, was not a promise he would have relied on if he didn’t think he could. Restates the intent element.

Scientific Test: whether the covenant affects the legal relationship of Aldrich to the land. He has the burden of allowing the use of his rights/land in a covenant Morse is trying to enforce. It is effected, if you are required to drain off your fish pond it is a restriction on your absolute rights to use your land.



Privity: Requires horizontal and vertical privity. Vertical satisfied because Aldrich receiving same estate as Cook, not divided. Horizontal privity, have to look to 1794, when the conveyance was made, the initial privilege, easement created. Relationship between Cook and Hull was grantor – grantee. 3 test for horiz privity, for 2 of the 3 grantor – grantee is not enough. Does not equal horizontal privity.

Remember Wheeler v. Schad, transaction at time 1 grantor – grantor, transaction at time 2 was an agreement. It may be that they were utterly disconnected, transaction 2 was a clarification and expansion of transaction 1, forgot to put in something. Here have 15 years, disputes along the way, restate the agreement. The connection between transaction 1 and 2 is close enough to call them identical for purposes of horizontal priv, but in Wheeler there is no horizontal privity and in Morse there is. Why?

Tenurial relationship doesn’t exist.

Shared interest in land: Cook using for fish, Morse using for the mud but they are both using the land.

Difference is that C and M in 1809 were not merely neighbors, in W v. S they were merely neighbors, one had sold to the other a few days before but at the time of the contract they were merely neighbors. In 1809, C and M share real property interest in the pond that lies between their two properties, enables the contract for that pond to have a real property nature as well as a contract nature and to therefore bind Aldrich.

Why didn’t Morse sue the lessee? Lessee promises Aldrich to draw it off, speculation, Aldrich gives it to him, Lessee refuses to draw it off. Morse sues. Morse wants to get the pond drained off, but lessee says no, Aldrich owns the land but doesn’t have possessory rights so can’t go on and drain the land. Aldrich’s lease with lessee should have contained the covenant. Perhaps Aldrich waived provision, Morse is suing Aldrich to make him sue the lessee. Morse can’t sue the lessee because the lessee promised but he didn’t promise to Morse. Also lessee doesn’t have vertical privity, doesn’t have the same estate. Doesn’t mean that he couldn’t sue lessee now. How could he sue now? Third party beneficiary contracts.



Rule: If the covenant in question runs with the land, it is clear that Ds are liable; and it is immaterial whether the heirs and assigns of the covenantor are named in the covenant, or not. It is necessary that there should be privity of estate. At the time these covenants were made, there was privity of estate between the parties in that part of the mill pond described in the grant to Hull. This covenant therefore, is a real covenant, running with the land, and is binding on the heirs of the covenantor.

The burden did run, the original grant included the right for Cook to keep a fish



Real covenants running with the land: granted or demised, such covenants are said to be inherent in the land, and will bind the heir or assignee though not named.

Neponsit, Nicholeson 946-963

3/17

Special Exercises on Burdens/Benefits

A B


Agreement 1: A covenants not to use land for anything but residential

Agreement 2: A and B exchange such covenants.



  1. In agreement 1, who has the benefit/burden?

A has the burden and B has the benefit

A to C and C attempts to build a store, B v. C. Which has to run? The burden has to run because A had the burden and conveyed to C and C never agreed to do anything, but has to do it just because she bought that land.

A to C and B to D and D v. C, which has to run? Both have to run for the same reasons.

2) In agreement 2, who has the burden/benefit? Both have a burden and benefit



Privity Exercises:

  1. A and B are neighbors. They exchange promises to use residentially. A to C. B begins to run a store. C v. B.

  1. Who has the benefit/burden? Both have b and b? But in

  2. Must the benefit run? Yes because B didn’t promise anything to C. Burden doesn’t have to run because B is still on the land, he made

  3. Do you need HP? No

  4. Must the burden run? No

Who wins? C

NO privity because they are mere neighbors, no horizontal privity.



  1. Same as #1 except then B to D and C v. D? Who wins and why? D would win because the burden has to run with the benefit and no HP. Traditionally wouldn’t use an easement for this, not recognized for restrictions on the use of land, changed statutorily, conservation easements, couldn’t use for this. Safer using a covenant. Easements are forever and covenants have built in time limits, and there are easy ways to destroy covenants, difficult to destroy easements. Distinctions are breaking down.

  2. Same as #1 except A leases to C. C v. B. Who wins and why? C can’t sue B because no vertical privity because they are separate estates.

  3. In the following conveyances, the grantee always promises to use the land residentially. The Gr makes no Ps.

A D C B

A to B/A to C/A to D, so that B, C, & D are now neighbors each having Ped A that she would not use the land commercially. Who can enforce these P’s against whom?



  1. B v. A after first conveyance. B can’t sue A, because A didn’t make any promises.

  2. C v. B. C can enforce against B because C is getting A’s land that the promise was made to and if it runs with the land then C can enforce. C can sue but B cannot at that point in the series of transactions. Don’t need to get the entire parcel, just need the same estate. A C B, A and C can sue B, A and B can sue C, no one can sue A. Doesn’t matter how small the lots get.

  3. B v. C. No because when B got his land there was no promise by C to use it residentially, nor by A.

  4. D v. B or C. D can sue both B and C. Who can sue D? Not A all of her land has been conveyed completely to other people. If the benefit of the promises run with the land, people who get the land from A will have the benefit. A is often a developer, enables them to sue anyone they want at any time even after they have given up their last parcel of land. (Neponsit).

Just because a promise may be a covenant that was intended to run with the land does not mean it is not enforceable as a contract. Wheeler v. Schad/Morse v. Aldridge. If one of the DIMD in Wheeler who got the burden, just because they have conveyed land does not mean they are no longer liable for the promise if they made it. DIMD made the promise to pay for the dam, no reason P can’t sue DIMD for the amount of repair for the dam. They would have to show that the intent of the contract was to bind people to the deal after they had left the land.

If A is the developer, there is generally no problem enforcing the benefit, problem with the burden because people don’t want to pay. Hard to collect from DIMD because they are bankrupt.



  1. B or C v. D

Neponsit Property Owner’s Association v. Emigrant Industrial Savings Bank

Promise trying to enforce: maintenance fees. Similar to VR, substitution of land taxing, but no bargaining power problem here.

Diagram:

1917 – Neponsit Realty Deyer

Neponsit Realty ---> Neponsit Property Owners Association (this was considered to have privity)

Deyer X Y Bank

Emigrant Savings Bank purchases the property at a judicial sale. Purports to convey the land subject to the covenant.

NPOA v. Emigrant Savings: trying to enforce the promise to pay the fee.

Burden: bank

Benefit: NPOA

Based on 1917 conveyance, enforcing this promise. Which if either has to run?

Both benefit and burden have to run because neither were the original parties to the covenant.



Privity: For the burden to run need vertical privity between D and Bank and horizontal between NRC and Dyer. Have horizontal privity and vertical privity.

For the benefit to run, between NRC and NPOA and has to be vertical privity of the same type of estate. The tricky part is if the benefit runs, if there is privity between NRC and NPOA. Does the corporation have a classical interest in the land that is benefited by Dyer’s promise. Classic common grantor NRC. Does NPOA have a classical interest in benefiting land? The whole purpose of the corporation is to maintain the benefited land, so in that sense they have an interest. This is not an ownership interest. NRC owned the benefited land.

If there were vacant lots, NPOA might still have an ownership interest in that lot. No vertical privity problems, same type of estate even if its not the whole thing. Might go against the associations bylaws for them to own property. NPOA may be a non-profit organization, NRC was not, interested in keeping the land and selling it. The homeowner’s interest in the development of the residential development is potentially in conflict with the interest of the developer. The control of the NPOA becomes an important issue. Here where the development is over, there are a couple of problems, NRC would have sold the vacant lot, NRC has probably been dissolved, but would still be interested in the outcome in this lawsuit.

NPOA does not own benefited land, don’t have vertical (?) privity. The court overlooks the form and goes to the substance, may not be formal privity, but they have an interest.

Suppose Dyer bought the last lot NRC had and was analogous to D in the worksheet. Dyer’s lot is benefited by all the other promises in the subdivision, but is Dyer’s lot still burdened? If Dyer never made any promise, the deed would read the same as other deeds. But not promising to anybody who still owns land but was promising to NRC, at the instant that promise was made, NRC didn’t own land, conveyed the last piece to D. Can a promise run when there is no benefited land? The situation in the worksheet is an anomalous situation, normally when common grantor conveyes to grantee 1, they make mutual promises contained in the deed. Land burdened and benefited by the whole set of promises. The worksheet shows the problem that arises when this is not done. Here NRC and grantor would have made reciprocal promises. Otherwise no one is going to buy it.

The court would say none of this was formally benefited but we have the NPOA and they working for the land.

If NPOA owns the common land, we have no problem. But they probably gave the land to the city of Queens.

What if NPOA was not able to sue here. All the lots were benefited, don’t have the worksheet problem. So the court says we are going to uphold form. Any reason we shouldn’t be concerned about that? Why did NPOA sue here instead of individual homeowners? None of these people were ever mere neighbors because they were all in grantee-grantor relationships when they made the promise.



  • One problem is resources

  • If Deyer wins other owners don’t have to pay their dues.

  • Its in each person’s self interest to bind everyone.

  • What about the promise itself? The promise was made to NPOA, so maybe only they can sue. But if look a the language of the deed. All the people that bought the lots vested their right to sue to NRC through NPOA. NPOA only has the cause of action because each homeowner has conveyed the right. Fairer, more likely to happen. The deed seems to convey an exclusive right and power. If NPOA doesn’t do it, why wouldn’t you want the homeowner to be able to sue? They want to control how many times it goes to court, when one neighbor sues another neighbor for not maintaining the property as required in the covenants, can control by not intervening.

  • Encourages alternative forms of dispute resolution.

  • Matter of power. The NPOA and the deeds and bylaws are all constructed by the developer, each lot owner gets one vote. Subdivision divided into lots, until 1700 lots are sold the developer has no control of NPOA, when 1000 lots sold, NRC still has 500 votes. They gather in the power sue for the same reason they choose not to sue, enforce, not enforce, amend etc. Amendment process, architectural committee, all processes vested in homeowner’s association by laws written by the developer and put in every deed.

  • 2 reasons want to do that. Looks like setting up a democratic system of government. Once the lots are all sold then it is one lot one vote. Before that the developer is in control. He doesn’t want the homeowner to be able to enforce the rules if he is not able to sell all the lots. The developer wants to be able to say to NPOA that we are going to have a meeting to amend the rules. Doesn’t want to have language that gives an individual right to enforce the rules.

Question of vertical privity was whether to go beyond the form of NPOA to the homeowners who do own the land and find vertical privity with NRC. If didn’t do this would have been faced with the problem of no one being able to sue because of the exclusive right of NPOA.

Grantor/grantee applies for horizontal privity, plenty in the U.S.

Touch and Concern: historically an affirmative act could not touch and concern the land. The court found here that it did touch and concern the land because it impacts the rights of the landowners to use the land. Some courts have gone farther to look at how the money paid is used. Some also look at the control of the developer, could be for short periods, or for 10 years. When the developer takes that money, how does it spend it? More property to start new developments. In those circumstances the homeowners have been relieved of the duty to pay the fees because t does not touch and concern the land. The money has to be used the benefit the land and not for collateral purposes.

Nicholson v. 300 Broadway Realty Corp.

Issue: bad faith

Diagram:

1929 – agreement between Embossing co Nicholson agreed to furnish steam heat

1956 – Embossing Spitzer goes to Heirs (P)

Spitzer Thomson

Thomson 300 Broadway Co. (D)

Occurred contemporaneously. All of the obligations to mentioned except in conveyance to Broadway. Spitzer and Thomson were acting as agents for Embossing. Taking these actions to avoid having to comply with the covenant. Affirmative covenant that doesn’t run with the land.

Touch and Concern: affirmative act doesn’t normally touch and concern the land. It did here because of the legal relations test, there was a burden on Embossing to convey steam heat to Nicholson. What if it was an agreement for Embossing to handle all of Nicholson’s legal affairs? Here the burden would run as long as the buildings were in existence. If for tea or legal services, the benefit wouldn’t touch or concern Nicholson’s land. Here the benefit touches and concerns N’s property and the burden touches E’s property. Affirmative obligation tied to the very building embossing has on his property. Could raise argument that it touches and concerns the building but not the land.

Intent: probably intended for it to run. N making a decision not to invest in heating facilities for himself so he would want it to run to whoever took over the building.

Privity: need both vertical and horizontal for the burden to run. Vertical: have it here although fast and loose, fsa’s being conveyed. Horizontal: the secret about this case is that the court doesn’t address horiz privity. But N and E are neighbors at the time of the contract.

Maybe simultaneous or shared interest, E builds and maintains pipes. The shared interest has to exist at the time the agreement is made. Maybe the two buildings were already linked and one party owned both. If that is not the case then after 1929 E started running steam.

Also may shared easement of the railroad tracks, same problem with the pipes, not there at the time of the agreement.

Horizontal privity raises problems not addressed by the court. Pipes problem in creating shared simultaneous interest by the promise. The agreement dated Oct. 1929 may have been done after consent given, but the court didn’t address it.

Should always come to these question asking what kind of privity is necessary and where was the horizontal privity. We can hypothesize about shared interest, but here the obvious desire by Spitzer to avoid the covenant. The most important thing is getting the finder of fact to believe your version of events.

Assignment for after Spring Break: review this material, Tulk, Bear Creek, deeds for Columbia, 1001 – 1018



3/29

Restrictions on land, privately imposed

Easements have certain restrictions on them that led to the creation of other kinds of limitations on the use of land, obligations on land ownership, covenants.

Covenants were not limited in the types you can have but there are formal restrictions on how you can create them.



Equitable servitudes arose, Tulk v. Moxhay. Bear Creek shows the continued importance of formalities. Land law in California remains formalistic in its approach. Good review to figure out what is going on in terms of land use restrictions.

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