Covenants and Privity
Privity between original parties
in context of a transfer of estate in land
(known as “horizontal privity”)
Promisee;
(e.g., B sells to A)
benefit to
Whiteacre
A
A
sells to
D
B
Promisor;
burden on
Blackacre
B
sells to
C
Privity between promisee
and assignee
(known as “vertical privity”)
Privity between promisor
and assignee
(known as “vertical privity”)
D
U N I V E R S I T Y of H O U S T O N
C
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Real Covenants
1. Must be in writing to satisfy the Statute
of Frauds.
2. Must be what the parties intended.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
1
Real Covenants
3. Must touch and concern (T&C) the land
with which it runs, that is—
• it must have a logical connection to
the use and enjoyment of land, or
• it must physically affect the use and
enjoyment of the land, or
• the promisor’s legal interest as an
owner must be rendered less
valuable by the promise and the
promisee’s legal interest as an
owner must be made more valuable
by the promise.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Real Covenants Cont’d
4. Must have horizontal privity of estate:
the relationship among—
(a) the original promisor (owner of
burdened land),
(b) the original promisee (owner of
benefited land), and
(c) the affected estate in land.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
2
Real Covenants Cont’d
5. Must have vertical privity of estate: the
relationship among—
(a) the original promisor or promisee
under a covenant,
(b) the promisor’s or promisee’s
successor in interest, and
(c) the affected estate in land.
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Equitable Servitudes
• To be enforceable against a successor
in interest—
• Intent
• Notice (unless successor gave no
consideration)
• T&C
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
3
Tulk v. Moxhay,
41 Eng. Rep. 1145 (1848), Casebook p. 746
Tulk
Grantor/
Promisee
NO horizontal privity of estate
between
Tulk and Elms in England
Elms
Grantee/
Promisor
Burden on
Leicester Square Garden
Benefit to
Tulk and his tenants
Elms sells to B and
B sells to C and
C sells to Moxhay with
NO covenant in the deed
Vertical Privity
Between
Tulk sues to stop Moxhay.
Elms and Moxhay
Moxhay
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Tulk v. Moxhay Cont’d
• Intent
• Notice
• T&C
• Other considerations
1910
• Fairness/Equity
• Benefit of the bargain
• Value of retained land
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
4
Leicester Square Garden Through the Years
Wyld’s Monster Globe
1910
Modern Times
Modern Times
U N I V E R S I T Y of H O U S T O N
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Professor Marcilynn A. Burke
Neponsit Property Owners’ Association, Inc. v.
Emigrant Industrial Savings Bank,
15 N.E.2d 793 (N.Y. 1938), Casebook p. 755.
Horizontal Privity
The Deyers
Neponsit Realty
Mesne
Conveyances
Vertical Privity
Neponsit
assigns right
to enforce
to HOA
Vertical Privity?!?!
Emigrant Bank
buys at judicial
sale
Emigrant Bank
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
HOA
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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Neponsit Cont’d
Does the Covenant Run with the Land?
• Writing
• Intent
• T&C
• Privity (horizontal and vertical)
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Neponsit Cont’d
Does the Covenant Run with the Land?
• T&C
• Negative Covenant
• Affirmative Covenant
• Old English Rule
• Modified English Rule
• Reluctance
• Neponsit Rule
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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Neponsit Cont’d
Does the Covenant Run with the Land?
• Privity
• Horizontal
• Vertical
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Caullett v. Stanley Stilwell & Sons, Inc.,
170 A.2d 52 (NY 1961), Casebook, p. 768.
• “The grantors reserve the right to build
or construct the original dwelling or
building on said premises.”
• “covenants running with the land . . .
[which] shall bind the purchasers, their
heirs, executors, administrators, or
assigns.”
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
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Caullett v. Stanley Stilwell & Sons Cont’d
Real Covenant?
• Writing
• Intent
• Touch & Concern
• Horizontal Privity
• Vertical Privity
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
Caullett v. Stanley Stilwell & Sons Cont’d
Court’s Reasoning
• Ambiguous
• Touch & Concern
• In gross
U N I V E R S I T Y of H O U S T O N
Professor Marcilynn A. Burke
Copyright©2007 Marcilynn A. Burke
All rights reserved. Provided for student use only.
8