What is LawBrain?
It's a living legal community making laws accessible and interactive. Click Here to get Started »

Covenant

From lawbrain.com

An agreement, contract, or written promise between two individuals that frequently constitutes a pledge to do or refrain from doing something.

The individual making the promise or agreement is known as the covenantor, and the individual to whom such promise is made is called the covenantee.

Covenants are really a type of contractual arrangement that, if validly reached, is enforceable by a court. They can be phrased so as to prohibit certain actions and in such cases are sometimes called negative covenants.

There are two major categories of covenants in the law governing real property transactions: covenants running with the land and covenants for title.

Contents

Covenants Running with the Land

A covenant is said to run with the land in the event that the covenant is annexed to the estate and cannot be separated from the land or the land transferred without it. Such a covenant exists if the original owner as well as each successive owner of the property is either subject to its burden or entitled to its benefit. A covenant running with the land is said to touch and concern the property. For example, an individual might own property subject to the restriction that it is only to be used for church purposes. When selling the land, the person can only do so upon an agreement by the buyer that he or she, too, will only use the land for church purposes. The land is thereby burdened or encumbered by a restrictive covenant, since the covenant specifically limits the use to which the land can be put. In addition, the covenant runs with the land because it remains attached to it despite subsequent changes in its ownership. This type of covenant is also called a covenant appurtenant.

Certain easements also run with the land. An easement, for example, that permits one landowner to walk across a particular portion of the property of an adjoining landowner in order to gain access to the street would run with the land. Subsequent owners of both plots would take the land subject to such easement.

A covenant in gross is unlike a covenant running with the land in that it is personal, binding only the particular owner and not the land itself. A subsequent owner is not required to keep the promise as one would with a covenant appurtenant.

Covenants for Title

When an individual obtains title to, or possession and ownership of, real property, six covenants are ordinarily afforded to him or her. They are (1) covenant for seisin; (2) covenant of the right to convey; (3) covenant against encumbrances; (4) covenant for quiet enjoyment; (5) covenant of general warranty; and (6) covenant for further assurances.

A deed to real property that provides for usual covenants generally includes the first five of these covenants. When a deed provides for full covenants, it is regarded as giving such protection as is extended pursuant to all six covenants.

Covenants for seisin and of the right to convey are ordinarily regarded as being the same thing. Essentially, they make a guarantee to the grantee that the grantor is actually the owner of the estate that he or she is transferring.

The covenant against encumbrances promises to the grantee that the property being conveyed is not subject to any outstanding rights or interests by other parties, such as mortgages, liens, easements, profits, or restrictions on its

use that would diminish its value. The existence of zoning restrictions do not constitute breach of this covenant; however, the existence of a violation of some type of zoning or building restriction might be regarded as a breach thereof.

The covenants of quiet enjoyment and general warranty both have the legal effect of protecting the grantee against all unlawful claims of others, including the grantor and third parties, who might attempt to effect an actual or constructive eviction of the grantee.

The sixth covenant, which is the covenant for further assurances, is not widely used in the United States. It is an agreement by the grantor to perform any further necessary acts within his or her ability to perfect the grantee's title.

The first three covenants of title ordinarily do not run with the land, since they become personal choses in action—rights to initiate a lawsuit—if breached upon delivery of the deed. The others are covenants appurtenant or run with the land and are enforceable by all grantees of the land.

In order to recover on the basis of a breach of a covenant of title, financial loss must actually be sustained by the covenantee, since such covenants are contracts of indemnity. In most jurisdictions, the maximum amount of damages recoverable for such a breach is the purchase price of the land plus interest.

Purposes

Land use planning is often effected through the use of covenants. Covenants facilitate the creation of particular types of neighborhoods as part of a neighborhood plan. A housing developer might, for example, buy up vacant land to divide into building lots. A low price is paid for the undeveloped land, which the developer subsequently sells burdened with a number of restrictive covenants. The developer might stipulate in the contract of sale that the owner must retain the original size of a lot. Developers can also make owners agree that houses to be constructed upon the lots must be larger than a certain size and include other specifications to ensure that such property will more than likely sell for premium prices because of the desirability of the neighborhood. Courts enforce such covenants provided they benefit and burden all the property owners in a neighborhood equally.

Covenants will not, however, be enforced if they are intended to accomplish an illegal purpose. The Supreme Court ruled in Shelley v. Kraemer, 334 U.S. 1, 68 S. Ct. 836, 92 L. Ed. 1161 (1948), that no court or state officials have the power under law to take any action toward the enforcement of a racial covenant. In this case, a group of neighbors were bringing suit to prohibit a property owner from selling his home to blacks, based on the argument that the owner had purchased the home subject to the restrictive covenant not to sell to blacks. The covenant was found to be unenforceable based on equal housing laws. To enforce it would constitute a civil rights violation.

Further Readings

Bell, Cedric D. 2000. The Law of Real Property. London: Old Bailey.

Brinig, Margaret F., and Steven Nock. 1999. "Covenant and Contract." Regent University Law Review 12 (spring): 9–26.

Kraut, Jayson, et al. 1983. American Jurisprudence. Rochester, N.Y.: Lawyers Cooperative.

See Also

Contributors

Admin