Adjusting Rights by Private Agreement: Covenants

• Author: Alan R. Romero
• Profession: Professor of law and Director of the Rural Law Center at the University of Wyoming College of Law
• Pages: 55-78

Chapter 5

Adjusting Rights by Private

Agreement: Covenants

In This Chapter

▶ Understanding what covenants are and how they’re created

▶ Examining the requirements for covenants to run with the land at law and in equity

▶ Interpreting and applying covenants

▶ Amending and terminating covenants

P

roperty owners can customize their rights and reconcile them with

other owners by private agreement. One way to do that is by using

covenants. In general, a covenant is just a contractual promise from one

person to another person. If a covenant doesn’t relate to land, it’s just a

contract, which you can read about in Contract Law For Dummies by Scott J.

Burnham (Wiley). This chapter is about covenants that relate to land.

When a landowner covenants to do or not to do something on land, not only

does she have a contractual obligation to the person to whom she made the

promise, but she may also have an obligation to people who acquire that

person’s land in the future. And people who acquire her land in the future

may be obligated to keep performing her promise.

This chapter clarifies how parties may expressly or implicitly make covenants

that relate to land and when those covenants burden and benefit later

owners of land. It also explains how to interpret, amend, and terminate such

covenants.

Introducing Land-Related Covenants

A covenant may relate to the land by promising to do something on land or

by promising not to do something on land. Covenants thus may be described

as follows:

56 Part II: Understanding Real Property Rights

✓ Negative: A negative covenant, or restrictive covenant, is a covenant that

the property owner will not do or allow certain things on her land. For

example, a covenant not to use a property for commercial purposes is a

restrictive covenant. Most covenants are restrictive.

✓ Affirmative: An affirmative covenant is a promise to do something.

It may be a promise to do something on the benefited land, such as

providing heat to a building on the covenantee’s land. Or it may be a

promise to do something on the covenantor’s burdened land, such as

maintaining certain types of landscaping features on her land. An

affirmative covenant may even be a promise to pay money, like a

covenant to pay dues to a homeowners’ association.

When covenants relate to land, they create a legal interest in land and therefore

must comply with the statute of frauds. The statute of frauds, which Chapter 15

talks about in detail, requires written evidence of an interest in real property,

signed by the party that’s denying the creation of the interest.

Most covenants are created in instruments granting other interests, such as

deeds or leases, and so satisfy the statute of frauds. Even if a covenant isn’t

in writing, estoppel may allow it to be enforced. Chapter 15 talks about

estoppel more, but here’s the short version: If a party reasonably expends

significant value in reliance on a covenant, she may enforce the covenant

even if it isn’t written. For example, if the benefited party builds a house,

relying on a neighbor’s covenant not to build a tall building next door, the

neighbor may be estopped from denying the existence of the covenant.

If the covenant satisfies the statute of frauds, the original parties to the

covenant can enforce the agreement against each other just like they could

enforce any other contract. The covenant doesn’t have to meet any special

property law requirements for the original parties to enforce it.

But the covenant does have to meet special requirements in order to be

enforced by and against subsequent owners of the original parties’ lands. The

following sections talk about those requirements.

Enforcing a Running Covenant at Law

Covenants that are related to the land can run with the land. That means the

covenant attaches to the land so that subsequent owners of the benefited

land can enforce the covenant against subsequent owners of the burdened

land. Of course, subsequent owners could voluntarily accept an assignment

of contract rights and duties by their predecessors who originally made the

contract. But a covenant that runs with the land binds and benefits successors

regardless of whether they agree. In effect, the covenant just becomes part of

the land.