A covenant that runs with a land is a covenant that transfers when ownership of the attached land transfer. The future owner of the property subject to a covenant that runs with the land is bound by that covenant.
A property covenant is an agreement between two or more parties regarding certain use of a piece of real property. The covenant will either benefit or burden the landowner. A covenant that burdens the landowner is also called a restrictive covenant.
There are two types of restrictive covenants: affirmative and negative.
- An affirmative covenant obligates a person to act.
- For example, a covenant that requires the homeowner to keep the trees trimmed in the yard is an affirmative covenant.
- A negative covenant prohibits a person to act.
- For example, a negative covenant can forbid a homeowner from building a fence.
In a covenant that runs with the land, the subsequent landowner of property subject to the covenant will continue being burdened or benefited by the covenant. This is in contrast to a personal covenant, or a covenant that only binds the original parties of the covenant and will not pass to the subsequent parties.
To decide whether a covenant will run with the land, different jurisdictions look for different elements. The four standard elements to establish a covenant that runs with the land include:
- Intent to run with the land at time of covenant formation
- Whether the subsequent landowner has notice
- Whether the covenant has touches and concerns the land
- If horizontal/mutual and vertical privity exists between the parties
The same jurisdiction can also look for different elements when the covenant burdens rather than when it benefits the landowner.
- For example, in California, the court looks for all four elements if the covenant at issue burdens the landowner - while the court will only look for intent, touches and concerns, and privity if the covenant at issue benefits the landowner.
- In Tennessee, however, the court only looks for intent, touches and concerns, and privity regardless of whether the burden or benefit runs with the land.
[Last updated in July of 2022 by the Wex Definitions Team]