Restrictive covenant

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A restrictive covenant is a provision in a real property conveyance that limits the grantee’s use of the property. The beneficiaries of a restrictive covenant obtain rights from such covenants, and this may be the parties who agreed to the restrictive covenant or adjunct property owners who benefit from the restrictive covenant. For example, in Ezer v. Fuchsloch, a California Court of Appeals affirmed a lower court order requiring property owners to cut down certain trees on their property to the level of their single-story house pursuant to a restrictive covenant which provided that “no tree, shrub, or other landscaping should be planted that would at present or in the future obstruct the view [of the Pacific Ocean] from any other lot.” 

However, courts will not blindly uphold all restrictive covenants and may not enforce them if it would infringe on civil liberties or if the party seeking enforcement lacks standing. For example, in the famous 1948 U.S. Supreme Court Case, Shelby v. Kramer, the Court struck down the enforcement of a restrictive covenant which provided that “only Caucasians may hold title” because it violated the Equal Protection Clause. As another example, in Birt v. Ratka, the New York Supreme Court, Appellate Division extinguished a restrictive covenant prohibiting defendants from subdividing property that had right-of-way over landowner's property, holding that “[pursuant to N.Y. Real Property Code] [a] restrictive covenant shall not be enforced if, at the time enforceability of the restriction is brought into question, it appears that the restriction is of no actual and substantial benefit to the persons seeking its enforcement.” 

See also covenant not to compete

[Last updated in April of 2021 by the Wex Definitions Team]