Facts: A prior owner of property conveyed a portion of that property by grant deed, which described the portion they retained and provided as a condition of sale that no buildings were to be constructed on that portion. Separate parties later came to own the restricted and unrestricted properties.
Claim: The owner of the restricted property sought to confirm they held title free of the building restriction, claiming the building restriction was not a covenant running with the land, binding on future owners, as it burdened the restricted property described in the deed.
Counterclaim: The owner of the unrestricted property sought to confirm the building restriction persisted, claiming it was a covenant which ran with the restricted property, binding on future owners, since it was established for the direct benefit of the unrestricted property conveyed.
Holding: A California Court of Appeals held the building restriction was a covenant which ran with the restricted property, binding on future owners, since the covenant was made for the direct benefit of the unrestricted property and not with the purpose of burdening the restricted property described in the deed. [Self v. Sharafi (2013) ___CA4th___]
Editor’s note – A covenant runs with the land and binds future owners when it directly benefits the property conveyed with the grant deed. In this instance, the grant deed covenant restricted building on the portion of the property which was not conveyed. Thus, the court determined the covenant benefits the conveyed, unrestricted property since construction prohibition on the neighboring, restricted property “naturally enhances the market value” of the unrestricted property.
For more on covenants and their duration, see the first tuesday Realtipedia, Volume 3 Legal Aspects, Chapter 21 “Easements: running or personal?” and Chapter 23 “Covenants, conditions and restrictions.”
