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Covenants running at law with Fee Simple Estates

. . . . . 12 3. 4 5 6. 7 89. The owner of Lot 5 wishes to build a convenience store.. . Assume the following:. 1. There's no zoning prohibition on use of Lot 5. 2. Lot 5 will be worth $100,000 more if used for a convenience store. 3. Each of the other lots will be worth $20,000 less if there's a convenience store on Lot 5..

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Covenants running at law with Fee Simple Estates

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    3. Assume the following: 1. Theres no zoning prohibition on use of Lot 5. 2. Lot 5 will be worth $100,000 more if used for a convenience store. 3. Each of the other lots will be worth $20,000 less if theres a convenience store on Lot 5.

    5. Assume that the 8 neighbors succeed in paying Owner 5 for a promise not to build a store. Ronald Coase (1960) argued that this result was economically efficient. What is the relevance of whether the benefits and burdens of the covenant run with the land?

    8. Who are the plaintiffs in this action? The Runyons (who bought the lake lot from Ms. Gaskins on 8 January 1960). Ms. Williams (Gaskins daughter, who bought Gaskins lake lot from Gaskins heir, Eleanor)

    12. Are covenants in gross (with only burdened land, but no benefitted land) useful? Historic preservation covenants Land conservation covenants London County Council v. Allen

    13. Some covenant questions:

    14. Touch and Concern?

    15. Note that some of these covenants also raise the benefit in gross issue we discussed earlier:

    17. What is horizontal privity? There are 4 views: Tenure (landlord-tenant) Simultaneous interests, such as easements, that the covenant affects Instantaneous privity (covenant is in, or executed simultaneously with, a deed) Horizontal privity not necessary (a small minority view)

    20. Vertical privity issues: Transfer of less than full fee simple Adverse possessor Third party beneficiary (e.g., the Runyon case) someone who purchased land from the covenantee before the covenant was created! (Suppose the covenant expressly stated that it was intended to benefit the Runyons.)

    21. When is privity important?

    22. Intent?

    23. Intent?

    24. How are modern subdivision covenants created?

    25. Modern subdivision covenants include:

    26. Homeowners Associations Two main roles: 1. Enforcement of covenants (acting for the individual owners) 2. Collections of assessments and maintenance of common areas).

    28. Whats the issue in Midsouth? Privity? Intent? Touch and concern?

    29. Why didnt the burden of paying the amenity fees to Midsouth touch and concern the timeshare owners units? Their use rights were licenses rather than easements? Memberships in the Midsouth club were being sold to the general public? The covenants were affirmative (to pay money) rather than negative (to restrict the use of the timeshare units)? Owners had to pay whether or not they played?

    30. Would it matter whether...

    31. In the typical PUD, who is the owner of the benefitted land?

    32. Are there some activities of owners associations that dont touch & concern?

    33. Assessments:

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