Bar Exam — MBE (Multistate Bar Exam)Real PropertyMedium
A developer purchased a large tract of land, intending to subdivide it into residential lots. Before selling any lots, the developer recorded a declaration of restrictive covenants that prohibited the construction of any structure over two stories high. The developer then sold Lot 1 to a buyer. A year later, the developer sold Lot 2 to a second buyer. The second buyer then began construction of a three-story house. The owner of Lot 1 sought an injunction to stop the construction. What is the likely outcome?
- AThe owner of Lot 1 will prevail because the developer created an implied reciprocal negative servitude.
- BThe owner of Lot 1 will lose because the developer did not include the covenant in the deed to Lot 2.
- CThe owner of Lot 1 will lose because the restrictive covenant is an unreasonable restraint on alienation.
- DThe owner of Lot 1 will prevail because the restrictive covenant runs with the land and is enforceable as an equitable servitude.
Show answer & explanationAnswer & explanation
Correct answer: D. The owner of Lot 1 will prevail because the restrictive covenant runs with the land and is enforceable as an equitable servitude.
A recorded declaration of restrictive covenants creates an equitable servitude that runs with the land, providing notice to subsequent purchasers and allowing enforcement by other lot owners in the subdivision.
Why the other options are wrong
- A. Implied reciprocal negative servitudes apply when there's a common scheme but no express written covenant in the chain of title for a particular lot. Here, there was an express recorded declaration.
- B. Recording the declaration provides constructive notice, making the covenant enforceable even if not explicitly in each deed.
- C. A two-story height restriction is generally considered reasonable and not an unreasonable restraint on alienation.
Equitable Servitude
A covenant concerning the use of land that is enforceable in equity against subsequent purchasers with notice, even if the covenant does not run with the land at law.
- Enforceable in equity (injunction, specific performance).
- Requires intent, notice, and 'touches and concerns' the land.
- Does not require horizontal or vertical privity.
- Can be created by a common scheme of development (e.g., recorded declaration).
Memory trick: Covenants Keep Communities Cohesive, Servitudes Serve with Equity.