CaseCast™ – "What you need to know"
Brief Fact Summary. Plaintiff, Neponsit Property Owners Association (Plaintiff), brought an action to foreclose a lien arising from a covenant contained in deed of conveyance to a predecessor in title of the Defendant, Emigrant Industrial Savings Bank (Defendant). The covenant essentially provided that a $4 fee would be collected annually upon lots of a certain size. The charge collected was to be devoted to maintenance of roads, paths, parks and other public purposes.
Synopsis of Rule of Law. A covenant must touch or concern the land. Privity exists in substance if not in form for an association that is comprised of property owners to advance their common interests.
It is plain that any distinction or definition which would exclude such a covenant from the classification of covenants which touch or concern the land would be based on form and not on substance.View Full Point of Law
Issue. Does this covenant meet the essential requirement that a real covenant must be one “touching” or “concerning” the land with which it runs?
Does the Plaintiff, who has been assigned the covenants, but not any property have the right to enforce the covenants with no privity?
Held. The Defendant and other property owners enjoy the benefits of maintenance of public places (including land not conveyed by the title) by the payment of the charge. The court found any distinction between this benefit and touching or concerning the land would be one of form not substance.
The Plaintiff is acting as agent or representative of property owners and advancing their interests. Therefore the members are property owners who do have the right to enforce the covenant even though there is no privity.
Discussion. Equity may choose substance over form where the requirements for enforcement of a real covenant are not technically met.