Legal Definitions - restrictive covenant in equity

A restrictive covenant in equity is a legally binding promise, typically found in a property deed, that limits how a specific piece of land can be used or developed. The key aspect of a restrictive covenant "in equity" is that it is enforceable not only between the original parties who made the promise but also against all future owners of the land, even if those future owners were not part of the original agreement. This type of covenant "runs with the land," meaning the restriction stays with the property regardless of who owns it, and it is enforced based on principles of fairness and justice rather than strict contract law.

Here are some examples to illustrate this concept:

• Residential Subdivision Building Restrictions: Imagine a property developer creating a new upscale residential neighborhood. To maintain the aesthetic and property values, the developer includes a restrictive covenant in the deed for each lot stating that no structure built on the land can exceed two stories in height and that all homes must use a specific type of roofing material. If a future homeowner purchases a lot in this subdivision, they are bound by these restrictions, even though they never directly agreed to them with the original developer. Other homeowners in the subdivision, whose properties benefit from these restrictions, could seek to enforce the covenant in court if a neighbor attempted to build a three-story house or use a prohibited roofing material.

• Preservation of Open Space: A large estate owner decides to sell off a portion of their land to a private buyer. To ensure that a scenic view from their remaining property is preserved, they include a restrictive covenant in the deed for the sold parcel, stating that a specific section of that land must remain undeveloped open space and cannot have any permanent structures built upon it. Years later, the original buyer sells the parcel to a new owner. The new owner is still bound by the promise to keep that section as open space, even though they were not involved in the initial sale. The original estate owner (or their successors) could enforce this covenant to prevent development on that specific area.

• Commercial Non-Competition Clause: A large department store sells a piece of adjacent land to a developer. To prevent direct competition, the department store includes a restrictive covenant in the deed that prohibits the construction and operation of any retail clothing store on that parcel for a period of 25 years. The developer later sells the land to another company. This new company, even though they were not party to the original agreement, is still legally bound by the covenant and cannot open a clothing store on that property for the specified duration. The original department store could enforce this restriction against the new owner.