Enforcing a Covenant in Equity - dummies

Enforcing a Covenant in Equity

By Alan R. Romero

A person may enforce a covenant at law or in equity. The only significant difference today is that if someone enforces a covenant in equity, she probably can’t get an award of damages for breach of the covenant; she can only get an order of specific performance requiring the burdened party to comply with the covenant.

If she satisfies the requirements for enforcing at law, on the other hand, she can get damages, specific performance, or both.

The requirements for enforcing in equity differ somewhat from the requirements for enforcing at law. Historically, chancery courts developed their own rules for when they would enforce a covenant, and those rules were different from the rules followed in the law courts. In fact, covenants enforced in equity got their own name, equitable servitudes, which is still used today.

Equitable servitudes aren’t different interests from real covenants (covenants that run at law). The same covenant may be enforced at law as a real covenant or in equity as an equitable servitude. The benefited party doesn’t have to choose to treat the covenant as one or the other; she may plead and try to prove both theories.

The only difference is that she can’t get damages if she can’t prove the requirements for a covenant to run at law.

In order to enforce a covenant in equity, the benefited party must prove the following:

  • The parties intended the benefit to run to successors. As with enforcement at law, the benefited party may prove this by direct statements or by the nature of the covenant and the transaction. Courts don’t seem to require that the parties intended the burden to run.

  • The covenant touches and concerns the relevant land. In general, this requirement is the same as for enforcement at law.

  • The burdened party had notice of the covenant when she acquired the burdened property.