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bright line rules and rules of reason, analogous to the trespassnuisance divide. If the dominant owner acquires additional land and attempts to use an existing easement to reach the new land, this will always be condemned as a misuse of the easement, even if the increased burden is trivial.18 On the other hand, if the dominant owner’s business grows, with the result that the volume of traffic using an existing easement increases significantly, this will be permitted as long as the increased traffic does not impose an unreasonable burden on the servient owner. Some commentators have expressed frustration with the formality of the distinction.19 Perhaps the difference in treatment simply turns on the specificity of the underlying rights. Easements are usually clear about the identity of the dominant parcel; thus, in the case of newly added land, there is an unambiguous violation of a clear limitation on the right. Easements are much less likely to be clear about the permitted intensity of use. There is, if you will, a gap in the specification of rights in this case, which must be filled in by the court for the parties, making a standard of reasonableness appropriate. The parties are always free to specify in the easement what volume of use is permitted, and a violation of such a limitation would similarly be subject to automatic condemnation by a court.

• Contract: Covenants Running with the Land

Closely related to easements are covenants running with the land. Sometimes covenants and easements are lumped together as “servitudes.” We have described easements as modifications of property rights. Covenants could be described the same way. But covenants

18.See Penn Bowling Recreation Ctr., Inc. v. Hot Shoppes, Inc., 179 F.2d 64 (D.C. Cir. 1949).

19.Lee J. Strang, Damages as the Appropriate Remedy for “Abuse” of an Easement: Moving Toward Consistency, Efficiency, and Fairness in Property Law, 15 Geo. Mason L. Rev. 933 (2008).

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have a stronger contractual flavor than easements. Covenants always originate in written promises between a grantor and grantee of interests in land. There are no doctrines that provide for covenants as a matter of law, as there are with respect to easements. Covenants typically apply to questions about permissible uses of property, whereas easements more typically involve questions of access. And covenants are much more likely to impose negative rather than affirmative obligations, whereas the obligations of an easement are nearly always affirmative. Indeed, one could say that covenants are simply contracts about the permissible uses of land with one feature not otherwise found in contracts: Covenants “run with the land,” meaning that the benefits and burdens of the promises roll over automatically when the interests of the original promisor and promisee are transferred.

Suppose a developer subdivides a tract of land. The developer requires that every purchaser of a lot in the subdivision take a deed that includes a promise that the purchaser will use the property as a single-family residence only. There is no doubt that such a deed restriction is enforceable as a contract between the developer and the purchaser. Thus, if a purchaser who has signed such a deed attempts sometime later to turn the single-family house on the lot into a duplex, the developer can sue the purchaser for breach of contract. Unless the purchaser can establish one of the standard defenses to such an action (e.g., lack of contractual capacity), the developer should win, and the court would either award damages or enter an injunction to prevent the breach.

Whether or not such a contractual promise is a covenant running with the land comes into play only if the original promisee (the developer) or the original promisor (the purchaser) has transferred the property to someone else. The law has developed two tests for determining whether such promises run with the land: equitable servitudes and real covenants. It is important to stress that equitable servitudes and real covenants do not refer to two different interests in property, like a fee simple and a life estate. They are the same thing. These are simply two different legal tests for

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in London. Tulk sold the square to one Elms, by a deed in which Elms promised for himself, his heirs, and assigns, to keep the square in good condition and to allow the residents in the houses surrounding the square to use it as a “garden and pleasure ground.” Ownership of the square passed by several conveyances into the hands of Moxhay, whose deed said nothing about this promise, although Moxhay admitted he was aware of Elms’s original promise because he had seen it in the deed from Tulk to Elms. When Moxhay threatened to build on the square, Tulk sued for an injunction, and won.

The court in Tulk acknowledged that such a promise would not run to a successor in interest in an action at law. In England, covenants run with the land only when they are contained in leases between a landlord and tenant. But the court said this did not preclude a court of equity from issuing an injunction when the successor took with actual notice of the promise. According to the court, because the original promise by Elms no doubt affected the price he paid, “nothing could be more inequitable than that the original purchaser should be able to sell the property the next day for a greater price, in consideration of the assignee being allowed to escape from the liability which he had himself undertaken.”21 (Is this true? What if Elms assumed the promise was good only until he sold the property to someone else?) The key was that Moxhay had acquired the property with actual notice of the promise: “[I]f an equity is attached to the property by the owner, no one purchasing it with notice of that equity can stand in a different situation from the party from whom he purchased.”22

Based on Tulk and following decisions, the equitable servitude test has come to be understood to have three elements. (1) The parties must intend that the promise will be binding on their successors. This was satisfied in Tulk because Elms had promised on

21.41 Eng. Rep. at 1144.

22.Id.

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behalf of himself and his “heirs and assigns.” (2) The successor must have notice of the promise to be bound by the burden of the promise. In Tulk the successor (Moxhay) had actual notice; later decisions established that constructive notice through the recordation of the original deed will also suffice. (3) The promise must be one that “touches and concerns the land.” More on this mysterious phrase in a moment.

Meanwhile, American courts ventured forth beyond what English courts had allowed in enforcing promises against successors in interest in actions at law. English courts allowed covenants respecting the use of land to run to successors only if the original covenant was between a landlord and tenant. If the landlord sold the reversion, or if the tenant assigned the lease, the covenants in the original lease would bind their successors if certain conditions were met (see Chapter 6). American courts took this doctrine and extended it to the context of real estate developments. If the original promise was contained in a deed between a real estate developer and a purchaser of property in that development, the original promise would also run, provided the same conditions developed in the landlord-tenant context were met. The courts described the general condition between the original promisor and promisee that would permit this doctrine to apply as “privity of estate.”

In its full-blown form, the real covenant test has come to be understood to have the following elements. (1) The parties must intend that the promise will be binding on successors. Usually this will be established by language indicating that the parties are promising on behalf of their “heirs, successors, and assigns” or words to that effect. Intention can also be established, however, by a more general consideration of context. (2) The original promise must have been made between grantor and grantee, landlord and tenant, or others who are in “privity of estate.” This type of privity is often called “horizontal,” and it is rarely of much importance in American cases, as nearly all the cases involve promises imposed by real estate developers on original grantees in a new development (grantorgrantee relationship). (3) For the burden of a promise to run, the

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successor must have acquired the entire interest of the original promisor, in what is known as “full vertical privity.” For the benefit of a promise to run, the successor must have acquired at least part of the interest of the original promise, in what is known as “partial vertical privity.” (4) The promise must be one that “touches and concerns the land.”

As this brief summary suggests, the main differences between the equitable servitude test and the real covenant test are as follows. The equitable servitude test requires that a successor in interest must have notice of the promise, real or constructive; the real covenant test does not. The real covenant test requires privity of estate between the original promisor and promisee and full or partial privity of estate between the successors and the original parties to the promises; the equitable servitude test does not. Both tests require that the original parties intend the promise to bind successors, and that the promise touch and concern the land.

What does the mysterious phrase “touch and concern” mean? The purpose of this requirement is relatively clear. It is designed to differentiate between promises that it makes sense to impose on successors in interest and promises that it makes sense to limit to the original promisor and promisee only. Suppose the original parties include in the deed a promise that the purchaser, a barber, will cut the hair of the seller, a real estate developer, once a month. If the barber subsequently transfers the property to a law professor, obviously it makes no sense to hold that the promise runs with the land. The developer (or the developer’s successor in interest) would not want a haircut by a law professor. Conversely, if the original parties include in the deed a promise that the property will be used for a single-family residence only, this will certainly have an impact on future successors, both of the promisor and the promisee. This kind of promise is clearly one that it makes sense to impose on successors in interest.

Why not simply rely on the parties to the original promise to signal whether they intend the promise to run? The problem seems to be that parties generally fail to attend to this issue on a carefully

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considered, promise-by-promise basis. The tendency, all too often, is to make lots of promises, and say they all are intended to run. Courts have generally been skeptical that this should be taken literally. The Restatement of the Law Third, Property would reverse this skeptical attitude, and substitute what amounts to a presumption that promises will run, unless they violate public policy.23 But so far, courts have been reluctant to abandon the touch-and-concern screen for when promises run.

Although unwilling to give up on touch and concern, courts have been stymied about how to specify exactly what this means. Perhaps some progress could be made by reverting to the general reason for having a legal mechanism like servitudes that run with the land: the need for a governance regime to regulate positive and negative neighborhood effects or externalities. Promises that regulate externalities, either by encouraging positive externalities (taking care of the lawn) or discouraging negative externalities (no boarding houses), would be deemed to touch and concern the land. Promises that have no discernible neighborhood effects (cutting the developer’s hair, agreeing to finance a loan from a company affiliated with the developer), would be deemed not to touch and concern the land. To be sure, whether or not something is an externality is often debatable. So asking courts to decide whether a promise regulates externalities would not resolve all the borderline cases, such as whether a promise to buy water from a common well runs with the land.24 But it might at least point courts in the right direction.

Because servitudes running with the land often involve fairly specific promises about land uses, these promises run a significant risk of becoming obsolete. A classic example is a promise to limit all

23.Restatement of the Law Third, Property: Servitudes §§ 2.1, 3.1 (2000).

24.See Eagle Enterprises v. Gross, 349 N.E.2d 816 (N.Y. 1976) (holding that promise to purchase water from a common well did not touch and concern the land).

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lots in a subdivision to single-family homes: Years later, the area changes such that the highest and best use of all or part of the land is for commercial use such as retail. In the face of such changed circumstances, it may be very difficult or impossible to amend the promises, because all persons owning property in the development would have to agree to the change. Unanimous consent will be very hard to achieve, given that one or more owners may hold out. Perhaps the holdouts could be induced to relent by side payments from the owners who desire change, in a “Coasean bargain.” But freerider problems may prevent the owners who desire change from raising enough funds to induce the holdouts to relent, and after all, the main point of the Coase theorem is that in the real world, transaction costs will sometimes block wealth-increasing deals.

A well-designed package of servitudes will anticipate this problem. It may include specific time limits on different promises, or the entire package may expire after a certain period of time, such as forty years. More recently, well-advised developers have incorporated into packages of servitudes some mechanism for amending the original promises by something less than unanimous consent. Modern condominium developments, for example, make extensive use of servitudes that restrict the use of individual units and the common facilities in a variety of ways (see Chapter 6). But they also typically include some mechanism, such as a supermajority vote of the homeowners’ association, which allows abrogation or amendment of the original promises. Because a supermajority is hard to muster, this allows purchasers to rely on the original package of promises. It also allows for change when a strong consensus develops that change is appropriate.

Absent such an amendment procedure, the primary safety valve for overcoming problems created by changed circumstances is judicial abrogation under what is called (appropriately enough) the changed circumstances doctrine. Courts generally apply a very demanding standard in determining whether to refuse enforcement of covenants running with the land because of changed circumstances. They require evidence that the restriction will be of