Real Estate Terminology

A covenant that is so related to an estate in land that the benefit passes to a purchaser or assignee of the land and may be enforced at law. "In Underhill on Landlord and Tenant, p. 614, § 387, it is said: ‘Covenants are classified into real and personal covenants. Real covenants are those that are annexed to the estate and which are incidents of its ownership and enjoyment irrespective of the fact that the original parties to the covenant are no longer in possession thereof. Such covenants are usually to be performed on land and are therefore said to run with the land.’" Lincoln Fireproof Warehouse Co. v. Greusel, 191 Wis 428, 224 NW 98, 101, 70 ALR 1096, 1099 (1929). A real covenant is one that can be said to ‘touch and concern’ the land (a covenant ‘running with the land’), and, therefore, may be enforced by a successor to the promisee’s estate, or enforceable against a successor to the promisor’s estate, provided the successor has notice of the covenant and it is intended to bind the successor.

A real covenant may arise between a landlord and tenant (a ‘landlord and tenant covenant’); or between fee owners or neighbors (sometimes called a ‘vendor and purchaser covenant’ as it usually arises upon a sale of land). A positive covenant may be enforced at law and hence the remedy is one for damages; as distinguished from an ‘equitable restriction’ or equitable servitude that is only enforceable in equity and for which the remedy may be an injunction to prevent a breach of the covenant, or specific performance to require compliance with the covenant.

A real covenant is enforceable, as with any covenant, between parties to the agreement. It is enforceable between a landlord and tenant provided there is privity of estate between the parties. However, the extent to which a real covenant is enforceable by or against a new owner of the land varies between jurisdictions. Some jurisdictions follow the common law principles that depend to a large degree on whether it is the benefit or burden that is being enforced (viz. restrictive covenant). Other jurisdictions take a more liberal view that a covenant should be enforced so long as it ‘touches and concerns’ the land, i.e. it is not purely personal. Whereas other jurisdictions take the view that any covenant that impedes the free use of land should only be enforced when it is for the benefit of several landowners. All jurisdictions accept this latter principle when a real covenant is part of a scheme of development. A real covenant may be an ‘affirmative’ or positive covenant, or a ‘restrictive’ or negative covenant.

A real covenant may be distinguished from an easement, as a covenant is a promise respecting the use (or ‘non–use’) of land, whereas an easement is a grant or reservation of an interest in land that permits someone to go onto land and do something. A real covenant must be created expressly; it cannot arise by implication or prescription. Sometimes called a ‘running covenant’. cf. personal covenant. See also privity of estate, restrictive covenant.

R.A. Cunningham et al. The Law of Real Property (2d ed. 1993), §§ 8.14–8.21.
20 Am.Jur.2d., Covenants, Conditions, and Restrictions, § 29 et seq.
7 Thompson on Real Property (2d ed. 1994), Ch. 61 "Real Covenants", §§ 62.03–62.09.
5 Powell on Real Property, §§ 670–673.

Land and anything permanently fixed thereto, as well as any rights or interests in land. A right or claim that attaches to the very substance of land; as distinguished from personal estate which belongs to a person and, as such, is temporary and movable. Historically, ‘real estate’ meant property that was capable of being recovered by a real action (i.e. an action which sought to recover true possession of the property and not merely a bare claim supported by recompense). Thus, in a strict legal sense, real estate does not include a leasehold, which is regarded in the common law as personal estate (a ‘chattel real’) and is capable of recovery only by a personal action between the parties (1 Co Litt 46a; Butler v Butler (1884) 28 Ch D 66; Montreal Light, Heat & Power Consolidated v Westmount (Town) [1926] SCR 515, 520 (Can); City of New York v. Mabie, 13 NY (3 Kern) 151, 159, 64 Am Dec 538 (1855); Pacific Southwest Dev. Corp. v. Western Pac. R. Co., 47 Cal.2d 62, 301 P.2d 825, 829 (1956)). However, this common law anachronistic interpretation of ‘real estate’ has been superseded generally by the more modern view that a leasehold (especially a lease for a fixed term of more than one year) is real estate (Anno: 103 ALR 826: Interest Created by Lease as Real Estate). (In the US, in some jurisdictions, real estate may even include an oil and gas lease, at least until the oil or gas is extracted (United States v. Texas Eastern Transmission Corp., 254 F Supp 114 (DC La 1965), cf. Pacific Southwest Dev. Corp. v. Western Pac. R. Co., supra at 829). In a statute that authorizes condemnation of "real estate", the term may include a lease (40 USCA § 258a; United States v. Fisk Building, 99 F Supp 592, 594 (DC NY 1951)).

In a will, unless there is evidence to the contrary, "real estate" does not pass a chattel (which includes a leasehold interest) (Wills Act 1837, s. 1; City of New York v. Mabie, supra; Orchard v. Wright–Dalton–Bell–Anchor Store Co., 225 Mo 414, 125 SW 486, 493, 20 Ann Cas 1072 (1910)). However, it would normally include a rentcharge that is limited in the same way as a freehold.

In English law, in connection with the devolution of property on to a personal representative on a person’s death, "‘real estate’ includes—(i) Chattels real [a leasehold interest] and land in possession, remainder or reversion, and every interest in or over land to which a deceased person was entitled at the time of his death; and (ii) Real estate held on trust (including settled land) or by way of mortgage or security, but not money to arise under a trust for sale of land, nor money secured or charged on land." Administration of Estates Act 1925, s. 3(1). See also chattel, freehold, fixture, real property.

Terms in bold are defined elsewhere in the hard copy of the Encyclopedia.