1. What is the specific activity prohibited - is it specifically defined
2. What is the activity complained of
3. How does it violate the covenant
4. What is the PURPOSE of the covenant
5. Does the activity violate the purpose and spirit of covenant?

Original Test - WINT&C and Privity (real C only) - 

• Still requires WIN
• Enforceable unless it is UNREASONABLE:
  • Violates a fundamental public policy (pets?)
  • Burden on land that outweighs benefit
  • Is covenant arbitrary or rationally related to the protection, preservation, operation or purpose of affected land?

Cannot unreasonably affect alienation -weigh the utility of limited alienation restraint against harmful consequences

Limitations on leasing ok

NJ Rule for Restrictive Covenants 

Note that all are factors (not elements)

Was there Writing, Intent, Notice?

Reasonableness

Changes since original covenant

Public Policy / Benefit (C Town)

Monopoly

Length of time

1. Laches - unreasonable/undue delay in enforcement
2. Acquiescence-previously tolerated by benefit estate
3. Abandonment - benefit owner INTENDED to give up
4. Unclean hands
5. Estoppel - benefitted party intended no enforce, burdened party reasonably relied, courts terminate
6. Relative hardship - burden FAR outweighs benefit
7. Changed conditions - drastic changes around the 'hood changes the benefit and/or burden of the covenant
   1. covenant outlives purpose (eg residential only)

1. pre contracting /offer and role of brokers (when is commissioned earned, seller vs buyer agent)
2. Contracting the purchase sale agreement (deposit)
3. Executory period - between sign sale agree and closing
4. Closing - full payment, deed delivered, recorded
   1. MERGER=deed replaces sale agreement
5. Post closing - some disclosure obligations remain

• Marketable title normally required in the sale agreement
  • If not able, buyer can escape the contract
• Marketable title is "free from REASONABLE doubt" - not free from every doubt

During this period, parties remove contigencies in the purchase and sale agreement

• Sellers ability to convey marketable title
• Liens, mortgages, etc. 
• Buyer ability to get financing
• Inspections

Requirements for statute of frauds

(requirement for purchase of sale agreement)

1. Essential terms of the promises to be performed
2. Be contained in writing
3. Be signed by the bound parties

1. Identify parties to the contract
2. Include words of intent
3. Describe the real estate
4. State the price (if agreed upon)

Estoppel by courts if one party induces the other to make a SUBSTANTIAL change in position in REASONABLE good faith to her DETRIMENT

The partial performance is required to be "unequivocally referable" - normally need payment + possession + improvement (with payment being easily remedied by court order to pay back)

At very least payment plus one imrpovement or possession

Can also be two documents - notepaper and check 

Fraudulent Misrepresentation (misfeasance)

• False statement re a material fact (not OPINION)
• Maker knows it is false
• Made with intent to induce reliance
• Injury / harm resulting from statement

Non disclosure (nonfeasance)

• Must disclose 1) known facts, 2) material to the sale, 3) not within reach of diligent attention of buyer

1. Writing
2. ID the parties
3. Describe property being conveyed (more detail than sale agreement)
4. State the grantors intent to convey the property conveyed
5. Be signed by the GRANTOR
6. Delivered to the Grantee (actual or constructive)
7. Accepted by grantee

Duty is on grantee to record - not a "requirement"

Recording Acts 

(How jurisdictions rule for who has proper deed/better title)

1. Race - whoever records first has better title
2. Notice - subsequent purchaser prevails if she does not have notice (actual, constructive, inquiry) at time of conveyance (even if first buyer records first but wild deed or mistake filing deed)
3. Race/Notice: the subsequent purchaser has better title if:
   1. She records first AND
   2. She purchases without notice of the prior conveyance

Void - if forged - and secondary bona fide purchaser is not protected

Voidable - if there was fraud or inducement - the defrauded seller can revoke the sale until another bona fide purchaser buys (has no notice of fraud) - original defrauded seller can only sue for economic loss but not be able to get property back

1. Deed must be delivered to be effective
2. Once delivered (and accepted) transfer is irrevocable
3. Delivery can be actual/manual or constructive
4. Recording of deed by GRANTOR is certain delivery
   1. can be to escrow agent and not to buyer
   2. If in possession of grantee, delivery is presumed

1. Who has possession of the deed
2. Was it recorded - who recorded it?
3. Who has access to the deed
4. Did the grantor manifest an intent to transfer title
5. Has the grantee seen the deed
6. Has the grantee touched the deed
7. Who is acting like the owner of the land in use
8. Does the grantee know where the deed is
9. Is the deed in custody of a third person

1. A Valid Deed
   1. writing
   2. name of grantor and grantee
   3. adequately describe the real property to the EXCLUSION OF ALL OTHERS
   4. words of intent to convey
   5. signed by the grantor
2. Delivery of the deed - actual or constructive
3. Acceptance of the deed by grantee

1. What is the benefit of the covenant to the dom estate?
2. What are the changed conditions
3. How do changed conditions make it difficult to get benefit from the covenant

Think about El Di Bethany Beach

Non disclosure (nonfeasance) Must disclose

1) known facts,

2) material to the sale,

3) not within reach of diligent attention of buyer

SOme states limit to factors only on property

Some states also include psychological issues with home

Do not need to disclose facts that are reasonable 

Grantor Index first - current owner going back in time

Grantee Index - start at 40-50-60 years past and go forward

Both should agree - grantee may have more items for eastment

Someone else lives in the property

If a recorded instrument refers to another lease, mortgage, life estate, etc

Or by and oral statement made by another interest holder

Paid value for her interest - not nominal but does not need to be full purchase price

A bond fide purchaser cannot be adonee, gift, inhereted

Mortgage is a conveyance of a security interest in real property- not just a loan

Mortgagor - borrower

Mortgagee - creditor

Two documents - note and mortgage

Mortgage deed needs parties, intent, description

Lien Theory - mortgage has merely a security interest in the property - majority of jurisdictions

Title Theory - Title to the property is in the mortgage until note is paid

Conventional - Buyer gets possession and builds equity

Deed of Trust - CA - Borrower conveys land to 3rd party (trustee) who holds it as benefit to holder of note

Purchase money mortgage - financed by seller

Equitable mort - real property as security for a diff. debt

Installment Land contract - no down pay, monthly pay, like buying a car

Default - fails to make monthly payments for X period

Equity of redemption-can't be voided - opp. to cure default

Foreclosure - after eq. of redemption runs out

Two types of foreclosure-Judicial (public, notice, fair price) or Power of sale (no judicial action, based on lang. in mort)

Statutory right of redemption - some states allow debtor to redeem after foreclosure