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12. Which is the most appropriate comment concerning the outcome of this action?
The recent graduate, joined by the owners of Lots 1, 3, and 5, brought an appropriate action against the law student to enjoin the proposed use of Lot 4, or, alternatively, to recover damages caused by the law student's breach of covenant.
Last month, the businessman conveyed Lot 4 to a law student. The deed contained no restrictions. The deed from the businessman to the recent college graduate was in the title report examined by the law student's lawyer. The law student obtained a building permit and commenced construction of a two-family residence on Lot 4.
One year ago, the businessman conveyed Lot 2 to a recent college graduate. The deed provided that each of the recent graduate and the businessman, their respective heirs and assigns, would use Lots 2 and 4 respectively only for one-family residential purposes. The deed was promptly and properly recorded. The graduate built a one-family residence on Lot 2.
A businessman owned five adjoining rectangular lots, numbered 1 through 5 inclusive, all fronting on Main Street. All of the lots are in a zone limited to one- and two-family residences under the zoning ordinance. Two years ago, the businessman conveyed Lots 1, 3, and 5. None of the three deeds contained any restrictions. Each of the new owners built a one-family residence.
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An equitable servitude in a deed is only enforceable where a party can establish (i) intent that the restriction be enforceable by subsequent grantees; (ii) that the subsequent grantee had notice of the servitude; and (iii) that the restriction touches and concerns the land. Privity, notably, is not required.
B is correct. The restriction in the deeds of Lots 2 and 4 constitutes an equitable servitude. The express language of the deeds, («the recent college graduate and the businessman, and all their respective heirs and assigns»), indicates that the restriction is intended to bind subsequent grantees. The college graduate's recorded deed (that showed up in the title search) provided the law student with record notice of the restriction. And a restriction on what can be built on the land clearly touches and concerns that land, so the equitable servitude is enforceable. The restriction, however, may only be enforced against the law student by the college graduate.
A is incorrect. For an equitable servitude to bind an entire subdivision, however, it must be found in the common building plan for that subdivision. There is no such plan according to the facts presented, so only the owner of a lot with a deed identifying the restriction may enforce that restriction.
C is incorrect. As explained above, the remedy for a violation of the servitude is an injunction, not damages. Further, the law student can build whatever she wants, as long as it does not violate other laws.
D is incorrect. If a zoning preemption was present in the facts, this answer would be true, since zoning laws preempt any covenants or servitudes. However, no zoning preemption is mentioned in the facts, so this answer is incorrect.