A covenant is a type of contractual arrangement. A restrictive covenant is a clause in a deed or lease to real property that limits what the owner of the land or lease/tenant can do with the property. Restrictive covenants allow surrounding property owners, who have similar covenants in their deeds, to enforce the terms of the covenants in a court of law. They are intended to enhance property values by controlling development.
A restrictive covenant is a promise included in a legal agreement that prevents one party in the contract from taking a specific action. When a party enters into a restrictive covenant, he/she agrees to refrain from using a property in a certain way that is restricted by the contract. Restrictive covenants in property is often imposed by the Landlord in a lease transaction or government. Some areas in Lagos state have restrictive order of government that dictates the kind of apartments that cannot be built in an area. In terms of tenancy, some landlords have restrictive order as to what their property can be used for. In tenancy agreements, it’s common to see that “this property can only be used for residential purposes only”. Using the property for any other purpose beside residential implies that restrictive covenant has been breached.
This article would be based on the relationship between a head landlord and a subtenant. Focusing on this, a restrictive covenant is an interest in property as it’s enforceable against persons with whom there is neither privity of contract nor privity of estate.
READ ALSO: PLEDGE OF LAND UNDER CUSTOMARY LAW
A plaintiff faced with the breach of a restrictive covenant in his favor, is naturally inclined first of all to seek an injunction to restrain further breach.
By virtue of their contractual relationship, privity of contract, the original parties remain liable to each other to perform those obligations throughout. The term notwithstanding that either or both subsequently dispose of their respective interests in the property.
Restrictive covenants at one time were used to prevent minorities from moving into residential neighborhoods. A group of homeowners would agree not to sell or rent their homes to African Americans, Jews, and other minorities by including this restriction in their real estate deeds. Until 1948 it was thought that this form of private discrimination was legal because the state was not involved. However, in Shelley v. Kraemer, 334 U.S. 1, 68 S. Ct. 836, 92 L. Ed. 1161 (1948), the U.S. Supreme Court held such covenants to be unenforceable in state courts because any such enforcement would amount to state action in contravention of the fourteenth amendment to the U.S. Constitution. For a state court to enforce such an agreement would foster a perception that the state approved of racially restrictive covenants. Although this kind of restrictive covenant is no longer judicially enforceable, racial restrictions are still contained in some deeds.
Covenants that touch and concern land: with the privity of contract as a barrier, a head landlord would never be able to enforce a covenant in the head lease against a subtenant. To get around this, the ingenuity of English judges enabled them to formulate the principle of privity of estate. A lease both creates an estate in the land for a specified period and at the same time constitutes a contract between the original parties. The lease involves some covenants on the part of the tenant. By this principle, a head landlord can sue a subtenant if he proved that the covenant in the head lease which the subtenant infracted touches and concerns the land. Covenants in a lease which touch and concern the land refer to those covenants which affect the landlord in his normal capacity as a landlord and the tenant in his normal capacity as a tenant, as distinct from those which impose purely personal or collateral obligations.
In Nigeria, breach of restrictive covenant in Nigeria gives the Landlord the right to re-enter possession of the property, this is always a proviso to breach of restrictive covenant in tenancy agreement. This is important to prevent the property from getting damaged further. However, it must be emphatically stated that the right to re-enter possession of the property does not give right to the landlord to enter possession and start throwing the properties of the tenant away. In Imagie v Chidolue (2015) LLER -319514 CA, Court of Appeal held “that the right to enter repossession of a rented apartment can only be exercised in accordance with the process of recovery of premise under Landlord and Tenancy laws”.
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