15 N.E.2d 793
In January 1911, Neponsit Realty Company filed a map of its tract of land in Queens county with the county clerk.1 The company developed the tract for a strictly residential community and conveyed lots described by reference to the filed map and the roads and streets shown on it.2 In 1917, Neponsit Realty Company conveyed the land now owned by the defendant to Robert Oldner Deyer and his wife by a deed containing the covenant at issue.3
The covenant required the grantee and successors to pay an annual charge, not exceeding four dollars per lot measuring twenty by one hundred feet, to the grantor or its assigns, which could include a property owners association.4 The sums were to be devoted to the maintenance of roads, paths, parks, beach, sewers, and other public purposes determined by the grantor or assigns.5 The covenant provided that the charge would become a lien on the land each May first until paid.6 It stated that the covenants would run with the land until January 31, 1940.7
Every deed in the defendant's chain of title, including the referee's deed conveying the property to the defendant after its purchase at a judicial sale, recited that the conveyance was subject to the covenants and restrictions contained in former deeds of record.8
The plaintiff, Neponsit Property Owners’ Association, Inc., as assignee of Neponsit Realty Company, commenced this action to foreclose the lien arising from the covenant.9 The defendant interposed an answer containing denials, seven affirmative defenses, and a counterclaim.10 The defendant moved for judgment on the pleadings dismissing the complaint, while the plaintiff moved to dismiss the counterclaim and to strike the affirmative defenses.11 The Special Term granted the plaintiff's motion and denied the defendant's motion.12 The Appellate Division unanimously affirmed the order and granted leave to appeal to the Court of Appeals on certified questions.13
Whether the covenant to pay an annual charge for maintenance of roads, paths, parks, beach, sewers and other public purposes touches or concerns the land?14
The age-old essentials of a real covenant are (1) intent that the covenant should run with the land; (2) the covenant touches or concerns the land; (3) privity of estate between the parties.15 A covenant touches or concerns the land if it affects the legal relations of the parties as owners of particular parcels of land.16 It must impose a burden upon an interest in land which increases the value of a different interest in the same or related land.17 Affirmative covenants to pay money ordinarily do not run with the land.18 An exception applies where the payment is for maintenance of improvements that benefit the land with an appurtenant easement or right of enjoyment.19
Yes. The grantee obtained not only title to particular lots but an easement or right of common enjoyment with other property owners in roads, beaches, public parks or spaces and improvements in the same tract.20 For full enjoyment in common by the defendant and other property owners of these easements or rights, the roads and public places must be maintained.21 In order that the burden of maintaining public improvements should rest upon the land benefited by the improvements, the grantor exacted from the grantee of the land, with its appurtenant easement or right of enjoyment, a covenant.22 The burden of paying the cost should be inseparably attached to the land which enjoys the benefit.23
It is plain that any distinction or definition which would exclude such a covenant from the classification of covenants which touch or concern the land would be based on form and not on substance.24
The covenant touches and concerns the land.25
Whether privity of estate exists between the plaintiff property owners association and the defendant?26
Privity of estate is required for a covenant to run with the land at law.27 Enforcement of restrictive covenants rests upon equitable principles.28 At times the violation of the restrictive covenant may be restrained at the suit of one who owns property, or for whose benefit the restriction was established, irrespective of whether there were privity either of estate or of contract between the parties.29 Where a property owners association is formed as a convenient instrument by which the property owners may advance their common interests, acting as the agent or representative of the property owners, the court may look behind the corporate form to find privity in substance if not in form.30
Yes. The plaintiff has been organized to receive the sums payable by the property owners and to expend them for the benefit of such owners.31 The plaintiff does not own property in the residential tract to which any easement or right of enjoyment is appurtenant.32 The corporate plaintiff has been formed as a convenient instrument by which the property owners may advance their common interests.33
The Neponsit Property Owners Association, Inc., is acting as the agent or representative of the Neponsit property owners.34 In substance if not in form the covenant is a restrictive covenant which touches and concerns the defendant's land, and in substance, if not in form, there is privity of estate between the plaintiff and the defendant.35
Privity of estate exists between the plaintiff and the defendant.36
Whether the plaintiff may enforce the covenant as assignee of the grantor?37
The covenant provides that its benefit shall run to the assigns of the grantor who may include a Property Owners’ Association which may hereafter be organized for the purposes referred to in the paragraph.38 The plaintiff has been organized to receive the sums payable by the property owners and to expend them for the benefit of such owners. The plaintiff is the assignee of Neponsit Realty Company.39
Yes. The covenant states that the assigns of the party of the first part may include a Property Owners’ Association which may hereafter be organized for the purposes referred to in this paragraph.40 The plaintiff, Neponsit Property Owners’ Association, Inc., as assignee of Neponsit Realty Company, has been formed to receive the sums and expend them for the benefit of the property owners.41 When the association was formed, the property owners were expected to, and have looked to that organization as the medium through which enjoyment of their common right might be preserved equally for all.42
The plaintiff may enforce the covenant as assignee of the grantor.43
Whether the alleged lien based on the covenant is unenforceable under sections 242 and 259 of the Real Property Law?44
A defense that an alleged lien based upon a covenant constitutes an interest in land and is unenforceable under the provisions of sections 242 and 259 of the Real Property Law is insufficient.45
No. The defendant raised the defense that the alleged lien based upon the covenant set forth in the complaint constitutes an interest in land and is unenforceable under the provisions of sections 242 and 259 of the Real Property Law.46 The court has considered this defense and finds it insufficient because the covenant touches and concerns the land and runs with the land.47
The alleged lien is enforceable and not barred by sections 242 and 259 of the Real Property Law.48