Opinion ID: 2318744
Heading Depth: 1
Heading Rank: 7

Heading: Covenants Running with the Land

Text: We noted in the lease case of Mercantile-Safe Deposit and Trust Company v. Mayor and City Council of Baltimore, 308 Md. 627, 633-637, 521 A.2d 734, 737-38 (1987), that: Whether a covenant touches and concerns the land may be considered in terms of the burdens or benefits it imposes. Thus, the test is met if the performance of the covenant will `tend necessarily to enhance [the] value [of the land] ...,' Whalen .... ... It will be noted that the `benefit' and `burden' tests are stated in the alternative; if either is met, the covenant may be one running with the land.... ... The City nevertheless argues that these covenants could not run with the land because they dealt with something not in esse future restoration of the properties. This contention is based on Spencer's Case. ... ... The Maryland cases, therefore, give critical effect to the presence or absence of language binding successors and assigns. If these words are present, as they are here, the covenant is one running with the land or the functional equivalent thereof. That is, when the performance of the covenant touches and concerns the land within the meaning of the `benefit or burden' standard, it is deemed one running with the land, even when it deals with something not in esse, when the agreement expressly binds successors and assigns. Indeed, this reasoning is entirely consistent with the majority American view that makes no distinction between affirmative and restrictive covenants for the purpose of determining whether a covenant runs with the land.... ... ... That the covenants are to be performed in the future cannot, alone, defeat their characterization as covenants running with the land.... [Alterations in original.] The Court of Special Appeals has also addressed the issue: One of our leading cases involving real covenants is Gallagher v. Bell, 69 Md.App. 199-202, 516 A.2d 1028 (1986), cert. denied, 308 Md. 382, 519 A.2d 1283 (1987), where .... [footnote 9] Judge Wilner, [18] for the court, furnished a perspective from what is sometimes referred to as `the Rule in Spencer's Case,' 77 Ency. Rept. 72 (QB 1583), up to the time of the Gallagher decision, providing a complete review of the many aspects of covenant law. Bright v. Lake Linganore Association, 104 Md.App. 394, 417 n. 9, 656 A.2d 377, 389 (1995). While an in-depth discussion on the background of real covenants is not necessary in the case sub judice, the nature of covenants can be drawn from Mercantile, Gallagher, and Bright and similar case law, which nature aids our interpretation of the agreement at issue in this case. Bright, referring to Gallagher, provides: [I]nitially, ... in respect to land conveyances, `[c]ovenants ... may be regarded as being either personal in nature or as running with the land.' The difference, we opined, depended on whether burdens and benefits of the promises made `can devolve upon' the promisors' successors in title. ... [W]e noted that covenants to pay money for the maintenance of services relating to the land clearly, in our view, touched and concerned the land. We also stressed the importance of the parties' intent that covenants run with the land and opined that that intent may be determined from the language contained in the agreement or from other indicia. Id. at 418, 656 A.2d 377 (citation omitted) (one alteration in original). Under Maryland law, a covenant can run with the land if: (1) the covenant `touch[es] and concern[s]' the land; (2) the original covenanting parties intend the covenant to run; and (3) there be some privity of estate and that (4) the covenant be in writing. Mercantile-Safe Deposit and Trust Co., 308 Md. 627, 632, 521 A.2d 734, 736 (1987). Nevertheless, as discussed in Mercantile, even a covenant that, by its very terms, runs with the land may not be enforceable if the parties creating the covenant intend that it not run. Bright, 104 Md.App. at 421, 656 A.2d at 391. Moreover, simply because the settlement agreement states that the covenant is one that runs with the land does not necessarily make it so. Sanitary Facilities II, Inc. v. Blum, 22 Md.App. 90, 102-03, 322 A.2d 228, 235 (1974) (citing Glenn v. Canby, 24 Md. 127 (1866)); see also Bright, 104 Md. App. at 421, 656 A.2d at 391 (holding that covenants by their terms that run with the land may not be enforceable if the parties did not intend).