In a deed, a grantee may agree to do something or refrain from doing certain acts. This agreement will become a binding contract between the grantor and the grantee. An example would be an agreement to maintain fences on the property or that the property will only be used for residential purposes. This kind of covenant is binding, not only between the grantor and the grantee, but also runs with the land. This means that anyone acquiring the land from the grantee is also bound by the covenant of the grantee. A covenant that provides that the grantee will refrain from certain conduct is called a restrictive or protective covenant. For example, there may be a covenant that no mobile home shall be placed on the property.
A restrictive or protective covenant may limit the kind of structure that can be placed on the property and may also restrict the use that can be made of the land. For example, when a tract of land is developed for individual lots and homes to be built, it is common to use the same restrictive covenants in all of the deeds in order to cause uniform restrictions and patterns on the property. For example, the developer may provide that no home may be built under a certain number of square feet. Any person acquiring a lot within the tract will be bound by the restrictions if they are placed in the deed or a prior recorded deed. Also, these restrictive covenants may be placed in a document at the outset of the development entitled "Restrictive Covenants," and list all the restrictive covenants that will apply to the tracts of land being developed. Any subsequent deed can then refer back to the book and page number where these restrictive covenants are recorded. Any person owning one of the lots in the tract may bring suit against another lot owner to enforce the restrictive covenants. However, restrictive covenants may be abandoned or not enforceable by estoppel if the restrictive covenants are violated openly for a sufficient period of time in order for a Court to declare that the restriction has been abandoned.
Agreements For Restrictive Covenant In New York
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Under the Noncompete Rule, the FTC adopted a comprehensive ban on new noncompetes with all workers, including senior executives. The final Noncompete Rule provides that it is an unfair method of competition—and therefore a violation of Section 5—for employers to enter into noncompetes with workers.
US FTC Rule Banning Non-Competes. On April 23, 2024, the U.S. Federal Trade Commission voted 3-2 to finalize and promulgate a rule banning most non-compete clauses in employer-employee contracts.
The following are the most common ways to get out of a non-compete agreement: Determine that the terms of the contract do not in fact prevent you from a desired course of action. Recognize when a non-compete contradicts the law. Negotiate a release agreement with the involved parties. Ignore the agreement.
A noncompete is unenforceable if it restricts an employee's ability to exercise their rights under federal law. No employer may enter into a covenant not to compete or a covenant not to solicit with any employee. Existing noncompetes are void and unenforceable, including out-of-state noncompetes.
In some states, an employee must receive actual payment in order to meet the consideration requirement for a non-compete. Other states, including New York (and New Jersey), view continued employment to be sufficient consideration to make a non-compete enforceable and actual payment is not required.
In New York, courts largely disfavor non-compete agreements and enforce them only when necessary. They consider four factors when determining whether to enforce an agreement: If the agreement protects legitimate business interests, e.g. trade secrets or special skills acquired during employment.
As a general rule, restrictive covenants entered into voluntarily will be enforced where the covenant is “reasonable in time and area, necessary to protect the employer's legitimate interests, not harmful to the general public and not unreasonably burdensome to the employee.” Reed, Roberts Associates, Inc.
Restrictive covenants are clauses that prevent, prohibit, restrict, or limit the actions of a person or entity named in a contract. Restrictive covenants are common in real estate transactions and apply to everything from the colors you can paint your house to how many tenants can live in a building.
A bill introduced in the New York State Senate on Feb. 10, 2025, would prohibit nearly all non-compete agreements arising in employment. Consistent with a national trend, non-competes for healthcare professionals would be banned.
Although New York State lawmakers passed a non-compete ban in 2023, Gov. Hochul vetoed the bill primarily because she wanted to see exceptions allowing non-competes in connection with the sale of a business and for high-income earners that have more negotiating power.