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.
The following form shows one way in which Restrictive or Protective Covenants may be amended.
North Carolina Amendment to Protective Covenant
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Certain restrictive covenants will be enforceable, if you are able to prove that they are: reasonable. necessary to protect legitimate business interests; and. of a duration no longer than is necessary to protect those interests.
North Carolina Appellate Court Rules That Restrictive Covenants More Than 30 Years Old May Be Extinguished.
North Carolina Court Upholds 10-Year Restrictive Covenant Between Employer and Former Employee. When one thinks of a reasonable temporal scope for a restrictive covenant between employer and employee, usually that period is measured in months or years, not decades.
In North Carolina, courts are permitted to blue pencil restrictive covenants. This means that a court may decide not to enforce a part of the covenant that is distinctly separable in order to make the provision reasonable. However, a court is not able to re-draft an overly broad provision completely or from scratch.
In general terms, it provides that, when a person, alone or together with prior owners, owns real property for 30 years, certain interests created more than 30 years earlier are extinguished, giving the owner marketable record title free of those extinguished interests.
Although this case relates directly to development of property, it is clear that modifying restrictive covenants of any nature or kind is possible if deemed reasonable in the circumstances by the courts, which will of course be determined on a case-by-case basis.
North Carolina Appellate Court Rules That Restrictive Covenants More Than 30 Years Old May Be Extinguished.
Providing restrictive covenants are not void for restraint of trade and required to protect legitimate business interests, they will be viewed as legally binding.
To be enforceable a restrictive covenant must firstly touch and concern or somehow benefit other land, and the benefit must also have been intended to run with that benefitting land. The covenant cannot merely be a covenant of personal benefit to the original contracting party.
North Carolina Court Upholds 10-Year Restrictive Covenant Between Employer and Former Employee. When one thinks of a reasonable temporal scope for a restrictive covenant between employer and employee, usually that period is measured in months or years, not decades.