Pennsylvania Agreement Creating Restrictive Covenants

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Multi-State
Control #:
US-0064BG
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Word; 
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Description

If you are planning on buying a home, condominium, townhouse, or other property, you must take note of whether any restrictive covenants will affect your ability to use your new residence.

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FAQ

Covenants are either personal, restricting only the party who signs the agreement, or they "run with the land," passing the burden along to subsequent property owners. A restriction is simply a limitation on the use of the land.

A restrictive covenant is a contract between 2 landowners. One landowner promises the other landowner not to carry out certain acts on their own land. Restrictive covenants usually happen when somebody selling land wishes to restrict what the buyer can do with it.

Rights and privileges over your property given to others are usually called easements or rights-of-way. Restrictions on your land are called restrictive covenants.

Pennsylvania courts will blue pencil and reform unreasonable noncompetition agreements to enforce only the reasonable provisions in the agreement. [33]Drafting. Restrictive covenants should be carefully drafted, as they are disfavored as a restraint on trade and any ambiguity will be construed against the employer.

Restrictive covenants are primarily governed by state law, and their enforceability can vary significantly from state to state. In a majority of states, restrictive covenants will be enforced, provided they are reasonable in duration and geographic scope.

The courts will restrain an ex-employee from violating a restrictive covenant only when the circumstances make it reasonable to enforce. However, a Pennsylvania court will look only at the terms when the ex-employer sues for damages, not an injunction. It will not consider the reasonableness of the agreement.

Equitable servitudes differ from covenants in that: They are enforceable by injunction, while a real covenant is remedied by money damages. No horizontal or vertical privity is required for a servitude to run with the land. Servitudes are ownership interests in land, while real covenants are promises.

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Pennsylvania Agreement Creating Restrictive Covenants