Can You Be Bound By Agreements You Don’t Sign?

Can you be bound to, and obligated to follow, a contract that you didn’t sign? That may seem counterintuitive, and even non-lawyers know that to be bound to a contract, you have to have signed it or agreed to it. However, in real estate law, things are a little different. In real estate law, when you buy a home, there may be things that you have to abide by that you never actually expressly agreed to.

Covenants and Agreements

An agreement between two parties is often also called a covenant. If a buyer and seller both agree that the seller will fix the fence on the home, the agreement is between that buyer and seller, and nobody else. It is an agreement or a covenant that is personal to them that can only be enforced against each of them and no one else.

Running With the Land

In real estate law, some agreements or covenants do what’s known as “running with the land.” That means that the agreement “sticks” to the property, thus binding every subsequent owner of the property.

Almost every kind of covenant that runs with the land this way is filed in public records, so if you are a buyer of property, you won’t be surprised by a sudden covenant that you didn’t know existed. But, you will be bound by the covenant if you buy the property.

Although this may sound scary, we do it all the time. For example, buying property subject to a homeowners association (HOA), and having an obligation to pay those dues, even if you didn’t expressly agree to them.

Easements work the same way—you may not have agreed to let the city walk through your property to access an electrical line, but that’s an agreement that runs with the land. By buying the property, you agreed to it.

What Runs With the Land?

Often, there is a dispute about whether an agreement or requirement is, in fact, a covenant that runs with the land. A covenant will be considered to run with the land where it is one that affects or limits the use, enjoyment, or value of the property itself.

Take, for example, zoning requirements. If the covenant were to say that property could only be residential in nature, that would restrict the ability to use and enjoy the land—that would run with the land. A contract between parties may also expressly say that the covenant runs with the land, thus binding all subsequent buyers or owners of the property.

Personal Covenants

Personal covenants are those that don’t run with the land, and only bind the parties to the agreement. These can usually be enforced, independent of the land. An agreement for one party to pay a fine on a property, for example, would not run with the land—it can be enforced independent of the property itself.

Question about your real estate contract or agreement? Contact the Tampa real estate lawyers at the Gilbert Garcia Group, P.A. today.

Sources:

law.cornell.edu/wex/covenant_that_runs_with_the_land

miamidade.gov/environment/library/forms/rbca-standard-covenant.pdf