Neponsit Property Owners' Association v. Emigrant Industrial Savings Bank

Facts

In January, 1911, Neponsit Realty Company filed a map of a tract of land in Queens County that it developed as a strictly residential community. It conveyed lots by deeds referring to the map and its roads. In 1917, the realty company conveyed the land now owned by the defendant to Robert Oldner Deyer and his wife. The deed provided that the property was subject to an annual charge not exceeding four ($4.00) Dollars per lot 20 x 100 feet, payable on the first day of May in each year. The charge was to be devoted to maintaining roads, paths, parks, beach, sewers, and other public purposes. The deed made the charge a lien on the land until paid, and provided that the covenants should run with the land until January 31st, 1940. It also provided that assigns of the grantor could include a property owners association organized for those purposes, to which the charges would be payable with the right to enforce the lien. Every subsequent deed in the chain of title conveyed the property subject to the covenant. The defendant bought the land at a judicial sale under a referee's deed containing that provision. Neponsit Property Owners' Ass'n, formed as a membership corporation of property owners to receive and expend the funds, sued as assignee to foreclose the lien.

Issues

1. Does an affirmative covenant in a deed requiring the grantee to pay an annual assessment for the maintenance of roads, parks, beaches, and sewers touch and concern the burdened land so as to run with the land?
2. Does a property owners association formed as the representative of landowners have privity of estate to enforce a real covenant running with the land when it owns no property benefited by the covenant?

Holding

The covenant to pay an annual assessment to maintain roads, parks, beaches, and sewers touched and concerned the defendant's land because the burden of payment was inseparably attached to the land's appurtenant easement of common enjoyment in those improvements. Furthermore, the property owners association could enforce the covenant and foreclose the lien because, looking behind corporate form to substance, the association acted as the agent and representative of the benefited property owners, creating privity of estate in substance.