Property law: Nonpossessory interest - Covenant

A covenant, in its most general sense and historical sense, is a solemn promise to engage in or refrain from a specified action. Under historical English common law a covenant was distinguished from an ordinary contract by the presence of a seal. Because the presence of a seal indicated an unusual solemnity in the promises made in a covenant, the common law would enforce a covenant even in the absence of consideration. In United States contract law, an implied covenant of good faith is presumed.

A covenant is a type of agreement analogous to a contractual condition. The covenantor makes a promise to a covenantee to perform (affirmative covenant (American) / positive covenant (England and Wales)) or to refrain from (negative covenant) some action. In real property law, the juristic term real covenants means conditions tied to the ownership or use of land. A "covenant running with the land", meeting tests of wording and circumstances laid down in precedent, imposes duties or restrictions upon the use of that land regardless of the owner. Restrictive covenants are somewhat similar to easements and equitable servitudes, leading to some discussion about whether these concepts should be unified; in the US the Restatement (Third) of Property takes steps to merge these concepts as servitudes. Real covenant law in the US has been referred to as an "unspeakable quagmire" by one court.

Covenants for title are covenants which come with a deed or title to the property, in which the grantor of the title makes certain guarantees to the grantee. Non-compete clauses in the United States are also called restrictive covenants.

Landlords may seek and courts may grant forfeiture of leases such as in leasehold estates for breach of covenant, which in most jurisdictions must be relatively severe breaches; however, the covenant to pay rent is one of the more fundamental covenants. The forfeiture of a private home involves interference with social and economic human rights. In the case of leases commuted to a large sum payable at the outset (a premium), this has prompted lobbying for and government measures of leasehold reform particularly in the law of ground rents and service charges.