A Tenant's Perspective on SNDAs: Non-Disturbance Is Not Enough

Personal Covenants vs. Real Covenants

A covenant is simply an agreement. An in personam covenant binds the person who grants the covenant, whereas an in rem covenant binds a thing. Black's Law Dictionary indicates that "in personam" is a Latin phrase meaning "against a person" and that "in rem" is a Latin phrase meaning "against a thing." In personam, and In rem, Black's Law Dictionary (9th ed. 2009). In the real property context, in rem covenants are sometimes referred to as "real covenants" whereas in personam covenants are "personal covenants." A personal covenant only binds the person who makes the covenant and any successor who expressly assumes that covenant. In contrast, a real covenant binds the real property itself and is sometimes said to "run with the land." Any person who succeeds to the ownership of the property will also be bound to honor the real covenant, whether or not he or she expressly agrees to assume it, so long as he or she has actual or constructive notice of the covenant.

When a tenant continues in possession of its premises following a foreclosure, the successor landlord is bound by any real covenants in the lease, but not by any personal covenants of the prior landlord, unless expressly assumed. State law in the real property's location determines whether a covenant concerning that real property is a real covenant or a personal covenant. While state laws vary, they generally require that real covenants: 1) be in writing; 2) be intended by the parties to bind and benefit their respective successors; and 3) "touch and concern" the applicable real property. A successor landlord is not bound by a real covenant unless it acquires the burdened real property with actual or constructive notice of the covenant. See, Tanya D. Marsh; Stefan Szwarc, "Transforming Lease Covenants into Real Covenants," 29 PROB. & PROP. 35, 36 (2015).