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Property law
Part of thecommon law series
Types
Personal property Community property Real property Unowned property
Acquisition
Gift Adverse possession Deed Conquest Discovery Accession Lost, mislaid, and abandoned property Treasure trove Bailment License Alienation
Estates in land
Allodial title Fee simple Fee tail Life estate Defeasible estate Future interest remainder Concurrent estate Leasehold estate Condominiums Real estate Land tenure
Conveyancing
Bona fide purchaser Torrens title Strata title Deeds registration Estoppel by deed Quitclaim deed Mortgage Equitable conversion Action to quiet title Escheat
Future use control
Restraint on alienation Rule against perpetuities Rule inShelley's Case Doctrine of worthier title
Nonpossessory interest
Lien Easement Profit Usufruct Covenant Equitable servitude
Related topics
Fixtures Waste Partition Practicing without a license Property rights Mineral rights Water rights prior appropriation riparian Lateral and subjacent support Assignment Nemo dat Quicquid plantatur Conflict of property laws Blackacre Security deposit
Othercommon law areas
Contract law Tort law Wills,trusts andestates Criminal law Evidence Higher category:Law andCommon law
v t e

Arestraint on alienation, in thelaw ofreal property, is a clause used in the conveyance ofreal property that seeks to prohibit the recipient from selling or otherwise transferring their interest in the property. Under thecommon law such restraints are void as against thepublic policy of allowing landowners to freely dispose of their property. Perhaps the ultimate restraint onalienation was thefee tail, a form of ownership which required that property be passed down in the same family from generation to generation, which has also been widely abolished.^[1]

However, certainreasonable restraints will be given effect in most jurisdictions. These traditionally include:

1. A prohibition againstpartition of property for a limited time.
2. Theright of first refusal – for example, if Joey sells property to Rachel, he may require that if Rachel later decides to sell the property, she must first give Joey the opportunity to buy it back.
3. The establishment of public parks and gardens, as was the case for theRoyal Parks of London in the UK. These public spaces were created under such terms by theCrown Estate; which meant that these parks were held inperpetuity for the public to use.

Some specific restraints on alienation in the United States include:

Disabling restraints

To be effective the grantor must sue the grantee for enforcement. The effectiveness of the lawsuit could prevent the transfer from being made. In addition, if the disabling restraint is found to be unconstitutional the restraint will not be effective.

Promissory restraints

If thepromissory note is breached by the grantee, the grantor may sue for damages. Unlike disabling restraints, the effectiveness of the lawsuit does not prevent the transfer from being made. However, the Supreme Court says promissory restraints are not permissible. The promissory note discourages the person getting ready to sell the property which is the same effect as the disabling restraint.

Forfeiture restraints

In the event of a breach the property returns to the grantor or the grantor's heirs. The return happens automatically, hence the argument can be made that there is no state actions. However, according to a constitutional argument the mere fact that the state recognizes the validity of an automatic transfer makes it a state action.

To be effective the restraint must be reasonable and the restraint must be the same as a real covenant or equitable servitude.

There are six factors to determine if a restraint on alienation is reasonable:

1. Type of price (fixed or not fixed; courts prefer non-fixed)
2. Purpose: Is it a legitimate purpose, or not? (courts prefer legitimate)
3. Equal bargaining power of the parties
4. Duration (a time limit to the restraint is preferred)
5. Limit to the number of persons to which transfer is prohibited
6. A restraint that increases the value of property is more reasonable.

There are five basic conditions that must be met in order for there to be an effective real covenant and equitable servitude:

1. It must beenforceable. To be enforceable it must not be too vague, it must not violate astatute or theconstitution, it must not violate public policy, and it must meet the requirements under thestatute of frauds.
2. It must touch and concern the land.
3. It must be intended to run.
4. There must be privity between the successive occupants.
5. There must be notice of the existence of a real covenant/equitable servitude.

InNew Zealand,Te Ture Whenua Maori Act 1993/Maori Land Act 1993 puts restrictions on alienation of land owned by aMāori person, or by a group which is predominantly Māori. Sections 146 and 147 of the Act force an owner of Māori land who wishes to alienate their interest in the land to give right of first refusal to people belonging to "preferred classes of alienees".^[2] These preferred classes includewhanaunga (blood relations)^[3] of the owner, other current owners, and members of the owner'shapū.^[4]

• Moynihan, Cornelius J.Introduction to the Law of Real Property: An Historical Background of The Common Law of Real Property and its Modern Application, 4th ed. (St. Paul, Mn: Thompson West), 42.

• Property law

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