To establish a valid and enforceable covenant running with the land arising from a landlord-tenant relationship, a plaintiff must show (1) the existence of a covenant that touches and involves the land, (2) an intention that the covenant run with the land, and (3) notice of the restriction on the part of the party against whom enforcement is sought.
A property lease granted Winn-Dixie grocery store the exclusive right to sell groceries in a town plaza. It also stated that other stores could sell groceries, but only if they devoted no more than 500 square feet to the grocery items in their stores. The covenant was deemed in the lease to run with the land. Dolgencorp, who operated Dollar General stores, opened a location in the plaza and dedicated more than 500 square feet of its store to groceries. Dolgencorp was aware of Winn-Dixie’s exclusive lease. The trial court held the covenant did not run with the land, but the appellate court reversed.
Did the grocery exclusive covenant in the appellant’s lease run with the land?
Yes, the court held the covenant ran with the land and that the appellee had constructive notice of it under the recording statute.
The court held that the covenant ran with the land and there was constructive and implied notice of it under the applicable recording statute. The appellant was able to show that the covenant touched and concerned the land, the lessor intended the covenant to run with the land, and the opposing party had notice of the covenant. The court reasoned that the parties were experienced, sophisticated commercial tenants that had prior history with covenants such as the one at issue. Thus, the appellee was obliged to inquire further as to the grocery exclusive covenant and whether it was bound by it before acting.