Question

Explain restrictive covenants, list the two common types, and give examples

Explain liens, list the two types, and give examples.

List and explain the three tenancy types of direct co-ownership

What issues are associated with water and mineral rights?

Answer 1

ANSWER

Restrictive covenants: A restrictive covenant is a contractual agreement that restricts one of the parties from a specific action. It means party gives consent to abstain from performing an act on the property or using the property in a certain way.

For example- If you go to purchase a house and it is compulsory to agree to use house only for residential purpose and not for business purpose, This agreement, which you enters into while purchasing house, is Restrictive covenant. Types of Restrictive covenants are:

• Non-solicitation covenant – An employee cannot approach customers of his/her ex-business in these type of agreements. These restrictions are generally imposed for some defined time period and within a defined location. These agreements are common in professional practices.
• Non disclosure agreement - In this, one party agrees not to disclose business secrets, trade secrets, proprietary processes or other specific information which provides competitive advantages to the business.

Liens - It is a claim or charge on another's property or asset. In this, creditor keeps the property of the person who owes him/her money until it has been paid. Lien protects the creditor in the event of non payment. For example - If you buy mobile or any other property on credit and fails to pay proper interest and installments, the company you bought it from can put a vendor's lien on it.

Types of lien are:-

• Consensual Lien : It is a type of lien which is obtained by the creditor with your agreement. In this, you agree to give a lender an interest in your property to serve as security for a loan.

• Non-Consensual Lien : Non-consensual liens come into play after you have failed to pay an obligation that was not generally thought of as secured. It is divided into two categories- Statutory liens(It is granted by law) and Judicial liens( It results from court action).

When more than one person has ownership or interest in property, it is called coownership. Tenancy type of coownership are:

• JOINT TENANCIES : In this you have equal rights to the whole property and if one of the owner dies, ownership is transferred to remaining owner(s).
• TENANTS IN COMMON : In this you can own different shares of the property. Further, the property doesn't automatically transfer to the other joint owner if one owner dies.

Some issues related to Mineral rights:

• Environmental Matters: Mineral extraction activities can create several environmental concerns such as noise, air, water, and soil contamination. rules and regulation should be given consideration.
• Due diligence : Proper research and careful planning is required before investing.
• Compensation the lessor receives for the use of surface property. This could be a initial upfront payment or made annually.

Issues of Water rights are associated with regulation and allocation of water and its sources. It also covers issues like right to have clean water and reductions in water overuse in agriculture.