A restraint on alienation, in the

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior, with its precise definition a matter of longstanding debate. It has been variously described as a science and as the ar ...

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...

, is a clause used in the conveyance of

that seeks to prohibit the recipient from selling or otherwise transferring their interest in the property. Under the

common law Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...

such restraints are void as against the

public policy Public policy is an institutionalized proposal or a Group decision-making, decided set of elements like laws, regulations, guidelines, and actions to Problem solving, solve or address relevant and problematic social issues, guided by a conceptio ...

of allowing landowners to freely dispose of their property. Perhaps the ultimate restraint on alienation was the

fee tail In English common law, fee tail or entail is a form of trust, established by deed or settlement, that restricts the sale or inheritance of an estate in real property and prevents that property from being sold, devised by will, or otherwise ali ...

, 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. However, certain ''reasonable'' restraints will be given effect in most jurisdictions. These traditionally include: # A prohibition against partition of property for a limited time. # The

right of first refusal Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transactio ...

– 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. # The establishment of public parks and gardens, as was the case for the

Royal Parks of London The Royal Parks make up land that was originally used for the recreation, mostly hunting, by the royal family. They are part of the hereditary possessions of The Crown, now managed by The Royal Parks, a charity which manages eight royal pa ...

in the UK. These public spaces were created under such terms by the

Crown Estate The Crown Estate is a collection of lands and holdings in the United Kingdom belonging to the British monarch as a corporation sole, making it "the sovereign's public estate", which is neither government property nor part of the monarch's priva ...

; which meant that these parks were held in

perpetuity In finance, a perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. There are few actual perpetuities in existence. For example, the United Kingdom (UK) government issued them in the past; these were kno ...

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 the

promissory note A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...

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: # Type of price (fixed or not fixed; courts prefer non-fixed) # Purpose: Is it a legitimate purpose, or not? (courts prefer legitimate) # Equal bargaining power of the parties # Duration (a time limit to the restraint is preferred) # Limit to the number of persons to which transfer is prohibited # 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: # It must be

enforceable An unenforceable contract or transaction is one that is valid but one the court will not enforce. Unenforceable is usually used in contradiction to void (or ''void ab initio'') and voidable. If the parties perform the agreement, it will be vali ...

. To be enforceable it must not be too vague, it must not violate a

statute A statute is a law or formal written enactment of a legislature. Statutes typically declare, command or prohibit something. Statutes are distinguished from court law and unwritten law (also known as common law) in that they are the expressed wil ...

or the

constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organization or other type of entity, and commonly determines how that entity is to be governed. When these pri ...

, it must not violate public policy, and it must meet the requirements under the

statute of frauds The Statute of Frauds ( 29 Cha. 2. c. 3) (1677) is an act of the Parliament of England. In its original form it required that certain types of contracts, wills, and grants, and assignment or surrender of leases or interest in real property mu ...

. # It must touch and concern the land. # It must be intended to run. # There must be privity between the successive occupants. # There must be notice of the existence of a real covenant/equitable servitude.

New Zealand law

New Zealand New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...

, ''Te Ture Whenua Maori Act 1993/Maori Land Act 1993'' puts restrictions on alienation of land owned by a

Māori Māori or Maori can refer to: Relating to the Māori people * Māori people of New Zealand, or members of that group * Māori language, the language of the Māori people of New Zealand * Māori culture * Cook Islanders, the Māori people of the Co ...

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". These preferred classes include ''whanaunga'' (blood relations) of the owner, other current owners, and members of the owner's

hapū In Māori language, Māori and New Zealand English, a ' ("subtribe", or "clan") functions as "the basic political unit within Māori society". A Māori person can belong to or have links to many hapū. Historically, each hapū had its own chief ...

.Section 4, Te Ture Whenua Maori Act 1993/Maori Land Act 1993
.

References

{{Property navbox Property law

New Zealand law

See also

References