However, certain reasonable restraints will be given effect in most jurisdictions. These traditionally include:
Some specific restraints on alienation 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 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, "chills," the interest of the person getting ready to sell the property which is the same effect as the disabling restraint.
Forefeiture 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 five basic conditions that must be met in order for there to be an effective real covenant and equitable servitude.
Also note that there are some material differences between the real covenant and equitable servitudes.
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