## Facts

- A subdivision developer conveyed a lot by deed that required the grantee to accept seasonal domestic water from the grantor’s well on separate property and to pay $35 per year.
- The deed stated that its covenants would run with the land and bind successors and assigns.
- Ownership of both the developer’s retained property and the conveyed lot later transferred to successors; Eagle became the developer’s successor and Gross became the lot owner.
- Later deeds in the chain did not reproduce the water covenant; Gross’s deed contained no reference to it.
- Gross drilled his own well for his year-round residence and refused to accept or pay for the seasonal water tendered by Eagle.
- Eagle sued to collect the annual fee, arguing the covenant ran with the land and bound Gross.

## Issues

1. Whether an affirmative deed covenant requiring a lot owner to accept and pay for seasonal water supplied from an off-site well “touches and concerns” the land so as to run with the land and bind a successor owner.
2. Whether express deed language stating the covenant “shall run with the land” is sufficient to bind successors when the covenant functions as a personal service obligation.

## Decision

- The Court of Appeals of New York affirmed dismissal of Eagle’s claim.
- The court held the water-purchase covenant did not run with the land and was not enforceable against Gross as a successor.
- Although privity of estate and an expressed intent to bind successors were present, the covenant failed the “touch and concern” requirement.

## Legal Principles

- A real covenant runs with the land only if there is privity of estate, the parties intended it to run, and the covenant touches and concerns the land.
- “Touch and concern” requires that the covenant substantially affect ownership, use, or enjoyment of the land as land; a merely contractual obligation to buy goods or services generally does not qualify.
- Labeling a promise as running with the land is not dispositive; courts examine the covenant’s substance and its relation to the land.
- Courts are reluctant to enforce perpetual affirmative obligations against successors, particularly when the burden is indefinite and not tied to any demonstrated land-related need or benefit.

## Conclusion

Because the obligation to purchase seasonal water from an off-site well operated as a personal contractual duty and did not materially affect the successor’s ownership or use of the property—especially after the successor obtained an independent water source—the covenant did not touch and concern the land and therefore did not run with the land against Gross.


Eagle Enters., Inc. v. Gross, 39 N.Y.2d 505 (N.Y. 1976)