Transfer of Property Act Section 40 — Burden of obligation imposing restriction on use of land

CHAPTER I PRELIMINARY

General

Summary

If someone has a right, based on a contract, to restrict how a piece of land is used—even though that right is not a full ownership interest or an easement—that right can be enforced against a new owner who knew about it, or who received the land as a gift. However, the right cannot be enforced against a buyer who paid for the land and had no knowledge of the restriction. For example, if a person agrees to sell a property and then sells it to someone else who is aware of the original agreement, the first buyer can still enforce the agreement against the new owner.

Official Text

Where, for the more beneficial enjoyment of his own immoveable property, a third person has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment2 [in a particular manner of the latter property], or or of obligation annexed to ownership but not amounting to interest or easement.—where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor against such property in his hands. Illustration A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.