Reference no: EM131109873

In 2000, Wife purchased Blackacre, a commercial building. In 2002, Wife married Husband, and thereafter Husband managed Blackacre by collecting rents, negotiating leases and making repairs and improvements that increased the value of Blackacre. Wife continued to own Blackacre in her own name.At the time of the marriage, Husband was employed as a firefighter in C City, where the couple lived. Husband worked an overnight shift, which allowed him the flexibility to manage Blackacre.

In July 2010, Husband negotiated a lease for one of the commercial units in Blackacre with Tenant, the operator of a retail store, for a five-year term ending in June 2015. In addition to the rent, the lease required Tenant to be responsible for all repairs to the store.After the lease expired in June 2015, Tenant remained in possession, paying the rent each month. In December 2015, a  water pipe burst in the store, causing extensive damage. Tenant remained in possession but refused to pay any further rent or to repair the damage to the store, claiming that, because the lease had expired, he was no longer required to make repairs. Shortly after their marriage, Husband and Wife had purchased a lot in a subdivision of 50 lots owned by Owner. The deed for every lot Owner sold in the subdivision, including Husband's and Wife's lot, contained a restrictive covenant stating that only a single-family house could be built on each lot, and that the covenant would be binding on all successors in interest. The deeds for all of the lots were recorded with the county clerk.

In 2008, Husband and Wife built a single-family house on their lot and moved in.

In 2013, Husband and Wife sold the house to Wife's sister, Val. The deed from Husband and Wife to Val did not contain the restrictive covenant. Val decided to convert the house into a two-family residence and rent the second apartment. Val was about to begin the conversion when she received a letter from Owner, who still owns some lots in the subdivision. Owner threatened legal action to prevent Val from converting the house into a two-family residence in violation of the restrictive covenant contained in the deed from Owner to Husband and Wife. Val contends that the restrictive covenant is invalid as an unreasonable restriction on her use of her property and, in any event, is not applicable to her, as it does not appear in her deed.

As an employee of C City, Husband has participated in C City's pension plan since before his marriage to Wife. For each month and year of service, he receives incremental credits which enter into the computation of what his pension will be when he reaches age 60. Husband is vested in the plan, and if he leaves C City employment before reaching age 60, he will nevertheless receive a pension at age 60.

Husband continues to manage Blackacre, which has substantially increased in value. Wife is considering seeking a divorce from Husband.

1. If Wife seeks a divorce, under equitable distribution:

(a) To what extent, if any, will Husband have the right to share in the value of Blackacre?
(b) To what extent, if any, will Wife have the right to share in the value of Husband's pension plan?

2. What liability, if any, does Tenant have for rent and the repairs?

3. Is the restrictive covenant valid and enforceable against Val?