Under FBI Farms, when are transfer restrictions generally valid?

• A. They are always invalid.
• B. They are generally valid only against buyers who knew of them.
• C. They are generally valid against buyers who knew about them when purchasing.
• D. They do not transfer to a creditor.

Answer: (C)

Transfer restrictions are covenants that bind the property and flow with title, but their enforceability against a buyer depends on notice. The critical idea is that knowledge acts as the trigger for binding: a buyer who knows about the restriction at the time of purchase has consented to be bound by it, so the limitation becomes part of their ownership and travels with the land. If the buyer is unaware at purchase, the restriction is less likely to bind them unless there was some form of notice (actual or constructive) in the recording chain. Therefore, the restriction is generally valid against buyers who knew about them when purchasing. This reflects how notice governs whether such covenants run with the land and bind subsequent transferees.