In what situation is a covenant considered a hypothetical condition?

A covenant is considered a hypothetical condition when it pertains to a situation where the covenant is not yet recorded. This means that while the terms of the covenant may exist and be valid, they have not yet been formally documented in a way that would legally bind the property. In real estate, the recording of a covenant is essential for it to have effect on third parties and for it to be enforceable. If the covenant has not been recorded, it is treated as a hypothetical condition because its existence and implications are uncertain until the proper legal processes are completed.

In situations where the existence of a covenant is unclear or unverified, it may also lead to considerations of hypothetical conditions, but this is more about the state of knowledge rather than the legal status concerning the recording of the covenant itself. If the property title is known to exist without restriction, it implies a straightforward scenario without the complications brought in by potential covenants. Lastly, if a covenant is legally binding on the owner, it indicates that the covenant has been properly established, and thus it would not be treated as a hypothetical condition at all.