I. COVENANTS
Implied Reciprocal Negative Servitudes in Residential Subdivisions
Binds buyers in a planned development community even though the grantor omits to incl. the mutual restrictions in subsequent deeds.
Solves problem of an earlier buyer wanting to enforce a covenant against later buyers.
Elements:
Common Scheme of Development
Developer’s Intent
Notice (constructive notice – presumed to know and recorded in registry of deeds; actual notice; inquiry notice – should have made an inquiry to know)
Numerous Covenants
Terminology:
Grantor Covenant: Promise by developer to restrict remaining lots
Grantee Covenant: Promise by buyer to restrict her usage
Evans v. Pollock (1990): page 395
§ P sought to enjoin the commercial use of unrestricted lots within a subdivision where a majority of the lots contained a restriction against commercial use.
§ By statute, declarations can be filed and then buyers are bound by covenants
§ RULE: A general plan of subdivision restriction need not be incl. in the deeds of all tracts for the doctrine of implied reciprocal negative servitude to apply.
§ In Pollock, restrictions apply to lakeside lots but not to the hillside
§ Part of development plan constrained – half a win essentially
§ Sanborn v. McLean (1925): page 399
§ Riley v. Bear Creek Planning Committee (1976): page 399
§ Reciprocity – if good at reciprocity, will serve you well, especially in legal realm
§ Book called The Evolution of Cooperation – had everyone enter a strategy program (iterative Prisoners’ Dilemma) of 10 moves played over time; tit for tat is example of strategy that evolved (do unto others as they did unto you)…this was a good strategy b/c it seeks to cooperate but is nobody’s fool…so what is a strategy that will defeat tit for tat? Once you defect, then you are finished. OR, once wronged once, then retaliate twice/twofold.
§ Prisoners’ Dilemma – separating suspects into individual interrogations; suspects have several strategic moves (can cooperate and keep quiet about fault – lesser conviction; can both defect and snitch on other)
Cooperate
Defect
Cooperate
3,3
5,0
Defect
0,5
1,1
§ If want to do something together effectively, then both must cooperate – must get rid of incentives to defect that lead to Prisoners’ Dilemma
§ Implied reciprocal negative servitudes, with emphasis on reciprocity, looks at end of chain where cooperation breaks down and defection becomes more likely
Interpretation of Ambiguous Covenants
Blevins v. Barry-Lawrence County Association for Retarded Citizens (1986): page 406
§ Ps contended that a group home for retarded adults violated the restrictive covenant on the land which incl. lang: “for residential purposes only” and “single or double family dwellings.”
§ First Issue: Can property be used as group home for retarded individuals? Does this offend a restriction for residential purposes?
§ Second Issue: Whether intended use of property and size increases violates restrictive covenant
§ RULE: Ambiguous restrictive covenants should be read narrowly to allow the least restrictive use of the land.
§ Courts trad. interpret ambiguous covenants in the manner that would be least restrictive to the free use of land.
Modifying and Terminating Covenants
Bases:
1) Changed Conditions
2) Relative Hardship-A covenant will not be enforced if the harm caused by enforcement, that is, the hardship to the owner of the servient estate, will be greater by a considerable magnitude than the benefit to the owner of the dominant estate.
3) Other Equitable Defenses
a) Acquiescence to violation by the servient estate
b) Unclean Hands-violation by the dominant estate holder
c) Abandonment-violations by other owners in the restricted parcels
d) Estoppel
e) Laches
f) Marketable Title Acts
g) Other Ways to terminate covenants:
a. merger
b. lang. in instrument
c. release
d. prescription
El Di, Inc. v. Town of Bethany Beach (1984): page 411
P (Bethany Beach) sought to enforce a restrictive covenant prohibiting the sale of alcoholic beverages, even though the nature of the neighborhood had changed greatly since the creation of the covenant.
§ Holding: Restriction on selling liquor done away with
§ Covenants will not be enforced if conditions have changed so drastically inside the neighborhood restricted by the covenants that enforcement will be of no substantial benefit to the dominant estates.
§ Under the changed conditions doctrine, a covenant becomes unenforceable when conditions in the area of the burdened land have so substantially changed that the intended benefits of the covenant cannot be realized.
Blakeley v. Gorin (1974): page 420
§ Restriction of value
§ End result is that case remanded and denial of enforcement of covenant based on several statutory grounds – see page 422
1) Changes in the character of properties affected or their neighborhood….and circumstances that reduce materially the need for restriction or the likelihood that restriction will accomplish original purpose
2) Continuation of restriction would impede reasonable use of land for purposes for which it is most suitable, and would tend to impair growth of neighborhood/municipality in a manner inconsistent with public interest
3) Enforcement, except by award of $, is for any other reason inequitable or not in the public interest
Regulation of Covenants and Homeowners Associations
An increasing number of Americans live in a common interest community or CIC, where their properties are subject to comprehensive land use restrictions administered by private associations. A common interest community is usually created through a document called a declaration.
In a condominium, each owner (1) holds fee simple title to an individual unit (usually a cube of airspace); and (2) also owns an undivided interest in the common areas of the development (e.g., the building, recreational facilities, parking lot) as a tenant in common.
Relations Between Unit Owners and Developers
Appel v. Presley Companies (1991): page 429
§ Appels make 3 claims – breach of restrictive covenants, negligent and fraudulent misrepresentations, and unfair trade practices
§ Presley who is the developer and owner in the subdivision record
raint on alienation unless: 100% vote of the Club OR the Club is officially dissolved
o 1987 – plaintiff registers as a charitable corporation
o 1988 – plaintiff calls special meeting to approve land swap and defendant, as member of Club, votes against proposed land deal and plaintiff files bill seeking declaration that restriction in deed void as an unreasonable restraint against alienation
o Superior Court applies rule of reasonable restraints and finds that deed invalid
o However, this court says that reasonable restraint rule generally dos not apply in the case of a gift of a charitable trust or charitable corporation. Yet sale of land may be permitted despite valid restraint against alienation if court of equity determines that due to unforeseen circumstances, the sale is necessary and would be in the best interest of the charity.
o On remand, court must determine whether plaintiff is charitable entity, and if so, whether restraint valid, or whether plaintiff is non-charitable entity and rule of reasonable restraints would apply.
§ Consent to sell provisions – grantor consent clauses
§ e.g., Northwest Real Estate Co. v. Serio (1929): page 453
o D incl. a covenant in a fee-simple deed preventing its grantees from subsequently selling or renting a property prior to certain date w/o its consent. The grantees attempted to sell the property to Serio (P) before the required date, and D refused to consent.
o Held that restriction not to sell lot was repugnant to the fee-simple title which the deed conveyed
o Rule:Covenants restraining a grantee’s ability to sell property are in consistent with a grant of fee simple and are thus invalid.
o Public Policy (not specifically mentioned in this case):
Don’t want dead hand control
Encourage free use of land
Encourage sales of land
Inefficiency or delay in sale of land
§ e.g., Riste v. Eastern Washington Bible Camp, Inc. (1980): page 454
o Eastern Wash. Bible Camp (D) sold land in a subdivision w/ the restriction that the “No residents/occupants of these premises shall conduct themselves in such a manner as to be in conflict with the general practices and principles of the [church]…need written consent of the seller [church] and that restricting to members of the church reasonable.
o Rule in WA: clause in deed prohibiting grantee from conveying land to another without approval of grantor, when grantor transferred fee simple estate to grantee, is void as repugnant to nature of an estate in fee; restrictive restraint on sale of fee simple title is also invalidated upon public policy grounds.
o Also, Law Against Discrimination further makes the deed void
