Covenants no longer strictly construed to reduce encumbrances on land but are now interpreted to achieve the intent of the parties

Posted on May 19th, 2012 by Joseph William Singer.
Categories: Consumer protection, Real estate transactions, Servitudes.

A New Mexico Appeals Court joined the modern trend in rejecting the interpretive rule that covenants should be narrowly construed, instead adopting the modern approach of interpreting the grant to achieve the grantor’s intent. Agua Fria Save The Open Space Ass’n v. Rowe, 255 P.3d 390 (N.M. 2011). When the language of the grant is unclear, “evidence of the circumstances surrounding the making of the contract and of any relevant usage of trade, course of dealing, and course of performance” is relevant in interpreting the government documents. 255 P.2d at 395.

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Texas joins states prohibiting real estate transfer fees

Posted on May 9th, 2012 by Joseph William Singer.
Categories: Real estate transactions, Restraints on alienation, Servitudes.

Texas joined the other states that have passed statutes prohibiting real estate private transfer fees. 2011 Tex. Gen. Laws 211.

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More states prohibit transfer fee covenants

Posted on September 14th, 2011 by Joseph William Singer.
Categories: Consumer protection, Real estate transactions, Restraints on alienation, Servitudes, Title issues.

Idaho, Indiana, Mississippi and Montana have all passed statutes prohibiting enforcement of any transfer fee covenants entered into after the dates the legislation goes into effect. See 2011 Idaho Sess. Laws 107; 2011 Ind. Acts 136; 2010 Miss. Gen. Laws 348; 2011 Mont. Laws 259. Transfer fee covenants are promises inserted in deeds to pay a fee to the original seller of the property any time it is sold in the future. Such fees were abolished in New York State in 1852 in the case of DePeyster v. Michael, 6 N.Y. 467 (1852) as a vestige of feudalism.

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Washington Supreme Court adopts relative hardship doctrine and refuses to order a house removed when it was unwittingly built on land owned by another

Posted on June 2nd, 2011 by Joseph William Singer.
Categories: Easements, Servitudes, Statute of frauds, Trespass.

Defendants unknowingly built their house on land that belonged to the plaintiff who also did not know that the land belonged to him. The mistake was discovered after the house was built and plaintiff sued to eject the trespassers from his land. The Washington Supreme Court denied injunctive relief, adopting the relative hardship doctrine. The court granted plaintiff damages for the value of the land encroached on by his neighbor’s structure but denied plaintiff an injunction ordering the structure removed. Proctor v. Huntington, 238 P.3d 1117 (Wash. 2010).

 

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Private road act authorizing an easement by necessity across neighboring land deemed a taking of property and a violation of the public use requirement

Posted on January 14th, 2011 by Joseph William Singer.
Categories: Servitudes, Takings.

The Pennsylvania Supreme Court ruled, in In re Opening Private Road ex rel. O’Reilly, 5 A.3d 246 (Pa. 2010), that a statute authorizing an owner to construct a road across neighboring property to get to a public road effected an unconstitutional taking of property. Read minority opinion. The court distinguished the common law doctrine of easement by necessity that grants owners rights of way by necessity over remaining land of a common grantor, finding that doctrine to be constitutional. The court further ruled that such a taking was for a private purpose unless the predominant beneficiary of the taking would be the public.

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Increasing regulation of transfer fee covenants

Posted on November 24th, 2010 by Joseph William Singer.
Categories: Estates & future interests, Servitudes.

More and more states are passing statutes prohibiting “transfer fee covenants” which purport to require owners of property to pay a portion of the sales price (or a fixed amount) to the original developer whenever the property is sold. Such provisions were held to be unenforceable restraints on alienation in the 1852 New York Court of Appeals case De Peyster v. Michael, 6 N.Y. 467 (1852), a case that is apparently not well known to those peddling these covenants today. De Peyster involved a “quarter sale” clause that required one-fourth of the sale price to go to the heirs of the van Rensselaer family. The court found the arrangement to be a vestige of feudalism akin to quitrents paid to a lord and held that such property relationships had been outlawed in New York by both statute and common law. Recent statutes prohibiting transfer fee covenants (at least prospectively) were passed in Arizona, Minnesota and Utah. 2010 Ariz. Sess. Laws 40; 2010 Minn. Laws 371; Utah Code § 57-1-46.

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Court affirms that restrictive covenants are not enforceable if held in gross

Posted on October 11th, 2010 by Joseph William Singer.
Categories: Servitudes.

A Washington appeals court has affirmed the traditional rule that the benefit of a covenant cannot be held in gross. In Lakewood Racquet Club, Inc. v. Jensen, 232 P.3d 1147 (Wash. Ct. App. 2010), a donor sold 10 acres of land for use as a tennis, swimming, and squash club and prohibited the land from being used for residential purposes without the consent of the grantor or his heirs. But after all the grantor’s remaining land was sold and the grantor died, the owner of the servient estate sought to build single-family homes on the land. When the heirs of the grantor objected, the servient estate owner sued to have the covenant declared void. Although the trial court held for the heirs, enforcing the covenant, the appeals court reversed on the ground the land should be free for development unless restrictive covenants benefit nearby land. It is unclear whether the court would have come to the same conclusion if the restriction were intended to preserve land for environmental purposes and the benefit of the covenant were held by a nonprofit environmental trust.

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Court reaffirms that appurtenant easements cannot be severed from the dominant estate

Posted on February 12th, 2010 by Joseph William Singer.
Categories: Servitudes.

A court reaffirmed a traditional rule of property law in a little litigated issue, holding that an appurtenant easement attached to a dominant estate and intended to benefit the owner of that land cannot be severed and transfered to someone who is not an owner of property intended to be benefited by the easement. Rosen v. Keeler, 2010 WL 288997  (N.J. Super. Ct. App. Div. 2010). The case is significant because recent changes in real property law have increased the powers of owners to invent new kinds of property rights and to  disentangle the strands in the bundle of rights that goes along with ownership. This ruling reaffirms the traditional view that certain packages of rights must go together and cannot be disaggregated among multiple  owners. See article.

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Designation of land as “park” or “plaza” in recorded plat creates appurtenant easement in neighbors

Posted on September 26th, 2009 by Joseph William Singer.
Categories: Servitudes.

A developer sold properties in a subdivision on the island of Martha’s Vineyard in Massachusetts, after recording a map of the area showing the lots and the streets. Three irregularly-shaped areas that wereabout five times the size of the lots on the map were labeled as”parks” and one was called a “plaza.” Those properties were never developed and remained wooded over the years. The lots were all sold but not in the manner envisioned on the map; many lots were grouped together so that the average parcel is now about the size of the parklots. Fifty years later, an owner of the “plaza” lot sought to sell it to an buyer who wanted to build a single-family home on it. The neighbors sued, arguing that the designation of the property as a plaza meant that they owned an negative easement prohibiting development of the lot for residential purposes and an affirmative easement to use the lot for park purposes. The plaza owner argued that the writing of the word “plaza” on the map was not sufficient to constitute an express oran implied easement limiting the uses to which the property could be put. In addition, the subdivision was created before it was common to create homeowner’s associations, so if the park lots are privately owned but subject to an appurtenant easement in all the neighbors, itis not clear how the parks will be maintained, who would pay for  that maintenance, or how disputes about their use would be resolved. The Appeals Court held that the writing on the map was insufficient to impose an easement on the property but the Supreme Judicial Court reversed.

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Limitations placed on developer’s power to alter covenants

Posted on September 20th, 2009 by Joseph William Singer.
Categories: Servitudes.


The Restatement (Third), §  6.21 provides: “A developer may not exercise a power to amend or modify the declaration in a way that would materially change the character of the development or the burdens on the existing community members unless the declaration fairly apprises purchasers that the power could be used for the kind of change proposed.” In North Country Villas Homeowners Ass’n v. Kokenge, 163 P.3d 1247 (Kan. Ct. App. 2007), the court adopted this Restatement rule, holding that a developer’s power to “amend” the covenants limitingland to single-family or  duplex homes did not include the power to “revoke” them entirely by building four-unit housing.


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Restraints on alienation

Posted on September 20th, 2009 by Joseph William Singer.
Categories: Restraints on alienation, Servitudes.

A Connecticut trial court held a right of first refusal invalid as an unreasonable restraint on alienation when it could be exercised either by the homeowners association or by any individual homeowner when there was no mechanism to determine who could exercise the right if more than one person sought to buy the property. Gilbert v. Beaver Dam Ass’n of Stratford, 2002 Conn. Super. LEXIS 2765 (Super Ct. 2002).

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