The District of Columbia Court of Appeals has rejected a claim that a real covenant prohibiting operation of a nightclub was unreasonable or against public policy. DTLD, LLC v. Power Station Ltd. P’ship, 350 A.3d 1285 (D.C. 2026).
The court explained its position that covenants are “disfavored” as “restrictions on the free use of property.” Id. at 1290. At the same time, they “give rise to reasonable expectations.” Id. Despite the conclusion of a city agency that a nightclub could be operated safely without any “undue impact” on the neighboring properties, the test for finding a covenant to be unreasonable requires courts to defer to the wishes of the covenant creators unless the covenant is irrational or causes harm to the public and neither was the case here.