The Supreme Court of Virginia has held that a declaration that gives owners collective powers to “modify” or “change” covenants in the declaration did not give the owners the right to prevent commercial use by a lot owner that had been expressly permitted to engage in commercial uses under the original declaration. Westrick v. Dorcon Group, LLC, 901 S.E.2d, 468 (Va. 2024).
While the court focused on dictionary definitions of the word “modify,” it also took the traditional (and now receding view) that covenants such be seen as encumbrances on property (rather than as valuable benefits) and thus should be interpreted narrowly to ensure the widest freedom to use land. It also noted that the power to create “exceptions,” or “modifications,” or to “vacate” the restrictions suggested a power to limit the restrictions, not a power to introduce new ones.
There was no homeowner’s association created by the declaration, but 25 of the 30 lot owners filed a document purporting to limit the uses of Lot 5 to residential uses. The Virginia Supreme Court found that they had no power to do that. The power to modify restrictions is not the power to “impos[e] a greater restriction on the free use of property” than was originally imposed.
In the court’s textual interpretation of the original declaration, it noted that ¶1 of the declaration excepted Lot 5 from the restrictions on non-residential uses and that the power to “modify” the covenants” provided for in ¶19 could not give the owners the power to impose an entirely new restriction on a lot that had been expressly exempted from that very restriction.
There was a different provision in ¶19 of the declaration that did the owners to “change” the covenants with a vote of 75% of the owners. The Virginia Supreme Court did not directly address the meaning of the word “change” because it relied on the fact that the amendment of the covenants formally relied on the power of the owners to “modify” rather than the power to “change” the restrictions.
Would it have made a difference if the recorded amendment to the restrictions had relied on the textual power to “change” the restrictions? The answer is not clear but probably not. That is because the court emphasized the general freedom of owners to use their land as they see fit and relied on the traditional notion that any restrictions on land use must be narrowly construed. For that reason it concluded that the entire paragraph 19 was limited by the concept that existing covenants could be “modified” or “terminated” but that “does not permit the [owners to impose] entirely new restrictions” on a lot that had been expressly exempt from them.