Servitudes

Recorded covenants can run with lands the grantor does not own if owners of those lands ratify the covenants

/ Real Estate Transactions, Servitudes

The Utah Supreme Court has held that a landowner who recorded covenants on land he did not own were potentially binding on subsequent owners of that land if they engaged in acts that ratified the covenants (for example, by making payments to the homeowners association (HOA)). WDIS, LLC, as Trustee of MDMG Trust, dated Apr. 25, 2016 v. Hi-Country Estates Homeowners Ass’n, Phase II, 2022 UT 17, 2022 WL 1252425 (Utah 2022). Oddly, the grantor who recorded the covenants owned only eight acres out of the 2000 acres that were purported to be limited by those covenants. Ordinarily, one landowner cannot unilaterally impose covenants on owners of neighboring property. But the Utah Supreme Court held that those covenants were not absolutely void but merely voidable because owners could ratify those covenants after acquiring title to their properties. It did not seem to matter to the court whether all the owners derived their …

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No prescriptive easements for light and air

/ Easements, Nuisance, Servitudes

Re-affirming a longstanding common law rule, a Maryland court has held that land use that interferes with a neighbor’s desire for unobstructed light and air neither constitutes a nuisance nor can the neighbor acquire such rights by prescription. Gestamp Wind N. Am., Inc. v. All. Coal, LLC, 2021 WL 3612747 (Md. Ct. Spec. App. 2021). A neighbor whose wind turbines were losing effectiveness because the neighbor was piling coal remains on its property could not get a remedy for the change in wind to run those turbines since the neighbor had a right to use its property without regard to any interference with the neighbor’s light and air.

Covenants can burden future interests, at least where environmental protection is concerned

/ Easements, Environmental Law, Servitudes

A California appellate court interpreted a conveyance to include both a fee simple subject to condition subsequent with a right of entry in the grantor and a conservation easement limiting the property as “natural open space.” While it is not clear the court interpreted the conveyance correctly, it is significant that the court found that an easement (or covenant) can coexist with a right of entry. If structured correctly, such a conveyance would mean that a grantor can both require title to be forfeited to the grantor (or its assignees) if the current possessor violates a conservation condition and can bind the grantor or its assignees who exercise the right of entry with the same condition in the form of an easement or covenant. Canyon Vineyard Estates I, LLC v. DeJoria, 2022 WL 1183373 (Cal. Ct. App. 2022). One might think that the grantor must choose between imposing an easement or …

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Covenants cannot be amended retroactively if this violates homeowners’ legitimate expectations

/ Servitudes

The Arizona Supreme Court has limited the powers of homeowners associations to amend covenants retroactively when those amendments would unfairly surprise buyers who were not on notice of them when they bought their properties. Kalway v. Calabria Ranch HOA, LLC, 506 P.3d 18 (Ariz. 2022). In this case, the homeowners association adopted new restrictions on owners’ abilities to convey or subdivide their lots, restricted the size and number buildings permitted on each lot, and reduced the maximum number of livestock permitted on each lot. The court held that the original declaration must give “sufficient notice of the possibility of a future amendment; that is, amendments must be reasonable and foreseeable.” Thus owners cannot be retroactively forced to join a community club if not put on notice of that possibility in the declaration. Here, most of the amendments created “new affirmative obligations” such as limiting garage space to 40% of the dwelling, …

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Covenants that prohibit all leasing restrictions include short-term rentals

/ Leaseholds, Servitudes

The Texas Supreme Court has held that covenants that prohibit all restrictions on leasing cannot prohibit short term rentals, finding that a lease is still a lease if it only lasts for one day. JBrice Holdings, LLC v. Wilcrest Walk Townhomes Ass’n, Inc., 2022 WL 1194364 (Tex. 2022). In addition, short-term rentals were held not to be “commercial” or “non-residential uses.” The court noted that the covenants provided that they could be retroactively amended through a 75% vote of the owners.

Washington Supreme Court holds racial covenants in public records must be retained but can be marked void

/ Antidiscrimination Law, Servitudes

Construing a state statute, Wash. Stat. §49.60.227, the Washington Supreme Court held that racial covenants cannot be completely excised from public records. The court determined that the statute allowed a court order to be filed with the recorded title voiding the covenant but did not authorize excising the covenant from the public records entirely. This result occurred despite the fact that the statute provided that courts should “strik[e] the void provisions from the public records.” Wash. Stat. §49.60.227(1)(b). The statute did provide that the original record “shall be separately maintained in the county’s records.” This meant that the public title would note the illegality of the limitation but public records would continue to document the historical existence of the covenant. The court explained that “future generations [should] have access to these documents because, although the covenants are morally repugnant, they are part of a documented history of disenfranchisement of a …

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Courts split on whether short term rentals are a nonresidential use

/ Condominiums and Homeowners Associations, Real Estate Transactions, Servitudes

With continued disagreement among courts in the U.S., the Kentucky Supreme Court has weighed in on the side of finding short term rentals of property to be more like hotels than home ownership or residential leasing and so does not qualify as a “residential” use prohibited by a covenant that prohibits nonresidential uses of the land.. Hensley v. Gadd, 560 S.W.3d 516 (Ky. 2018). In contrast, the Arkansas Supreme Court rules that short-term rentals in a residential subdivisin die not violate a restrictive covenant that prohibited commercial uses. Vera Lee Angel Revocable Tr. v. Jim O’Bryant & Kay O’Bryant Joint Revocable Tr., 537 S.W.3d 254 (Ark. 2018).

Nearby changes do not satisfy the changed conditions doctrine so restrictive covenants remain in effect

/ Condominiums and Homeowners Associations, Servitudes

The Alabama Supreme Court has reaffirmed the traditional rule that changes nearby but outside a restricted neighborhood are not sufficient to come within the changed conditions doctrine that would make existing restrictive covenants unenforceable. Capitol Farmers Market, Inc. v. Ingram, 2021 WL 5752352 (Ala. 2021). Covenants remain enforceable unless changes inside the neighborhood subject to the covenants have made it impossible for them to achieve their original purposes. In this case, changes within a mile-one radius of the restricted properties were not enough to conclude that the covenants could not achieve their purposes, especially because properties on several sides were still being used in a manner consistent with the covenants.

Owner of power line easement may install fibre optic cables without exceeding the scope of the easement

/ Easements, Servitudes

In a case applying what appears to be the majority rule, the Seventh Circuit held that an easement for power lines included the right to install lines for other purposes — in this case fibre optic cables. West v. Louisville Gas & Electric Co., 951 F.3d 827 (7th Cir. 2020). The Texas Supreme Court rejected this approach, finding this kind of use to exceed the scope of the original easement, see Marcus Cable Associates v. Krohn, 90 S.W.3d 697, 699 (Tex. 2002), but most courts that have addressed the question have agreed that a right to pass electric lines over property includes the right to pass lines for other purposes, such as cable television. This was true even though the original easement stated in its text that the easement was to place lines “for the transmission, distribution and delivery of electrical energy” — a type of use that does not extend to Internet …

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