Daily Development for Thursday, June 12, 2003
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

future interest from destruction under the Rule Against Perpetuities,
Court will infer the intent of the parties that actions triggering the
creation of an interest in the future must be carried out within a
reasonable time.

Kobrine v. Metzger, No. 1487, 2003 Westlaw  21246038 (5/30/03)

A developer created a seaside subdivision with 56 "for sale" lots  that
included a an additional lot that was to be used for water access for the
other lots in the subdivision.  The Declaration provided, that until all the
lots were sold, the lot and other easement areas would be owned and
maintained by the Developer or its successors, and that each lot owner
was to pay 1/56 of the cost of such maintenance.  When all 56 of the lots
were sold, however, the property was to pass to the owners of the sold
lots as tenants in common, with each lot owner holding a 1/56 undivided

Much later, all the lots were finally sold, after many lots and the
developer's interest and the fee in the access lot had all passed through
several hands.  The lot owners brought suit to require that the covenant
be specifically performed and that they received their cotenancy interests.
Among other things, the current owner of the lot disputed the ownership
claims of the other lot owners because, he argued, the interest over in fee
was void under the Rule Against Perpetuities.

The court had to deal with Maryland precedent - Dorado Limited
Partnership v. Broadneck Development Corp., 317 Md. 148 (1989),
which had held that a contract for the sale of land was void under the
Rule because the option to purchase stated that a the optionee would
purchase the land no later than ninety days after the optionor delivered
proof that the county had granted sewer allocations for the land.  The
county at the time had declared a moratorium on new sewer permits, and
there was no certainty as to when that moratorium would be lifted.  The
Maryland Court of Appeals rejected the notion that it could infer that the
parties intended that the notice be given and the option exercised within a
reasonable period of time because, it held, such a construction is not
possible when the condition precedent to the interest is "beyond the
control of the parties."

In a subsequent case, a lower appellate court had refused to apply
Dorado in a case in which the condition precedent was completion of
water percolation tests and the issuance of building permits.  The court
here maintained that the two cases were distinguishable because, in the
latter case, the carrying out of the percolation tests was within the control
of a party.  It does not discuss whether the same would be true of the
issuance of building permits, apparently assuming that such permits are a
matter of right once satisfactory percolation results are shown (a
conclusion that might be disputed.)  Because the condition was within
the control of a party, the court in this second case had ruled that the
parties intended that the tests be completed and permits issued within a
reasonable time, less than the perpetuities period.

Similarly, the court here ruled that the marketing and selling of the lots
was an action within the control of the developer.  Perhaps recognizing
the weakness of its argument, due to the fact that for a lot to be sold there
must be both a buyer and a seller, so the developer did not in fact control
the sales - the court went on to read the Dorado authority out of the
precedent - stating that it is always an available option for the court to
conclude that the creator of the right intended that it be exercised within
a reasonable time, and certainly within the Perpetuities Period.

     "In addition, we have held that 'the intent of the grantor must be
     ascertained before determining whether the Rule Against
     Perpetuities applies.  We have repeatedly stated that "a contract
     'should be interpreted if feasible to avoid the conclusion that it
     violates the Rule Against Perpetuities . . . under the doctrine that
     a construction should be favored which gives effect to intention
     rather than one which defeats it.' Even if the Rule Against
     Perpetuities might otherwise apply to the agreement to convey
     contained in the Declaration in this case, we believe the
     developer's intention would mandate not applying the rule."
     [citations omitted]

The court, perhaps recognizing that this language basically does away
with the binding precedent expressed in Dorado, where the same
arguments could have been made, comments that this part of the holding
is "subordinate" to its earlier ruling that the condition was within the
control of the parties.

Comment 1: The Rule Against Perpetuities issue is only a small part of
the case, and likely would not justify an appeal to the Maryland Court of
Appeals by itself, so it is very likely that there will be no appeal here.
But if there were, the editor would be very, very interested in seeing how
the court's analysis here fits within the Court of Appeals view of the
precedent.  In the editor's view, both parts of this holding are
inconsistent with the precedent.  A condition that 56 lots be sold to as yet
unidentified strangers places the satisfaction of the condition beyond the
control of the current owner.  Unless the court is willing to say that a
"sham sale" to a controlled buyer would satisfy the condition, it is clear
that in addition to the seller, buyers are needed.  The case is wrong on the

Comment 2: Whether the case is right on the analysis is another question
of course.    It does seem that one might construe most real estate
transfers with provisions potentially triggering application of the rule to
include the implied provision that the interests will not continue beyond
the period of a life in being plus twenty one years.  Except where the
papers clearly create an expectation of remote vesting, such a
construction does seem appropriate, even though we're then left with the
puzzle of exactly what "reasonable" termination point was intended.

Readers are encouraged to respond to or criticize this posting.

Items reported on DIRT and in the ABA publications related to it  are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters.  The same is true of all commentary provided by contributors to the DIRT list.  Accuracy of data provided and opinions expressed  by the DIRT editor the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a
source that is readily accessible by members of
the general public, and should take that fact
into account in evaluating confidentiality


DIRT is an internet discussion group for serious
real estate professionals. Message volume varies,
but commonly runs 5 - 15 messages per work day.

Daily Developments are posted every work day.  To
subscribe, send the message

subscribe Dirt [your name]



To cancel your subscription, send the message
signoff DIRT to the address:


for information on other commands, send the message
Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only
commercial and general real estate matters but also focuses upon residential real estate matters.  Because real estate brokers generally find this service more valuable, it is named “BrokerDIRT.”  But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list.  If you subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as BrokerDIRT carries all DIRT traffic in addition to the residential discussions.

To subscribe to BrokerDIRT, send the message

subscribe BrokerDIRT [your name]



To cancel your subscription to BrokerDIRT, send the message
signoff BrokerDIRT to the address:


DIRT is a service of the American Bar Association
Section on Real Property, Probate & Trust Law and
the University of Missouri, Kansas City, School
of Law.  Daily Developments are copyrighted by
Patrick A. Randolph, Jr., Professor of Law, UMKC
School of Law, but Professor Randolph grants
permission for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided that
no charge is imposed for such distribution and
that appropriate credit is given to Professor
Randolph, DIRT, and its sponsors.

DIRT has a WebPage at:

Members of the ABA Section on Real Property, Probate
and Trust Law or of the National Association of Realtors can subscribe to a quarterly hardcopy report that includes all DIRT Daily Developments, many other cases, and periodic reviews of real estate oriented literature and state legislation by contacting Antonette Smith at (312) 988 5260 or asmith4@staff.abanet.org