Daily Development for
Tuesday, November 14, 2000
By: Patrick A. Randolph,
Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu
SUBDIVISIONS; LOT
SPLITTING: After a residential subdivision is partially built with homes, a
developer may further split lots filed of record, so long as no express,
recorded covenant against lot splitting exists.
Forrest Construction, Inc.
v. Milam, et al., 20 S.W.3d 440 (Ark. Ct. App. 2000)
Here, the Arkansas Court
of Appeals reversed the lower court's holding and ruled in favor of a
residential subdivision developer who replatted the instant subdivision,
carving a number of smaller lots out of several large lots filed of record on
the original plat. Many of the developer's subsequent splits were multiple
splits - in one case eight lots were carved from one. The lot splitting angered
many of the purchasers who had relied upon the size of the lots set forth in
the plat at the time of their purchases.
The Court found, however,
that the homeowners' reliance was misplaced.
The Court looked to (i)
black letter conveyancing law which states that no restriction on subdividing
lots is implied by the filing of a subdivision plat, and (ii) Arkansas
precedent holding that the filing of a general plan of development does not
create a restrictive covenant. The developer had filed such a general plan of
development shortly after the filing of the original plat, which provided that
the lots must be used for residential purposes and provided for minimum home
sizes. As no restriction against lot splitting was included in the plan,
developer was able to prevail.
At further issue were the
developer's advertisements that the lots in the subdivision were "estate
sized". The Court remarked that
developer's "estate sized" lot advertisements created no restriction
or basis for the homeowners' claims, as the lots sold to the first purchasers
did fit that description, and the statement did not constitute a warranty or
covenant with respect to the balance of the lots.
Finally, the lot owners
argued that a provision in the CC&R's that the lots would be used for
"residential purposes only" required that the lots be left in their
original size, with one residence per lot. The court, emphasizing that use
restrictions in Arkansas are to be read narrowly, concluded that the
restriction did not prohibit resubdividing the lots.
Comment: Although not at
issue here, consider what might have occurred had the subdivision provided for
authority by the lot owners to vote to either revise the restrictions or make
other decisions binding upon other homeowners on the basis of "one lot,
one vote." The resubdivision obviously dilutes substantially the original
voting power of the original lot owners, and in fact may return to the
developer control over the future of the subdivision.
Some recent decisions
reported here have held that a lot owner vote could alter the basic character
of the subdivision restrictions, changing them from use restrictions to a
complete, assessment empowered "lot owner democracy." Where do we go
from here?
But in the instant case,
there is no mention of lot owner voting. On the point in the case, the editor
concurs that the lot owners were outflanked. To deny resubdivision to the
developer would, by extension, restrict the rights of any of the developer's
successors in the large lots. There was no express restriction on
resubdivision, and the simple advertisement that the lots were "estate
sized" does not impose on all the lot owners an implied restriction that
they cannot alter the size of the lots in conformance to law.
Readers are urged to respond, comment, and argue with the daily
development or the editor's comments about it.
Items in the Daily Development section generally are extracted from the
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