Daily Development for Wednesday, September 29, 2004
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu
SERVITUDES; RESTRICTIVE COVENANTS; AMENDMENT: Amendment of restrictive covenant
must apply uniformly to all properties affected by the covenant unless approval
of the amendment is unanimous.
Maatta v. Dead River Campers, Inc., 2004 WL 2098466 (Mich App. 9/21/04) http://www.michbar.org/opinions/appeals/2004/092104/24542.pdf
Plaintiffs owned several lots in a subdivision of recreational property. Most of
the lots were developed with campsites or cabins. A provision of the CC&R’s
restricted the lots to “single-family residential purposes and incidental
recreational uses.” For almost 30 years, however, one of the lots had been used
as a public access site, and was equipped with a concrete boat launch ramp, pit
toilets and a parking lot. Apparently this “access lot” belonged to the owners’
association and the other lot owners welcomed the use, although the plaintiffs
had had some bad experiences from the activity on this lot. When the plaintiffs
attempted to get a resolution closing the access lot, the resolution failed in a
shareholder vote.
Plaintiffs then sought to enforce the “single family” restriction against the
lot, but the other owners responded by voting to amend the CC&R’s exempting the
access lot from this restriction. The CC&R’s permitted amendments by a
“supermajority,” (not unanimous) vote. Plaintiff, however, pressed on with its
suit, claiming that an amendment to a restrictive covenant that did not apply
uniformly to all affected lots required a unanimous vote of the owners affected
by the CC&R’s, and that the “supermajority amendment” procedure provided for in
the bylaws could not be used for this type of amendment.
The trial court found in favor of the amendment, but the Michigan Court of
Appeals reversed, concluding that the established precedent (citing numerous
cases from around the country, apparently collected in an ALR annotation)
clearly held that parties holding lots in restricted subdivisions were entitled
to expect that all burdened properties would be treated in the same way.
Otherwise, the court pointed out, 51% of the owners (or whatever majority the
Declaration required) could exempt themselves from any restrictions while
leaving the rest of the owners still bound.
The court noted that the principle remained true even in subdivisions where not
every lot was restricted in the same way. Even in this case, those bound by a
given restriction were entitled to expect that no other lot similarly bound
would get any special favors by vote of the association.
Comment 1: This is a very useful case making an important point. Note that the
trial court had found that the “fairest” resolution here was to permit the
community to continue to use the “public access” lot as it always had,
concluding that, in context, the impact of the activity on the lot was not so
awful as to amount to a nuisance or otherwise violate another covenant
prohibiting “offensive” or “annoying” activities. The case clearly adopts a
“property rights” vs. “communitarian” view of the situation, and in doing so, it
appears to be on solid ground in the precedent.
Comment 2: The editor is somewhat puzzled as to why the defendants did not raise
some sort of waiver notion or even a prescriptive use claim, as the use in
question apparently had been going on since the mid-1970's.
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