Daily Development for
Monday, October 6, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

Note that there are two cases here, both dealing with preserving a desired "tone" in residential developments:

SERVITUDES; COVENANTS; USE RESTRICTIONS; "RESIDENTIAL ONLY:" 3,200 square-foot storage building violates restrictive covenant limiting use of property to "residential purposes" only as it cannot be regarded as an "ancillary use" to a residence even if used only to store personal property.

Tipton v. Bennett, 934 P.2d 203 (Mont. 1997).

Plaintiff - the seller of six lots in a subdivision and an adjoining landowner -brought suit against the purchasers of the six lots after the purchasers erected a 3,200 square-foot storage building on the property. The purchasers stored only personal property in the building and neither constructed, nor planned to construct in the near future, a residence on the property. The property was subject to a restrictive covenant that limited its use to "residential purposes" only and specifically prohibited "business. trade or manufacture" uses. Trial resulted in a judgment for the plaintiffs requiring the purchasers to either remove the structure within six months or place a residence on the property within a year. The purchasers appealed.

The Montana Supreme Court affirmed the trial court's determination that the building violated the residential purposes portion of the covenant. The court rejected the purchasers' argument that the building was akin to a garage, which had been found by the court in an earlier case to be "a proper appurtenance necessary to the enjoyment" of a residence, because of the size and character of the subject building. In addition, the court reversed the portion of the trial court's order allowing the purchasers to maintain the building if they constructed a residence on the property within the next year, holding, based on the trial court's determination that the building was not akin to a garage, that the building would not constitute an appurtenance necessary to the enjoyment of residence even if one were built.

Finally, the court also rejected the purchasers' estoppel argument, holding that, even if the seller did have prior notice of the purchasers' planned construction of the building and had acquiesced in that construction, there was no evidence that the adjoining landowner had any such notice or had acquiesced.

Comment: The notion that a 3,200 square foot storage building for personal property is not an ancillary use to residential activity is not a foregone conclusion, at least to the editor. There are residences and residences. The property in question must have been reasonably large - it consisted of six subdivided lots. If the owners had an auto collection or stored a large boat or wanted to play tennis indoors, a structure of this size would seem quite appropriate.

SERVITUDES; COVENANTS; USE RESTRICTIONS; MOBILE HOMES: Restrictive covenant prohibiting mobile homes and temporary dwellings within subdivision precludes property owners from permanently attaching to their property manufactured home purchased from mobile home dealer and that originally had wheels and axles.

Toavs v. Sayre, 934 P.2d 165 (Mont. 1997).

Owners of property in a subdivision brought suit against two other property owners in the subdivision pursuant to a restrictive covenant applicable to all the parties' properties. The covenant prohibited "temporary shelter [missing words] for dwelling purposes . . . until there is a completed private single family dwelling used in connection therewith" and also prohibited "mobile homes or temporary dwellings . . . used as the sole dwelling on any tract." One of the defendant owners had permanently placed on a concrete foundation a manufactured home that had been purchased at a mobile home dealership, had been towed to the lot on wheels and axles that were originally in place but were removed for attachment to the foundation, and was taxed as personal property. The second defendant owners had placed on their lot a manufactured guest house that was used by the wife's elderly mother. Summary judgment was entered for both defendants and the plaintiffs appealed.

The Montana Supreme Court reversed the first case and found against the property owners, finding that the manufactured home fell within the broad definition of a mobile home under Newman v. Wittner, 917 P.2d 926 (Mont. 1996), despite the fact that the wheels and axles had been removed and the home had been permanently attached to utilities and a concrete foundation.

The court affirmed the judgment in favor of the second property owners, however, based on language in the covenant that a temporary home could not be "the sole dwelling on any tract." Here, because the manufactured home was in addition to the property owners' primary dwelling, the covenant did not prohibit it.

Comment: Note the critical analytic distinction between "temporary dwellings" and "mobile homes." The home in question was not "temporary," but it nevertheless was a "mobile home" within the established Montana definition. Although the definition perhaps is a bit strained, having a solid predictable rule is certainly best here.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Walter at the ABA. (312) 988 5260 or stacywalter@staff.abanet.org Items reported here and in the ABA publications 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. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.