Daily Development for
Friday, April 17, 1998

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

SERVITUDES; RESTRICTIVE COVENANTS; COMMON SCHEME: When grantor delivers deeds to the first thirty lots in a subdivision with uniform restrictive covenants stating that they are for the "mutual benefit of all persons who have derived or shall derive title . . . from the Grantor," and confers enforcement rights on individual lot owners, this act creates a common scheme of development enforceable against subsequent grantees whose deeds permitted Grantor to revoke the covenants, even where Grantor has in fact revoked the covenants as to those late conveyed properties.

Mannweiler v. LaFlamme, 700 A.2d 57 (Conn. App. Ct. 1997) app denied, 702 A.2d 641.

Grantor subdivided property and sold 30 lots in the late 1920's. All of them contained identical restrictions residential only, one house per lot, minimum $15,000 cost per lot. In 1934, perhaps because of the Great Depression, all of the existing lot owners and the grantor modified all of the covenants to reduce the minimum construction cost to $10,000 per lot, but retained the other restrictions. Later, in 1937, the grantor transferred to Dibble a number of lots restricted, but subject to a provision that he could unilaterally revoke the restrictions, and in 1946 the Grantor transferred to Dibble the balance of the lots he still owned, and revoked the original restrictions and replaced them with some modifying the "one house per lot" restriction.

Later, plaintiff, successor owners of other lots in the subdivision, claim that defendant, Dibble's successor, planned to build in violation of the "one house per lot" restriction.

Held: Even though Grantor never expressly promised to be bound by the covenants, but only conferred enforcement rights to the covenants as they then existed, and even though Grantor never expressly bound defendant's lot to the original covenants, Grantor created a common scheme that bound Dibble to the original covenants as surely as if they had appeared in Dibble's deed.

Comment 1: This case is about the proving of a common scheme. It does not appear to be about notice, as the deeds to the defendant's parcels contained references to the deeds to other parcels that created the alleged scheme. Therefore, although the deeds purported to revoke the prior scheme, they nevertheless informed the defendants about it.

Comment 2: The editor, in a prior DD (March 4 of this year), criticized an Ohio case for inferring notice of a subdivision common scheme merely from development consistent with that scheme. This case does not go that far, as indicated above. It simply infers the existence of a mutually agreed common plan from a recorded statement that burdened lots have a right to enforce covenants against other subdivision lots transferred by the Grantor.

Although this approach superficially makes sense, it does create some problems where in fact the Grantor never had such a scheme in mind and subsequently transferred large number of lots without covenants or, as here, with different covenants than those that were used in the original transfer. Who has the burden to show that the Grantor in fact intended that the identical covenants would bind all the lots? Shouldn't there at least be some concrete evidence of that intent in the language of the original covenants?

There was some evidence in this case that the Grantor did have the intent to bind all the lots, as he did impose the burden on Dibble, albeit reserving the right to revoke the restrictions, and as Grantor imposed something close to the original restrictions on other subsequently conveyed lots. But those actions do not necessarily establish that Grantor simply intended to permit the existing lot owners to enforce the existing covenants and any other covenants that the Grantor, in its discretion, imposed on other lots. Certainly, had the original grantees been well represented, they would have insisted that the statement of the covenants say categorically that a common scheme was being created binding all lots.

Comment 3: Where subdivision restrictions are done in an imcomplete, amateurish fashion, what is the role of the courts? Is it to patch things up, notwithstanding some impact on parties not precisely bound? Or is it to let the chips fall where they may giving incentive to future home buyers and developers to be more careful and more express? The judicial tradition in this area is to look for a workable common scheme and impose it. This is consistent with the rubric that "judges live in single family restricted subdivisions, and like it that way." But as common schemes become more and more detailed and intrusive, courts may not treat them in such a favored fashion.

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 16, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Woodward at the ABA. (312) 988 5260 or woodwars@staff.abanet.org

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