Daily Development for Thursday, May 20, 1999

 

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

 

Note that there are two aspects to this case, discussed in separate items below. The second item, dealing with a density restriction, is "on the nose" with a discussion on DIRT about three weeks ago. 

 

SERVITUDES; IMPLIED; SUBDIVISIONS:  Although recorded documents might raise a presumption that a particular property is burdened and benefited by a common development scheme described therein, what is implied must give way to what is actually expressed in the documents. 

 

Mikolasko v. Schovee, 720 A.2d 1214 (Md.App. 1998).

 

A developer recorded a revision plat for a residential subdivision and also recorded a Declaration of Covenants, Easements, Conditions and Restrictions ("Declaration").  The Declaration prohibited the construction of more than one residence for each lot.   The Declaration contained: a statement that it was to be deemed as part of the general scheme of the development; a description of the land use restrictions and covenants be applied to the subdivision; and, in an attached exhibit, a description of the property to be covered by the Declaration. 

 

The property described included 29 lots, but lot 7 was not among them.  The lots covered by the restrictions ranged in size from three to six acres.  Lot 7 was a fifty-acre parcel retained by the developer. 

 

Later, the developer submitted a resubdivsion scheme in which lot 7 and another lot were included as subject to the declaration, but provided that lot 7 could be resubdivided into nine one acre building lots and the balance of the lot as conservation easement.  Seven couples who purchased lots in the original subdivision filed suit objecting to the subdivision plans.  The gravamen of the complaints was that lot 7 was subject to the covenants and restrictions contained in the Declaration by means of an implied negative reciprocal easement, and that therefore lot 7 could not be resubdivided into multiple building parcels.

 

The doctrine of   implied negative reciprocal easements is based upon a finding of a uniform or common or general plan or scheme of development.  Essentially, it imposes common restrictions on subject properties where there appears to be an intention of the grantor that the restrictions be part of such a scheme or plan and for which the scheme or plan should affect the land granted and any land retained by the grantee alike. 

 

These restrictions are enforced in equity.  The court notes here that the covenants creating such restrictions are to be construed strictly in favor of the freedom of the land and against the person in whose favor they are made, and the burden is upon one seeking to enforce such restrictions where they are not specifically expressed in the deed conveying the subject property.  The proponent must show by clear and satisfactory proof that the common grantor intended that the restrictions should affect the land retained as part of the uniform general scheme of development.  

 

 

The trial court held that the servitudes existed as to Lot 7, for the following reasons:  (1) its inclusion on the community plat and its meeting the basic acreage requirements of the community; (2) its frontage being nearly identical to the other lots; (3) representations made by the developer and its agents in the inclusion of Lot 7 in the community; and (4) advertisements posted in the locale of the community as well as maps and other promotional materials, which showed the community demarcated by a bold, black line which included the lot in question. 

 

On the other hand, there was no question that Lot 7 was expressly not covered by the Declaration. Therefore, the question became: "what is the relationship between a common development scheme and a Declaration?"  The lower court say the Declaration as merely a piece of evidence as to the existence in extent in the common development scheme, yet the lower court, in making the subject lot subject to the covenants and restrictions set forth in the Declaration extended the burdens of the common scheme beyond the properties expressly outlined in the Declaration. 

 

The Appellate Court disagreed with this approach.  The Appellate Court ruled, however, that the more crucial questions was whether Lot 7 was part of the development for which the general scheme was established.  Although a matter of first impression in Maryland, the Appellate Court followed what thought to be the unanimous view of courts of other jurisdictions that have reached the issue, citing a number of cases apparently reported in the new Restatement of Servitudes.

 

In the Appellate Court's view,  when a common development scheme or subdivision is established by a recorded document setting forth restrictions upon the property, and the  document also describes the property to be included, the presumption is raised that only the property described will be included in and thus burden and benefitted by the restrictions of, the common development scheme.  Simply speaking, "what is implied must give way to what is actually expressed." 

 

Comment 1:

It is difficult to argue with the logic of the case if one views the creation of a declaration of conditions, covenants and restrictions as a normal contractual agreement. In such cases, the specific controls over the implied. Further, in this case, there was quite a bit of evidence mustered by the appeals court in support of its conclusion that the various lot owners should have know that lot 7 was not subject to the scheme.

 

But in many cases lot owners do assume that covenants which they are required to accept and which appear designed to implement an integral subdivision scheme will also be imposed upon other lots owned by the developer and naturally a part of that scheme.  Where there is little evidence that other lot owners actually were told that the developer has left himself out, there is an argument for intervention by the courts to force the developer to live with his implied promises. 

 

The argument may be different, of course, if the developer has sold his remaining land to another.  The new purchaser ought to be able to rely upon the specific language of the instruments.  But in this case, the developer had not sold the land, and consequently the court should have looked to the probable intent of the parties.  The trial court's review of all the elements relevant to that intent seems more appropriate than a narrow focus on the written instruments in cases like this.  But, as stated, such an expanded analysis might not have altered the result. 

 

SERVITUDES; RESTRICTIVE COVENANTS; DENSITY RESTRICTIONS: Statement in declaration that owners can build only one residence per lot applies to lots as they are originally sized in the subdivision that existed at the time of the Declaration, and a lot owner cannot later resubdivide a lot in accordance with otherwise applicable public regulation and build residences on each of the lots thus created. 

 

Mikolasko v. Schovee, 720 A.2d 1214 (Md.App. 1998), discussed further under the heading: "Servitudes; Implied; Subdivisions."

 

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 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 Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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