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29. May the doctor convert her house in the subdivision into a medical office?
There are no governing statutes other than the zoning code. The common law Rule Against Perpetuities is unmodified in the jurisdiction.
Last year, a major new medical center was constructed adjacent to the subdivision. A doctor who owns a house in the subdivision wishes to relocate her medical office to her house. For the first time, the doctor learned of the restrictive covenant in the deed from the man to the developer. The applicable zoning ordinance permits the doctor's intended use. The man, as owner of the five-acre tract, however, objects to the doctor's proposed use of her property.
Although there have been multiple transfers of ownership of each of the 40 lots within the subdivision, none of them included a reference to the quoted provision in the deed from the man to the developer, nor did any deed to a subdivision lot create any new covenants restricting use.
Subsequently, the developer fully developed the 40-acre tract into a residential subdivision consisting of 40 lots with a single-family residence on each lot.
«It is a term and condition of this deed, which shall be a covenant running with the land and binding on all owners, their heirs and assigns, that no use shall be made of the 40-acre tract of land except for residential purposes.»
The deed to the 40-acre tract was promptly recorded. It contained the following language:
Twenty-five years ago, a man who owned a 45-acre tract of land conveyed 40 of the 45 acres to a developer by warranty deed. The man retained the rear five-acre portion of the land and continues to live there in a large farmhouse.
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For intent to be present, the parties must have intended that successors in interest be bound by the terms of the covenant. This intent can be inferred from circumstances surrounding the creation of the covenant or actual language in the conveyance itself. In common law jurisdictions, a purchaser of land that was subject to a covenant takes the land burdened by the covenant. It does not matter whether the purchaser had notice of the covenant prior to purchasing. However, in recording statute jurisdictions, if the covenant is not recorded, a bona fide purchaser who has no notice of the covenant and records his own deed will take possession of the land free of the covenant.
To touch and concern the land, the covenant must have an effect that makes the land itself more useful or valuable to the benefitted party. Performance of the burden must diminish the rights, privileges, or powers of the landowner in order to run.
Finally, horizontal and vertical privity must be present for the covenant to run. Horizontal privity exists when, at the time the promisor entered into the covenant with the promisee, the two shared some interest in the land independent of the covenant. Vertical privity exists when the successor in interest to the covenanting party holds the entire durational interest held by the covenantor at the time the covenant was made.
Both restrictive covenants and zoning ordinances may affect legally permissible uses of land. Both must be complied with, and neither provide an excuse for violating the other. However, they are enforced differently. Covenants can be enforced by nearby property owners at law or in equity. Zoning is not subject to enforcement by private suit; it can only be enforced by local government officials.
B is correct. The restrictive covenant created 25 years ago placed a burden (that the land must be kept residential) on the 40-acre tract of land and gave the right to enforce the covenant to the man, who retained ownership of the benefitted five-acre tract of land. The man may enforce the covenant because he still owns land benefitted by the covenant. The other owners in the subdivision may be able to enforce the covenant; however, the man, as the owner of the originally benefitted five-acre tract of land, may also enforce it.
A is incorrect. Real covenants «run with the land,» so subsequent owners of the property can enforce them or be burdened by them. Because the covenant runs with the land in this question, the man may also enforce the covenant. Therefore, the other owners in the subdivision do not have the sole right to enforce the covenant.
C is incorrect. The Rule Against Perpetuities («RAP») invalidates any interest in property if there is any chance that the interest may vest more than 21 years after some life in being at the creation of the interest. The restrictive covenant is not an interest that is affected by the RAP. The restrictive covenant is still valid, and no facts are stated that indicate it has terminated. The man may enforce the covenant because he owns land benefitted by the covenant.
D is incorrect. The zoning ordinance does allow the doctor's proposed use. The zoning ordinance does not, however, preempt the valid restrictive covenant. The restrictive covenant, as the more restrictive of the two in terms of its limitations, prevails, and the man, as the owner of land benefitted by the covenant, may enforce it.