Property Class Notes 4/16/04


Blevins v. Barry-Lawrence County Association for Retarded Citizens


“NIMBY” – Not In My Backyard!!!  I need it, the community needs it, I think we ought to have it, just don’t locate it near me.  That’s what’s going on in Blevins.  These types of facilities are needed, yet your own selfish interests could make you try to keep the place from being built near you.


What was the covenant here?  It’s a restrictive covenant that says the land must be used for residential purposes only, and no buildings may be erected other than single or double family dwellings.  What do we mean by residential purposes?  The court favors a definition of a place where “people reside or dwell”.  It’s also not used for commercial or business purposes.  It does include apartment buildings, and we think that it includes use as a home for mentally retarded persons.  It’s also a non-profit purpose.  In a way, it’s close to a business.  It’s sort of almost like an educational institution.  But the court doesn’t really discuss that.


The court says that this is a residential purpose.  But is it a single family dwelling?  It’s doesn’t have to be used for a single family residence.  The property must be used for residential purposes, and nothing is to be constructed on the property other than a single or double family dwelling.  All this covenant is doing is regulating what can be built, not what it can be used for.


So if you live in a subdivision with a covenant that says that you can only build a single family residence on it, and then a funeral home moves in and builds a funeral home that is designed like a single-family house.  Does that mean you can build a funeral home in a subdivision where it says that you can only build “single-family dwellings”?  Maybe you can build something that looks like a house and then use it for anything you want.  Braunstein thinks it’s unlikely they would not allow this.  The court would probably say that no matter how much they try to make it look like a house, it doesn’t look like a house.  The court would figure out some way not to let funeral homes in.  But there’s a difference between use requirements and construction requirements.  The court reads the covenant fairly narrowly so it doesn’t have to determine whether the people living in the house are a family.


What if someone works out of their home?  It depends on how specific the restrictive covenant is.


Equitable servitudes versus real covenants


The only difference between the two is that the horizontal privity of estate requirement is replaced with notice when it comes to equitable servitudes.  Otherwise, both kinds of servitudes require: (1) intent to be bound, (2) touch and concern, (3) vertical privity of estate, and (4) formalities.  Except for damages as opposed to injunction, there is no difference anymore between an equitable servitude and a real covenant because notice is a requirement for real covenants as well due to the Recording Acts.


Under the Recording Acts, if someone purchases property without notice of some restriction on the property, the third party purchaser without notice “takes” free of the restriction and is not bound by it.  For example, A and B enter into a restrictive covenant that restricts B’s lot.  If B sells to C, then the burden is binding on C unless C doesn’t have notice of the restriction.  What this means in practice is that subsequent takers must have notice or they won’t be bound.  The real covenant runs without notice, but, because of the Recording Acts the good faith purchaser is protected from them.  So real covenants require horizontal privity and notice; equitable servitudes require just notice.


There are three kinds of notice: (1) actual notice, (2) constructive notice, or (3) inquiry notice.  Actual notice is when someone actually tells you that the land is restricted by some covenant.  Constructive notice is fictional, and what we mean by that is that the information is contained in the public records.  Whether you look at the records or not, you’re deemed to have notice of what’s in there.  The third kind of notice is especially relevant in these kinds of cases: inquiry notice.  If you have notice of certain facts that would make a reasonable person curious, then you’re deemed to know what a reasonable inquiry would reveal.  You have a duty to ask.  When we’re talking about residential subdivisions or office parks where there is an obvious plan of construction, you have a duty to ask whether there are restrictions on building there.


Bishop v. Rueff


What’s the deal here?  There were two neighbors, and one put up a wooden fence (a “spite fence”, Braunstein speculates).  The fence affected the water flow across the property.  Damages are awarded because it is found that the fence was built in such a way as to interfere with the free flow of water.


There was a guy named Imorde who sells one lot to Bishop, and then Imorde sells other lots to someone else.  That person divides up the land into lots of little lots, including one to Rueff.  Does the restriction between Imorde and Bishop apply to Rueff?  The issue becomes whether Rueff had notice of the restrictions.  Note that implied reciprocal servitudes seem to arise “at the drop of a hat” in Kentucky.


What’s wrong with saying that Rueff had notice?  This case is later overruled.  If you want to impose servitudes on lots, you ought to file a plat of subdivision so that the restrictions are in the grantor’s chain of title.  That way, all of the successors will have notice.  In a regular title search, Rueff wouldn’t come across this particular covenant.


Termination of servitudes


There are lots of ways to end servitudes: (1) release, (2) merger, (3) abandonment, (4) estoppel, (5) waiver, (6) unclean hands, and (7) changed conditions.  Estoppel is an equitable doctrine that applies only when you’re seeking an equitable remedy.  It might end equitable servitudes but not real covenants.  Unclean hands is the same: it won’t terminate real covenants.  Unclean hands means that one who is seeking equity must do equity.  If you violate a restrictive covenant, you can’t fairly sue someone else for doing the same thing.  That doesn’t really terminate the servitude, but it means that the particular person suing to enforce the servitude will not be allowed to do it.  The most important is changed conditions.  Changed conditions is important because servitudes can last a very, very long time and it’s quite possible that they will become obsolete and incapable of accomplishing the purpose for which they were intended or that they become impractically expensive.


Some states terminate servitudes by statute.  Others use the doctrine of changed conditions.


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