Restrictive Covenants

House Model Near HOA Rules And Regulations Document

“Who can actually control your property?”

Anybody who owns a home that sits within a Planned Community (HOA’s/Condominium Associations etc.) is all too familiar with the title of this Blog. Thus, here we sit, wondering, ‘who can actually control your property’? Believe it or not, ownership of a home, and rights to control what happens within that home and around that home, are not absolute to the signers of a deed.

Restrictive Covenants are one means with which the control of many facets of your personal home can and will be controlled and monitored by a governing body.

Tennessee has captured a general outline relating to the enforceability of Restrictive Covenants as they relate to real property at §4-21-604. Section (a) states that any restrictive covenants that forbid or restrict the conveyance or transfer of real property and are based on “specified race, color, creed, religion, sex or national origin are void.” Tenn. Code Ann. § 4-21-604(a).

Section (b) goes on to state that the restrictions, as outlined above, are presumptively void with the exception of any restrictions on property held by a religious organization and relating thereto.

Section (c) classifies any violations of the aforementioned parameters as being a “discriminatory practice”.

In Tennessee, restrictive covenants are to be strictly construed and any interpretations shall be “made with consideration of well-established rules of law and construction, the most important of which is that the words used themselves are the ‘primary evidence of meaning’.” Roach v. Bunch, 387 S.W.3d 15, 17 (Tenn. Ct. App. 2012).

Any of the words within restrictive covenants should be given their “usual and ordinary meaning, and if the meaning is reasonable and unambiguous[.]” Roach v. Bunch, 387 S.W.3d 15, 17 (Tenn. Ct. App. 2012). If the meaning of the words is found to be plain and unambiguous the court may “not to resort to the use of parol evidence[.]” Id.

The general rule, as established by the Supreme Court of Tennessee, is “where the owner of a tract of land subdivides it and sells the different lots to separate grantees, and puts in each deed restrictions upon the use of the lot conveyed, in accordance with a general building, improvement, or development plan, such restrictions may be enforced by any grantee against any other grantee.” Ridley v. Haiman, 164 Tenn. 239, 47 S.W.2d 750, 753 (1932).

The appellate court in Schodowski v. Tellico Vill. Prop. Owners Ass'n, Inc. established three elements that must be satisfied, “in order for “a covenant to bind remote grantees in equity, (1) it must ‘touch and concern' the land; (2) the original parties to the covenant must intend that it run with the land and bind remote grantees; and (3) the remote grantee must have had notice of the covenant.” Schodowski v. Tellico Vill. Prop. Owners Ass'n, Inc., No. E201501145COAR3CV, 2016 WL 1627895, at *5 (Tenn. Ct. App. Apr. 22, 2016).

(1) Touch and Concern

While the Tennessee Courts have failed to articulate a bright-line test for “touch and concern” they have generally held “the covenant must be so related to the land as to enhance its value and confer a benefit upon it or, conversely, impose a burden on it.” Id.

Other authority in Tennessee has held that “to touch and concern the land, a covenant must bear upon the use and enjoyment of the land, and must be of the kind that an owner of an estate or interest in land may make because of his or her ownership right.” Schodowski v. Tellico Vill. Prop. Owners Ass'n, Inc., No. E201501145COAR3CV, 2016 WL 1627895, at *5 (Tenn. Ct. App. Apr. 22, 2016).

One court has also contributed the following; “the clearest example of a covenant that “touches and concerns” the land is one which calls for a party to do, or refrain from doing, a physical act on the land.” Id.

(2) Run with the Land

The overall intentions and desires of the declarant should be to bind all current and future owners to the restrictions within the Master Deed or governing document.

(3) Notice of Restrictive Covenants

In the Duke case the court held, “[g]enerally, factual assertions contained in a deed bind the grantor and the grantee.” Duke v. Hopper, 486 S.W.2d 744, 748 (Tenn. Ct. App. 1972). Notice of those restrictions is deemed to exist, minimally, as “constructive notice” upon the signing of your deed.

Even if a restrictive covenant isn’t deemed to be effective, there still exists a possibility of a court finding it to be an Equitable Servitude. See our next post in reference to what is an equitable servitude.

If you, a friend, or a family member, are having any issues in regards to restrictive covenants, or other real property issues, reach out to Wayne M. Bridgham today for a free consult!