Covenants and the courts

Tim provided a link in another thread to a North Carolina case, Steiner v. Windrow Estates, which may be found at
http://caselaw.findlaw.com/nc-court-of-appeals/1574910.html

This case contained a discussion about what a covenant is and how the courts interpret them. While this is a case from NC, I have seen similar thoughts expressed in cases from other states. The text reads:

“The word covenant means a binding agreement or compact benefiting both covenanting parties. Covenants accompanying the purchase of real property are contracts which create private incorporeal rights, meaning non-possessory rights held by the seller, a third-party, or a group of people, to use or limit the use of the purchased property. Judicial enforcement of a covenant will occur as it would in an action for enforcement of any other valid contractual relationship. Thus, judicial enforcement of a restrictive covenant is appropriate at the summary judgment stage unless a material issue of fact exists as to the validity of the contract, the effect of the covenant on the unimpaired enjoyment of the estate, or the existence of a provision that is contrary to the public interest.

“[W]hile the intentions of the parties to restrictive covenants ordinarily control the construction of the covenants, such covenants are not favored by the law, and they will be strictly construed to the end that all ambiguities will be resolved in favor of the unrestrained use of land. The rule of strict construction is grounded in sound considerations of public policy: It is in the best interests of society that the free and unrestricted use and enjoyment of land be encouraged to its fullest extent.

“The law looks with disfavor upon covenants restricting the free use of property. As a consequence, the law declares that nothing can be read into a restrictive covenant enlarging its meaning beyond what its language plainly and unmistakably imports.

“Covenants restricting the use of property are to be strictly construed against limitation on use, and will not be enforced unless clear and unambiguous. This is in accord with general principles of contract law, that the terms of a contract must be sufficiently definite that a court can enforce them. Accordingly, courts will not enforce restrictive covenants that are so vague that they do not provide guidance to the court.Unless the covenants set out a specialized meaning, the language of a restrictive covenant is interpreted by using its ordinary meaning.

“Wein II, LLC v. Porter, 198 N.C.App. 472, 479–80, 683 S.E.2d 707, 712–13 (2009) (emphasis added) (citations, quotation marks, ellipses, and brackets omitted).”

Interesting. Of course we must keep in mind that this is applicable only in NC.

A sentence that particularly caught my eye

"Unless the covenants set out a specialized meaning, the language of a restrictive covenant is interpreted by using its ordinary meaning."

I think this means that if the CC&Rs say "no trucks" it seems to me that means what an ordinary person thinks of as a truck, not what the motor vehicle division defines as a truck.

Also

"courts will not enforce restrictive covenants that are so vague that they do not provide guidance to the court"

This doesn't say that the covenants need to be totally and completely precise, only that they have to be specific enough to "provide guidance."

What would you do about those vehicles that convert from SUV to pick-up? Or those passenger vehicles built on a truck chassis? Is a van a truck? Even though each of us thinks he knows what a truck is no two of us would likely agree on each and every possible vehicle.

The court's point was that the restrictions need to be so precise and unambiguous that ordinary people would not argue over the meaning of the restriction. "No trucks" would not meet that test because we could argue all day over which vehicles are trucks and which are not.

> What would you do about those vehicles that convert from SUV to pick-up? Or those passenger vehicles built on a truck chassis? Is a van a truck? Even though each of us thinks he knows what a truck is no two of us would likely agree on each and every possible vehicle.

You're trying to make fuzzy that which is clear.

The way I read this: if the HOA board decides a particular vehicle is a truck, the courts will not second-guess them if the court agrees that a reasonable person is comfortable with calling it a truck.

> courts will not enforce restrictive covenants that are so vague that they do not provide guidance to the court

This DOESN'T say that absolute precision is required. It says the negative: that if there is "no guidance" then it will not be enforced.

Incidentally- the cited court case makes interesting reading, the question at issue is whether a goat is a pet or livestock.

depends on whether one pets it, milks it, breeds it for sale, or eats it

if one were to eat it the issue would be 'moot'

From my reading of case law, I've learned that a "clear and unambiguous" restriction is enforced by the courts in Florida. So, a "minimum" restriction is enforced by the courts in Florida if it is "clear and unambiguous."

That's my take.