Common Law Limits to Residential Covenants

"A Common Sense Approach"

At the beginning of private landownership the government took a laissez-faire approach regarding restrictive covenants amongst private landowners, absent restrictions volatile of the Constitution or other applicable law. As the common law has progressed the Courts have continued to demonstrate an aversion to the enforcement private residential covenants. In a recent decision by the New Jersey Appellate Court, Freedman v. Sufrin, No. A-4942-13T1, 2015 WL 7432100, (N.J. Super. Ct. App. Div. Nov. 24, 2015), the continuing judicial scrutiny on residential covenants that are unclear and ambitious was continued. 

In Freedman, the plaintiffs purchased a two-story single family home pursuant to a written contract that made no mention of a restrictive convent. In 1996 the predecessor in title purchased the property and obtained a deed that subjected the conveyance of the property to several restrictions, including retaining “as many trees . . .as possible.” In the subsequent transfer of the title the restrictive covenant was not memorialized; however, the Court presumed that the plaintiffs had knowledge based on previous title searches.

After the plaintiffs took possession of the property they began to remove trees located on the property. As a result of objections by neighbors the plaintiffs commenced a quite-title action in the Chancery Division and were granted summary judgment. The defendants sought to apply the property test devised in Davidson Bros., Inc. v. D. Katz & Sons, Inc., 121 N.J. 196 (1990), which involved covenants prohibiting commercial property in residentially zoned land or restrictive covenants part of a neighborhood scheme. In rejecting the defendants’ arguments, the Appellate Division held that restrictions on the use of private land require strict construction and must be unambiguously clear.  Further, should there exist any ambiguities in covenants all doubts must be resolved in favor of the owner’s unrestricted use of the land. In finding that the present covenant was ambiguous the Court turned to the interpretation of whether the covenant applied after new owners bought the property. The Court held that the covenant only applied to the original purchases of the property where the covenant was included in the deed. Additionally, the requirement that the owners of the property retain “as many trees . . . as possible” had no quantitative meaning and was wholly subjective. Under the common law’s standard of strict construction the Court is limited to looking at the four corners of the document. Unable to define the meaning of “as many trees . . .as possible” the Appellate Division affirmed the granting of summary judgment in favor of the plaintiffs and declared the restriction null and void.

The effect of the Freedman decision will now require any future covenants to provide for explicit and unambiguous language on any restrictions. The Court has reiterated its discontent for restrictions on private landowners absent clear intentions by the parties entering into the agreement to be bound by them. Unlike contract interpretation, Courts may grant summary judgment in favor of nullifying covenants even where there exists material issues of fact regarding the interpretation of restrictions. For that reason, attorneys faced with clients requesting a covenant in their land, it is of utmost importance that any covenants be detailed and be included in all future transfers of property.