P owns an unimproved lot which was part of a tract subdivided by a common owner in 1923.
All of the lots in the tract are subject to deed restrictions imposed by the original subdivider.
These restrictions include that each lot shall be used solely for single, private residences, and that each residence shall front on a north-south street.
All of the lots in the tract except four have been improved with single family residences.
The area around the tract has changed greatly since 1923.
P's expert testified that the best use of the property would be a commercial building.
D's expert testified that an office building would make the residences in the tract much less desirable as homes.
The trial court determined…
The lot had no value for single family residential purposes but was worth $200k as a business lot.
The use of the use for a business would not have an adverse impact on the market value of the surrounding homes.
Procedural History
Trial court held for P.
CA District COA reversed, remanded.
Issues
When should a court refuse to enforce deed restrictions (equitable servitudes)?
Holding/Rule
A court should refuse to enforce deed restrictions (equitable servitudes) when…
By reason of changed conditions, enforcement of the restrictions would be inequitable and oppressive, and would harass P without benefitting the adjoining owners.
When changed conditions in the neighborhood have rendered the purpose of the restrictions obsolete.
Reasoning
If the original purpose of the covenant can still be realized, it will be enforced even though the unrestricted use of the property would be more profitable to its owner.
Here, the trial court made no findings about the purposes of the restrictions becoming obsolete or whether the enforcement of the restrictions on P's property would benefit Ds.
It seems clear that the purpose was to preserve the tract as a fine residential area by keeping noise, congestion, and traffic out.
While allowing the office building might actually increase the property value of the lots around the building, that is of no import.
The intrusion of an office building might offend the senses of the residents and destroy physical conditions which made their neighborhood a desirable one for them.
The fact that apart from and surrounding the tract some business has grown up, and that the land has become more valuable in consequence, in no manner entitles the landowners to be relieved of the restrictions they have created.
Courts in such cases are not controlled exclusively by money value, but may protect a home.
