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Defendant and Plaintiff’s predecessor in title created a covenant limiting development of Plaintiff’s predecessor’s property to fourteen enumerated uses. Defendant sued to enjoin some of Plaintiff’s space from being used as a dance studio. Plaintiff counterclaimed for declaratory judgment to render the covenant unenforceable due to changes in circumstance.
Courts may limit a restrictive covenant’s duration to a reasonable period of time, if the duration is not specified.
In 1986, MIE Properties, Inc.’s (Plaintiff) predecessor in title and the City of Bowie (Defendant) covenanted that Plaintiff’s predecessor in title would limit the development of its property to fourteen enumerated uses. Additionally, the parties agree that the property in question would be developed into a science and technology, research and office park. In 2001, Plaintiff leased some of its space to a dance studio. In 2002, Defendant sued to enjoin Plaintiff’s space from being used as a dance studio. Plaintiff counterclaimed for declaratory judgment to render the covenant unenforceable due to changes in circumstances that precluded the covenant’s purpose. The trial court ruled in favor of Defendant. The court of appeals reversed, stating that the outcome depended on the “reasonable probability” that the parties can achieve the purpose of the covenant within a reasonable time rather that the “theoretical possibility” that the trial court had considered.
Whether a court may impose a limit on a covenant’s duration if the covenant is silent on the duration.
Yes. The lower court’s ruling is affirmed. Courts may limit a restrictive covenant’s duration to a reasonable period of time, if the duration is not specified.
A court must consider the amount of time elapsed and any changed circumstances during that elapsed time. Here, there has been no radical change in circumstance during the nineteen years since the covenant was put in place.