Brief Fact Summary. Property owners sought an injunction to prevent Defendant from using a lot under restrictive covenant for business purposes, even though Defendant’s lot is immediately adjacent to business lots which are unrestricted and the character of the neighborhood has changed since the restrictions were formed.
Synopsis of Rule of Law. When a neighborhood is restricted to residential use only, the non-complaint of property owners when churches are built on restricted lots will be considered to not constitute a waiver or abandonment of the restriction, and businesses will still be excluded.
Those equities must be weighed against the equities favoring the lot owners who, having acquired their property on the strength of the restriction, wish to preserve the residential character of the area.View Full Point of Law
Issue. Was the lower court correct in removing Defendant’s lot from the restrictions of the covenant?
Held. The judgment of the trial court is affirmed, but must be amended and the case remanded with instructions to issue an injunction restraining Defendant from using the lot for any business purposes.
The court of equity (lower court) must be guided by certain rules of law in these cases. The lower court may refuse to enforce a restrictive covenant that limits the use to residential purposes when the lot owners have acquiesced in substantial violations of the restrictions, which constitute an abandonment or waiver of the right.
The lower court may also refuse to enforce a restrictive covenant because there has been such a change in conditions in the restricted area or surrounding it that it is no longer possible to secure to a substantial degree the benefits sought under the covenant.
The lower court herein found that the restrictive covenant had not been waived or abandoned. The violations by the churches of the covenant are so trivial a breach that the failure of the lot owners to complain does not operate as a waiver of their right to enforce the covenant against a business or commercial use.
The lower court may not refuse to enforce the restrictive covenant solely on the basis that there has been a change in conditions which has rendered the lot of Defendant unsuitable for residential purposes and that it would be therefore inequitable to enforce the restrictions. The equities of the Defendant are only one side of the case, the harm to the remaining lot owners must be considered.
Discussion. The court did not treat a church as a business venture, and thus it could not find the restriction against ventures waived, abandoned, or even that a change of circumstances occurred.