Sanborn v. McLean

Brief Fact Summary. A subdivision consists mainly of residential properties. A lot in a subdivision is sold without restrictions and the lot owner attempts to build a gas station on it.

Synopsis of Rule of Law. A reciprocal negative easement is attached to all lands sold in a common development scheme, and even though a restriction is outside of the direct chain of title, subsequent buyers will be deemed to have constructive notice because of their duty to check the title of neighboring lots.

Facts. A subdivision was planned for residential purposes, and the developer sold lots with deeds that limited construction to residences. The developer sold title to lot 86 without residential restrictions, and eventually, the title passed to the McLeans (Defendants). The Sanborns (Plaintiffs) and others in the subdivision used their lots as residences. Defendants began to build a gas station on their lot, and Plaintiffs want to stop them.

Issue. If a restriction is not in the direct chain of title, will a purchaser of real property be bound by the title of neighboring lots in the subdivision?

Held. Yes.
The neighborhood is residential, and the deeds sold by the developer contained residential restrictions. This proves that the developer had a common development plan. Because there was a common plan when the lots were sold, the remaining land became subject to a reciprocal negative easement, so the owner cannot do anything that is forbidden to the owner of the lot sold.
The easement is not personal to the owners, but runs with the land sold and is enforceable on any owner having actual or constructive notice.
Defendant had constructive notice of the negative easement because the nature of the residential neighborhood should have put him on notice that a reciprocal negative easement may have existed. He was under a duty to inquire about restrictions on the neighborhood. Had he done so, he would have found the record limiting the lots to residences.

Discussion. Even if the direct chain of title does not contain restrictions on real property, the character of the surrounding neighborhood will sometimes be sufficient to give notice to a builder of negative easements. The builder will be bound by those easements in the records of his neighbors.