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Enforcement of Restrictions (Part I of II)

Articles from The Massachusetts Focus

Newsletter of Stewart Title Guaranty Company, Massachusetts Offices
Fall 2002, Volume 1, Number 3

Enforcement of Restrictions
(Part I of II)

by Gary F. Casaly, Special Counsel

Although there's always the question of what activities restrictions may prohibit, the main issue concerning restrictions is their enforceability. But before I get to that point, I want to explore the question of where the conveyancer should look for restrictions in the first place. Everyone would agree that the registry of deeds is a good place to start! But what instruments should the examiner look at? The answer is not as simple as it would seem.

Ordinarily, the examiner searches the "chain of title" to determine what matters affect any particular parcel of land. But what instruments are included in this ephemeral "chain of title"? One would think that the chain of title is the "thread" that is simply followed from A to B to C, and so forth. But under case law when it comes to restrictions the "thread" may have a few unraveled edges that must be accounted for. Under Guillette v. Daly Dry Wall, Inc., 367 Mass., 325 N.E.2d 572 (1975) the Supreme Judicial Court held that if locus is included within land owned by a common grantor and that common grantor conveys other land under his ownership (i.e., nonlocus) to another that the provisions in that deed out, even though the deed is of nonlocus land, must be scrutinized to determine whether locus (still then retained by the common grantor) has thereby been impressed with restrictions. Stated another way, it's necessary to look at all deeds out by the common grantor, even when the deed out is of nonlocus property, to determine whether restrictions have been imposed upon locus. In Guillette the court said, "Lot numbers or other descriptive information, even though included in an index, do not change what is recorded. * * * In such a [recording] system the purchaser cannot be safe if the title examiner ignores any deed given by a grantor in the chain of title during the time he owned the premises in question." The result here is that if the common grantor in conveying nonlocus to another states in that deed out that he agrees to restrict his remaining land (that includes locus) to restrictions then locus will thereby be subjected to those restrictions. So, when it comes to where one must look and what instruments one must look at to determine whether restrictions affect land, the answer goes beyond the conventional "chain of title."

Restrictions in the deeds out that are also reciprocal to the grantor's remaining land impose an additional duty upon the title examiner to look at them, because they satisfy the requirements of the Statute of Frauds (see Houghton v. Rizzo, 361 Mass. 635, 281 N.E.2d 577 (1972)), an element that must be observed in accordance with decisions of the Supreme Judicial Court. This age-old English statute was discussed in Snow v. Van Dam, 291 Mass. 477, 197 N.E. 224 in connection with common schemes. In Snow deeds of other lots included restrictions upon those lots but did not state that the restrictions were likewise imposed upon the grantor's remaining land. The court noted that the existence of a "common scheme" does not impose restrictions on retained land or other lots not specifically restricted, but rather identifies those parcels that are entitled to enforce the restrictions. Where, for example, restrictions are imposed on one lot they are not thereby implied as being imposed upon another lot, for this would violate the Statute of Frauds, the very law that in Houghton permitted the imposition of restrictions. To the contrary, if there is a common scheme, then the owner of the retained lot may be able to enforce the restrictions upon the lot deeded out. The reverse, however, is not the case - the owner of the restricted lot cannot claim that similar restrictions were impliedly imposed on the retained land, unless such imposition was in writing. In this regard, the provisions of G.L.c. 184, §§26, 27 essentially codify the following, that was said in Snow:

What is meant by a "scheme" of this sort? * * * Where a scheme exists, it appears to be the law of England and some American jurisdictions that a grantee subject to restrictions acquires by implication an enforceable right to have the remaining land of the vendor, within the limits of the scheme, bound by similar restrictions. [Citations omitted.] But it was settled in this commonwealth by Sprague v. Kimball, 213 Mass. 380, 100 N.E. 622, that the statute of frauds prevents the enforcement against the vendor, or any purchaser from him, of a lot not expressly restricted, of any implied or oral agreement that the vendor's remaining land shall be bound by restrictions similar to those imposed upon lots conveyed. Only where, as in [recitation of cases] the vendor binds his remaining land by writing, can reciprocity of restrictions between the vendor and the vendee be enforced.

* * * * *

Nevertheless, the existence of a "scheme" continues to be important in Massachusetts for the purpose of determining the land to which the restrictions are appurtenant . . . .

So, although the examiner must look at deeds out to see if they contain reciprocal restrictions or agreements to impose restrictions on retained land, it is not necessary to raise as an issue the imposition of restrictions on locus simply because nonlocus lots in the proximity of locus contained restrictions.

Once we know where to look, the question then becomes what are we looking for? When considering restrictions one must be mindful of what provisions of the instrument are enforceable, the persons and the land against whom and which enforcement may be had, the persons who are entitled to demand enforcement, the remedies that are available in connection with enforcement and the period during which enforcement is permitted.

The statutes provide that for restrictions to be enforceable they must be of "actual and substantial benefit" to the person claiming enforcement. This criterion is so subjective that it's nearly impossible to apply the rule.

Another "formula" used to determine the enforceability of restrictions, which is a little less subjective, revolves around the requirements of "benefited land." Both G.L.c. 184, §§27, 28 use this term in connection with the enforcement of restrictions. That term is defined in G.L.c. 184, §26, and means "land for the benefit of which such restriction is imposed." The definition does not shed much light on the subject of the enforceability of restrictions, but G.L.c. 184, §30 and the decision in Garland v. Rosenshein, 420 Mass. 319, 649 N.E.2d 756 (1995) do. In Garland a party brought an action to determine whether a restriction that had been imposed on his property by the defendant was enforceable under the statute. The plaintiff had purchased the property from the defendant's transferee. At the time the restriction had been imposed the defendant owned no other land in the area. It was decided in Garland that the requirement of the statute was not met, and the restriction was not enforceable because (i) it was determined to be a restraint on alienation (it was overly burdensome) and (ii) the defendant had no property in the area which would benefit from the restriction, therefore rendering the restriction personal in nature and preventing it from running with the land. This latter point was addressed by the court as follows:

Even under traditional common law principles, the restriction fails. The defendant admittedly owns no land which is benefited by the restriction. The only benefit from the restriction is the potential economic gain that the defendant may receive if someone is willing to pay the defendant in order to release the restriction. This benefit is personal, and does not confer a direct physical advantage to any piece of land owned by the defendant. Cases have stated that, where the benefit is personal, the burden of the covenant does not run with the land. See Orenberg v. Johnston, 269 Mass. 312, 316 (1929) ("fact that there is no other land to which the promise concerning the [maintenance of] the clock could be annexed makes it unenforceable either at law or in equity against any successor in title"). But see Middlefield v. Church Mills Knitting Co., 160 Mass. 267, 271?272 (1894). Further, although we have expressed a willingness to reconsider common law rules concerning the creation, validity, and enforcement of servitudes, see Bennett v. Commissioner of Food & Agric., 411 Mass. 1, 7 n.4 (1991), this is not a case where "old common law rules barring the creation and enforcement of easements in gross have no continuing force." Id. at 6 (enforcing servitude in the absence of dominant estate where enforcement consistent with public policy and reasonable).

Although other land may be the subject of the benefit of a restriction, the restriction may not be enforceable if the land is owned by a "stranger" to the instrument creating the restriction. As is true also with easements, it is generally not possible to create rights in restrictions in persons who are not parties to a deed. In Asian American Civic Association v. Chinese Consolidated Benevolent Association of New England, Inc., 43 Mass.App.Ct. 145, 681 N.E.2d 882, further appellate review denied, 426 Mass. 1101, 686 N.E.2d 200 ( 1997) the City of Boston conveyed property to Chinese Consolidated Benevolent Association of New England, Inc. and the deed contained the following language:

The Grantee, for itself, its successors and assigns, agrees to devote the property to the uses specified in its proposal for the purchase of the property dated February 4, 1983, and to use its best efforts to comply with plans and specifications for the renovation prepared by Jung/Brannen Associates and previously submitted to the Grantor.

The "proposal for the purchase of the property" referenced in the language in the deed was a letter dated February 4, 1983, in which the following paragraph appeared:

The [property] will be renovated and converted to a multi-purpose Chinese Community Center that will provided accommodation for the [Asian American Civic Association, Inc.] itself and a variety of social service, employment training and cultural programs and activities.

When Chinese Consolidated Benevolent Association of New England, Inc. leased a portion of the property to a third party The Asian American Civic Association, Inc. brought an action claiming its rights to occupancy pursuant to the letter referenced in the deed. In addition to ruling that the indefinite reference statute (G.L.c. 184, §25) prevented rights from inuring to The Asian American Civic Association, Inc. the court noted that the Association had no rights for another reason:

In seeking to establish rights under the deed from the city to [Chinese Consolidated Benevolent Association of New England, Inc., The Asian American Civic Association, Inc.] suffers from the initial embarrassment of not being a party to it. It remains the general rule in Massachusetts that a possessory right said to inhere in a deed cannot successfully be maintained by a person who is a stranger to the deed. (Citations omitted.) See G.L.c. 184, §27(a), requiring that a person who seeks enforcement of a restriction be a party to the recorded instrument that imposes the restriction.

Regardless of the "benefited land" rule, it's tough to establish whether there is or not such other land involved. It becomes evident, then, that in reviewing restrictions with an eye to determine when they expire or whether they are enforceable one must look to more empirical or objective standards. One such standard revolves around the passage of time. It would seem easy enough to count the number of years that have elapsed and thereby determine whether or not a restriction has expired. But there's even some confusion here in what appear to be (but in fact are not) contradictions in the statutes. For example, would restrictions imposed in 1959 be limited to thirty years or fifty years? One statute (G.L.c. 184, §28) provides that no restriction imposed before 1962 shall be enforceable after fifty years while another statute (G.L.c. 184, §23) states that restrictions unlimited in time shall not be enforceable after thirty years, but this latter statute does not apply to restrictions existing in 1887 and years prior thereto! What statute controls? Then there's the provisions of the statutes that permit restrictions to be extended. Which ones can be extended and for how long will the extension be good? I will explore these questions in "Enforcement of Restrictions (Part II of II)" in our next edition of The Massachusetts Focus.