North Carolina Lawyers Weekly
Properties of Southern Wake, LLC v. Fidelity Bank (Lawyers Weekly No. 12-16-1256, 12 pp.) (Linda Stephens, J.) Appealed from Wake County Superior court (Paul C. Ridgeway, J.) N.C. App. Unpub.
Holding: Although the plaintiff-developer’s restrictive covenants required construction to begin within nine months of the purchase of a lot, if a buyer failed to begin construction on time, the only remedy set out in the covenants was the developer’s re-purchase of the lot, at the developer’s option. The developer was not entitled to monetary damages in lieu of re-purchasing defendants’ lots.
We affirm the trial court’s order granting defendants’ motion to dismiss.
The lots at issue were acquired by the defendant-banks after the original purchasers defaulted on their loans. Construction had begun on one lot before the bank acquired it.
The restrictive covenants imposed monetary penalties on a lot owner if construction were not completed within 360 days. The covenants’ definition of “owner” excludes “the mortgage[e], its successors or assigns, unless and until such mortgagee has acquired title pursuant to foreclosure or a proceeding in lieu of foreclosure….” The bank completed construction within 10 weeks of taking title, well within the prescribed 360-day time limit.
Furthermore, we reject the developer’s contention that the restrictive covenants in question run with the land. First, the penalties do not appear to be assessed for the purpose of maintaining property within the subdivision, nor do property owners have a right to use amenities maintained or improved by the penalties imposed. Thus, the subject of the covenant to pay money does not touch and concern the land.
Second, because the defendant-banks did not take title directly from the plaintiff-developer, there is no privity of estate between the party enforcing the covenant and the party against whom the covenant is being enforced. Third, there is no suggestion in the covenants that the original covenanting parties intended the benefits and the burdens of the covenant to run with the land.
Affirmed.
