Real Property –Restrictive Covenants – Common Scheme – Undivided Parcels – Change of Character – Waiver

Although a developer only subdivided – and placed restrictive covenants on – part of her property, there was nevertheless a common scheme of development within the subdivision.

We affirm the trial court’s order concluding that the restrictive covenants remain enforceable.

Common Scheme

Restrictions imposed under a general plan of development may be enforced against subsequent purchasers of the land who take with notice of the restriction. The test for determining whether a general plan of development exists is whether substantially common restrictions apply to all similarly situated lots.

Restrictions need not be imposed upon every lot in a subdivision in order to demonstrate a general scheme of development. However, a general development scheme will not be recognized where a substantial proportion of lots lack similar restrictive covenants.

In 1953, Katherine Melton recorded a map (the Melton Map) showing a total of seven lots. Lots 1-5 were all conveyed between 1953 and 1956 and were each subject to identical restrictive covenants prohibiting the subdivision of those lots.

Lot 6, which contained Melton’s home, was not subject to any restrictive covenants either at the time the Melton Map was recorded or when Melton sold Lot 6 in 1963. Lot 7, which consisted of a large undeveloped tract of land, was similarly unencumbered by covenants at the time Lots 1-5 were conveyed. However, Melton later subdivided Lot 7 into three small parcels and sold them between 1960 and 1964 subject to the same restrictions prohibiting subdivision as Lots 1-5.

This case is controlled by Rice v. Coholan, 205 N.C. App. 103, 695 S.E.2d 484, disc. review denied, 365 N.C. 435, 702 S.E.2d 303 (2010), in which a general plan of development was found to exist where only 14 out of 18 total lots in a subdivision “contained the same or similar restrictions.” As in this case, the four unrestricted lots were retained by the family that initially owned the entire tract.

The trial court did not err in determining that a general plan of development existed for the Melton Map properties.

Abandonment of Intent & Waiver

Otherwise valid restrictive covenants may be terminated when changes within the covenanted area are so radical as practically to destroy the essential objects and purposes of the agreement. However, violations of restrictive covenants must be substantial in order to constitute the type of radical change sufficient to render the covenants unenforceable.

In 1977, the owner of Lot 1 deeded a narrow strip of land (0.199 acres) to a neighbor adjacent to the subdivision so that neighbor would have enough land to build a driveway. Although this was a technical violation of the restriction against subdivision, it had little to no impact on the character of the neighborhood.

Melton’s sale of Lot 6 – which was then subdivided into three smaller parcels intended for residential use – and her later subdivision of Lot 7 – which subdivided lots were conveyed subject to restrictive covenants prohibiting their subdivision identical to those applicable to Lots 1-5 – did not constitute radical changes to the scheme of development. If anything, these changes arguably served to reinforce the original purpose of Melton’s scheme of development.

Under these circumstances, plaintiff has failed to show either changes which would invalidate the restriction against subdivision or a waiver of the right to enforce the restriction.

Affirmed.

Dill v. Loiseau (Lawyers Weekly No. 011-004-19, 13 pp.) (Mark Davis, J.) Appealed from Mecklenburg County Superior Court (Forrest Bridges, J.) Kenneth Davies and G. Brian Ernst for plaintiff; Louis Spencer and Ryan Hoffman for defendants. N.C. App.