Posted by: Patricia Salkin | September 7, 2012

MS Supreme Court Finds Nothing in Covenants Restricting Use of Land for Church

Long Meadow is a subdivision of forty-eight lots. The lots were developed in three phases. The first two phases had restrictive covenants that limited development to single-family residential units.  The third phase lots did not have such covenants recorded so the developers added covenants to the deeds as they were sold. Some of the phase three lots had the same restrictions as those from phase one and two, however, at least six deeds in phase three had covenants that defined residential to include churches and schools. The Harlands were looking for land to donate to its church in order for a church to be built. The Harlands agreed to purchase from Long Meadow three lots from phase three that allowed for a church to be built. Residents of the subdivision objected to the church being built, arguing that it was not permitted. The transaction continued despite the objections. A year later the homeowners association prepared a “corrected warranty deed” for the property without the Harlands consent or approval. The Harlands then filed suit in the Chancery Court. Long Meadow asserted the defense of equitable estoppel. A cross claim against the Harlands sought declaratory relief that the covenants from phase one and two applied to phase three. The court ruled in favor of the Harlands and Long Meadow appealed. The Court of Appeals affirmed and the Court granted certiorari.

The Court held that it would not “disturb the findings of the chancellor when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong, clearly erroneous or an erroneous legal standard was applied.” The Court first noted that equitable estoppel should only be “applied on exceptional circumstances and must be based on public policy, fair dealing, good faith, and reasonableness.”

Long Meadow relied on testimony from two landowners that they were given assurances that the subdivision was entirely residential. However, the Court found that the plat for phase three had been filed in 1994, before either of the landowners had purchased land. Therefore, they were on constructive notice that the subdivision was not restricted to single-family residential use.

Long Meadow then turned to two previous decisions by the Court, both of which the Court held distinguishable from the current case. The deed the Harlands received did not prohibit the use of a church and the deed was not burdened by the single-family restriction. Several deeds without the restriction has been issued from 2004-2007.

The Court then turned to the equitable estoppel claim. The Court found that Long Meadow was attempting to estop the Harlands who had made no representations on which the defendants had relied and thus had induced no action on the part of Long Meadow. The Court went on to state that it would not “place restrictions on property in addition to those that the applicable covenants provide.”  The land records affirm that there is nothing preventing a Church from being built on phase three land. Finally, the Court found no exceptional circumstance to grant estoppel as a remedy in this situation.

Long Meadow Homeowner’s Assoc. v Harland, 89 So. 3d 573 (MS 6/17/2012)

The opinion can be accessed at: http://courts.ms.gov/Images/Opinions/CO77680.pdf


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