Posted by: Patricia Salkin | August 25, 2009

Licensed Home Occupation/Daycare Violates Restrictive Covenant

Plaintiffs and defendants are next door neighbors in Parkview South Second Addition in Fargo, North Dakota. Their homes are subject to a “Declaration of Restrictive Covenants and Reservation of Public Utility Easements.”  Since purchasing their property in 2001, defendants have operated a licensed day care in their home. In June 2008, plaintiffs sued to enjoin them from operating the day care and claimed the use was prohibited by the language in the restrictive covenant. The covenant stated that the property “shall be used for single family residential purposes only.” The district court granted defendants summary judgment holding that the covenant did not preclude them from operating the day care. The issue on appeal is whether defendants’ licensed day care in their home violates the covenant.   

The Supreme Court of North Dakota reversed and remanded the district court’s decision and held that the defendants’ licensed day care business in their home violates the language of the restrictive covenant. While ruling that the plain meaning of “residential purposes only” permits a wide variety of uses incidental to residential purposes, the court ultimately concluded that an incidental business use does not violate a covenant for residential purposes only as long as the business use is causal, infrequent or unobtrusive. Defendants’ use of the property is more than an incidental use and as such, violates the language of the restrictive covenant.

Hill v. Lindner, 2009 WL 2025642 (N.D. 7/14/2009).

The opinion can be accessed at: http://www.ndcourts.com/court/opinions/20080334.htm


Responses

  1. I would agree with the court in this case in concluding that the home day care violated the restrictive covenant which stated that this area was zoned for residential purposes only. I would also agree that the usual, ordinary and incidental use of property as a business does not violate a covenant restricting use of the property to residential purposes only, but that an unusual and extraordinary use may constitute a violation. Running a home day care facility violates the covenant since the business use is not casual, infrequent or unobtrusive. Running a day care facility requires licensing from the state, it may be annoying to neighbors who will likely hear alot of noise from all of the children who attend the day care, there would be additional cars and traffic when parents are picking-up and dropping their kids off everyday and this may cause parking problems on the street. If there is a playground outside this may also be a nuisance to the neighbors. I would agree that the Lindners’ use of the property for a licensed day care facility in their home is more than a incidental use of their home.


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