Land use covenants and local law collide in Sussex County Delaware

 

By Deborah Goonan, Independent American Communities

The Cape Gazette recently published an article about a land use controversy involving a home-based business. Country Lawn Care & Maintenance LLC, c/o Gerald and Stephania Dougherty, is asking Sussex County to issue a Conditional Use (CU) application so the owners can continue to operate their business on their 4-acre property, as they have for the past three years.

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The Planning and Zoning board voted 2-2 the Doughertys’ application. A deadlocked vote results in denial of the CU permit, but the business owners’ application will soon be placed on Sussex County Council’s agenda for reconsideration.

The lawn care business is located on land that is zoned agricultural-residential (AR-1). The County requires a CU permit to operate the business, since the land is not zoned commercial.

The Doughertys have operated their home-based business on Hollymount Road in Spring Breeze subdivision for three years, and have been in business for 14 years. A previous property owner  ran a lawn care business from the same site for 11 years before the Doughertys purchased the home.

But zoning laws are not the only obstacle for the lawn care business. You see, each of the 4-lots in Spring Breeze are also bound by Covenants, Conditions, & Restrictions (CC&Rs). One of those covenants states that commercial use of properties is prohibited.

Some homeowners in the small 4-home community don’t want County Council to issue the Conditional Use permit. They say doing so would amount to ignoring the CC&Rs that bind property owners.

Shortly after the article about the lawn care business was published, a neighbor, James D. Spellman, wrote a letter to the Editor of Cape Gazette expressing his opinion that Sussex County should deny the CU.

Spellman, who is not an attorney, says that the County cannot erase the covenant against commercial use of private property in Spring Breeze.

Here are links to the article and letter, for the reader’s reference:

Lawncare business fate could hinge on covenants
Family-run business seeking conditional use to keep operation going Cape Gazette, By Ron MacArthur March 5, 2019

Letter: Clarifying the law of covenants
Letter to Editor, Cape Gazette, James D. Spellman March 26, 2019

 

Collision of zoning and CC&Rs

This Sussex County land use issue, still not resolved, highlights the collision between local zoning laws and private land use covenants.

Even if the County feels inclined to grant a CU permit, to allow the Country Lawn Care to continue operating its home based business, the neighbors of Spring Breeze can sue the Doughertys in an attempt to force them to comply with the CC&Rs.

If that happens, and a court decides the covenants are still enforceable, it could force the property owners to shut down their business or to move it to commercially zoned land.

The attorney for the lawn care business claims that Doughertys were not made aware of the CC&Rs prior to purchase. But the previous owner of the property writes, in the comment section of the original article, that she and her real estate agent fully informed the Doughertys of the covenants before they purchased the home.

But let’s set aside that issue for now, so we can look at the Big Picture with regard to burdening property with private covenants.

 

Is a covenant a law?

In his letter of clarification, Spellman states, “Sussex County through its zoning authority has long ago accepted this covenant.  In doing so, the covenant ‘becomes something more than solemn promises: [it] become[s] law,’ as one court has explained. ”

Well, that may be one legal interpretation, but I’s sure it’s not the only one. Too bad the case law is not cited, though.

Like Spellman, I am not an attorney.

But it is my understanding that covenants are not laws. They are private rules, tied to property deeds, which create a special kind of contract that “runs with the land” as property is sold or transferred to a new owner.

Covenants may be enforced by law. But they are not law. Covenants are not written by government. They are created and enforced by private landowners in the civil court system.

In some cases, a homeowners association (HOA) exists to enforce the CC&Rs, either through internal process or by filing a lawsuit against a homeowner, if deemed necessary.

But note that an HOA is not necessary to enforce covenants. Spring Breeze is one of many examples of covenant-controlled communities without an HOA.

 

Covenants are not always legal and enforceable

The HOA industry would have you believe that CC&Rs are always good, and that they somehow make your property more valuable.

But, sometimes CC&Rs can be bad, unconstitutional, unfair, vague, unreasonable, or  unconscionable.

Classic example: Racial, ethnic, and religious restrictions were deemed unenforceable by the courts in 1948, and later outlawed by the Fair Housing/Civil Rights Act of 1968.

So why should every American be forced to accept all CC&Rs at face value, without any recourse or challenge?

 

CC&Rs last too long, and are hard to get rid of

In my opinion, CC&Rs should never last forever, and should always come with a certain expiration date. That way, future owners and residents are free to change the way they use the land and their homes to suit a changing economy and needs of homeowners.

A growing problem in the U.S. is that the industry and a minority of landowners are writing strict covenants, and amending state laws to make sure that CC&Rs last forever.

Even worse, some covenants exist with NO expiration date, and NO written procedure for amending or dissolving them.

That puts an impossible burden on homeowners, who must organize a supermajority (or unanimous) vote to amend or dissolve unpopular or unwanted CC&Rs.

Some say the process should be changed.

What if, say, ten or twenty years after the developer writes CC&Rs, they would automatically expire? At that point, each property owner should be free to abide by them or not. Or perhaps homeowners could organize a vote to keep some, but not all of the original covenants. Then the covenants might actually be “voluntary.”

I have a hunch that, if state or federal law mandated automatic expiration of covenants, allowing voluntary participation after that, most CC&Rs would not be renewed or revived.

 

Zoning and Ordinances vs. Covenants

To the extent that certain CC&Rs exist because there’s a lack of zoning or protective ordinances in place, the local government should create necessary zoning and local ordinances to protect health and safety, and to address prevention of public nuisances.

Zoning laws and local ordinances could offer a more reasonable, consistent, and flexible way to protect property owners and residents from harmful land uses or public nuisances.

For example, Sussex County could require Country Lawn Care to remove debris, gas tanks, or potentially hazardous lawn chemicals from its AR-1 property, but allow other non-disruptive business activities.

On the other hand, when voters start complaining about an unpopular law, local government can change or appeal it, following a public hearing.

Certainly, eliminating unnecessary or unwanted covenants would reduce the number of conflicts with local zoning laws.

 

CC&Rs not essential to property values

To be sure, a few homeowners may fear the loss of their covenants, because they’ve been told by certain members of the homebuilding industry for decades that restrictive covenants protect their property values.

The truth is, research on the industry’s claim is inconclusive. The value of CC&Rs is highly dependent on the age of a community and the nature of the covenants.

CC&Rs that exist purely to regulate personal taste or lifestyle choices tend to be unpopular, mainly because trends, styles, and social values change and evolve with each new generation.

And even with regard to land use, after 20 to 25 years, many covenants are no longer desirable or relevant.

 

CC&Rs – review and legal challenge

When private landowners make decisions about land use in a vacuum, it’s bound to cause trouble in the future.

Current law allows a Declarant (a developer or home builder) the freedom to amend or remove covenants at any time, without input, while s/he is actively building and selling homes.

By contrast, homeowners have to get a supermajority of their neighbors to agree on even small changes to the CC&Rs.

Talk about a double standard!

That’s why I believe that all CC&Rs should be subject to government review prior to being filed as “official” records that bind property owners.

In addition, covenants should be subject to periodic review — say every 2 or 3 years — after lots / units start conveying to buyers.

If Americans can challenge the validity of Ordinances/Zoning and laws, leading to their amendment or repeal, why not CC&Rs? A proper legal review would protect property owners and housing consumers other than real estate developers and home builders — the vast majority of taxpaying constituents in America.

 

References:

CC&R Basics

Is there any way to get out of a restrictive covenant? (Matt Sailor, How Stuff Works)

Restrictive covenant WRITTEN BY: Susan French, Britannica