United States: Deed Restrictions: To Be Or Not To Be Specific?

Last Updated: September 23 2016
Article by John L. Grossman

In a very recent case, decided by the Appellate Division on August 15, 2016, the court construed what appeared to be similar deed restrictions in very different fashions. In this case, Welch, et al., v. Chai Center for Living Judaism, et al., consolidated Docket Nos. A-4088-13T1 and A-4163-13T1, two deed restrictions, among others, were placed on a variety of tracts in a subdivision, purporting at first glance to limit the use of the tracts to single-family residences. The case arose from the objections by neighbors to the Chai Center's existing and proposed uses of its lot for religious activities, specifically a house of worship and ancillary activities. The existing activities were conducted from a private residence; the proposed activities were in connection with a 16,000-square-foot house of worship to be constructed on two contiguous lots, one of which currently housed the private residence.

Although other deed restrictions were discussed in this decision, the two primarily at issue read as follows:

The 1899 Restriction

And the said party of the second part do for themselves, their heirs, executors, administrators and assigns, covenant to and with the said party of the first part, its successors and assigns, as follows: That there shall not be erected on said land or any part thereof any brewery, slau[gh]terhouse, glue or chemical factory of any kind; that no business of any kind shall be conducted on these premises, that no beer saloon, garden or cellar or place in which beer, wine or liquors shall be sold or any building in which shall be carried on any business offensive, noxious or detrimental to the use of said land or the adjoining or contiguous land or any part thereof for private residences, nor shall said land be used for any purpose which could create a nuisance and that any houses to be erected on the land thereby conveyed shall cost not less than five thousand dollars each, and that but two dwelling houses shall be erected on the premises hereby conveyed and that such houses shall be used as private and for two families only. [Concerned two tracts]. [Emphasis supplied].

The 1949 Restriction

[The deed at issue was subject to] easements and restrictions of record only insofar as same are now valid and effectual, and the said parties of the second part ... agree with the said parties of the first part ... that the premises hereby conveyed shall be restricted to one private dwelling house for one family with garage appurtenant thereto. [Emphasis supplied].

The Chai Center argued successfully that the 1899 Restriction did not preclude the existing or proposed use of its lot for a house of worship. It argued that, if an entity was not among the list of exclusions, it was not precluded. The lower court, on the Chai Center's motion for summary judgment, found that the provision precluded various business operations, but these limitations did not encompass a house of worship. Moreover, it found that a house of worship was not a business and, thus, was not proscribed by the deed restrictions.

The Appellate Division affirmed, finding that the terms of the 1899 Restriction were ambiguous and could not be found to solely restrict use of the property to a single-family residence. It reasoned that the 1899 Restriction was directed to exclude specified businesses, leaving for conjecture whether the design included all businesses, which doubt defeats certainty and creates ambiguity.

Not so with the 1949 Restriction. Again in the context of a motion for summary judgment, the lower court determined, unlike the 1899 Restriction, that the 1949 Restriction was unambiguous, directly limited the use of the premises, was not incidental to a personal promise between the parties, but rather was intended to run with the land, binding subsequent owners, such as the Chai Center.

The Appellate Division affirmed, this time overruling the Chai Center's argument that unless a use is proscribed, it may be permitted. It found that the 1949 Restriction met the requirements of being manifest and clear, prohibiting all structures, religious or otherwise, which are not private residential dwellings. In so doing, the Appellate Division noted that it did not find the interpretations of the 1899 and 1949 Restrictions incompatible or interdependent.

Separately, and as to the 1949 Restriction, the Chai Center argued that it unconstitutionally prohibited private religious observances within the confines of one's own home. The Appellate Division, in rejecting that argument, reasoned that neither the existing nor proposed use could be characterized as "a few folks gathering at someone's home." The intensity was dissimilar to "the humble residence of [the] minister," as was the subject of review in a previous case. Borrowing a phrase from precedent, the Appellate Division stated, "[N]either at law nor in equity is it written that a license has been granted to religious corporations, by reason of the high purpose of their being, to set covenants at naught."

On the record before the court, the 1899 Restriction was interpreted as not proscribing the Chai Center's existing or proposed uses, but the 1949 Restriction was interpreted to the contrary. Active, rather than passive, language prevailed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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John L. Grossman
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