A Scottish legend and an open question: When can SC landowners change the “10 year” covenants? – Real Estate and Construction
United States: A Scottish legend and an open question: When can SC landowners change the â10 yearâ covenants?
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According to the myth, it is in the Scottish Highlands a village untouched by reality or time. Immortalized by the 1940s Broadway musical and later by the Gene Kelly film of the same name, here is Brigadoon, an enchanted place that emerges from the haze and becomes visible and visitable to outsiders one day every hundred years. After these 24 hours, it fades, inaccessible until the next centenary.
Here in a different kind of highland – the upstate – I recently ran into a real estate problem that immediately reminded me of Brigadoon. The question was about the catch-all amendment language in a registered set of commitments, conditions and restrictions (CCRs). I imagine most of us in the dirt law world have seen a variation of the below model language when reviewing CCRs (and I have underlined the key phrase):
These commitments must apply to the land and will bind all said parties and all parties claiming them until January 1, 1975, the date on which said commitments will be automatically extended for successive ten-year periods unless by a vote of the majority of the owners of the said lots as indicated on the said card and it is thus agreed to modify the said commitment in whole or in part.
At first glance, there doesn’t seem to be anything strange about the language. Covenants continue until a fixed date, then renew automatically in ten-year intervals until amended. What does this have to do with the old Scottish tale?
The question asked in this article arose by searching for exactly when parties to RACs (either original landowners or successors to title) can effectively amend these documents. In courts across the country, two opposing positions have emerged: (1) that the ten-year period is just a placeholder with no discernible significance, and that any amendment by landowners takes effect immediately after execution. , and (2) that the language limit changes to take effect only when the next ten-year interval emerges from the haze. According to the second interpretation, for example, if the parties to the RACs execute a rider on March 31, 2021, but the next ten-year anniversary of the covenants is January 1, 2030, then the amendment does not come into effect until 2030 anniversary.
Obviously, the second interpretation throws a major monkey wrench into the plans of landowners if they wish to change restrictive covenants to facilitate an authorized development, sale, or new use. Hoping to find a quick and clear answer, I walked over to the source of all knowledge: Westlaw.
Much to my regret, and as is too often the result, there was little material from South Carolina on the subject. As far as I know, this would be a first impression case in South Carolina. But the question remains: Looking at similar cases in other states, what would be the most likely outcome of a ten-year restrictive covenant litigation here in Palmetto state? And what can we learn from other states’ results and apply that knowledge to how we approach and write CBIs in our practices?
Read on for the full article in the July issue of SC Avocat Magazine.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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