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Steiger v. Lenoci

323 N.J. Super. 529, 733 A.2d 1192 (App. Div. 1999)

RESTRICTIONS; EXTINGUISHMENT—Even if evidence is present that a deed restriction has been ignored or abandoned in a limited area of an affected tract, it is not proper to judicially eliminate the restriction for only that limited area.

A 118 single-family residential lot development was established in the late 1920’s. At that time, the developer created various deed restrictions “to run with the land.” Those restrictions prohibited “out buildings of any kind or character” on any lot and required minimum set-back distances. The evident objective of the restrictions was to establish an exclusive residential community. In 1995, one property owner began to construct a “pool cabana” next to an existing in-ground swimming pool. The cabana substantially covered more that 600 square feet, and had a cathedral ceiling, bathroom, refrigerator, dryer, wet bar, and heating system. A neighbor filed suit to restrain completion of the cabana and to compel removal of the partially completed structure. Fifteen of the 118 properties in the development were occupied by ancillary structures, although the cabana in question was clearly the largest. The lower court concluded that because nine of the 19 properties located on the very same block were occupied by ancillary structures, the restrictive covenant prohibiting “outbuildings” had been modified, at least in the immediate area of defendant’s property. It also concluded that the cabana did not constitute a “more intense violation than the storage sheds” located on eight other properties on the block. Further, the lower court stated that the record did not support a finding that “defendants’ pool cabana is a detriment to the plaintiffs or to the neighborhood scheme.” New Jersey law imposes a heavy burden on a party seeking to use past violations to establish an abandonment or modification of a reciprocal restrictive deed covenant. “The violations must be so pervasive as to indicate either a change in the neighborhood or a clear intent on the part of the property owners generally to abandon or modify the original plan.” The Appellate Division held that the record did not show the kind of pervasive violation of the “outbuildings” prohibition needed to demonstrate an abandonment or modification. Prior to the construction of this particular pool cabana, only 15 of 118 properties in the development were occupied by “outbuildings” and 10 of those structures were small storage sheds and another was a doll house. Thus, only 13% of the properties in the development violated the restrictive covenant and most of the violations were minor. The Appellate Division recognized that the lower court implicitly acknowledged that the record would not support a finding of abandonment or modification of the covenant throughout the entire development and therefore limited its findings to “the immediate vicinity of defendants’ property.” However, the Appellate Division found this focus upon one small section of development to be inconsistent with the essential objective of reciprocal deed covenants, which is to maintain a uniform development scheme on all of the subject properties. Two essential features of such covenants are that they must be “universal” and “reciprocal,” and constitute a benefit to all lots that are subject to the burden that is imposed. Consequently, universality of the restrictive covenant and the right of all property owners to enjoy the benefit would be seriously undermined if violations within a small section of the overall development were found to constitute an abandonment or modification in that limited area. Moreover, abandonment or modification of a restriction in one area would be likely to result in an erosion of its effectiveness in immediately adjoining areas. The Court also held that the lower court failed to identify any justifiable basis for concluding that the prohibition had been abandoned in the immediate vicinity of the affected property while remaining in effect in the rest of the development. The only difference the lower court identified between the immediate area and the rest of the development was that the immediate area contained a greater percentage of properties occupied by ancillary structures. Moreover, the Appellate Division held that even if it were appropriate to determine there had been an abandonment or modification of the covenant in the designated small area, there was still an insufficient foundation for a finding of abandonment in that area. There was only one other pool cabana in the general vicinity of the subject property; the other ancillary structures were small storage sheds, each of which was less than one-fifth the size of the cabana in question. Accordingly, the Appellate Division reversed the lower court and remanded the matter for entry of judgment requiring removal of the cabana.

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