AGENDA #5a
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
Ralph D. Karpinos, Town Attorney
SUBJECT: Response to Council Petition regarding Orange Community Housing and Land Trust Quarterly Report: Discussion of Private Restrictive Covenants
DATE: October 8, 2003
On September 8, the Town Council received a Quarterly Report from the Orange Community Housing and Land Trust. During discussion of that report, a Council member reported on conversations about private restrictive covenants that had been put in place by a developer of affordable housing. The Council asked the Manager and Attorney for comments about this issue.
LARKSPUR SUBDIVISION
The development discussed by the Council on September 8 was Larkspur Subdivision, a development recently approved by the Town Council. Part of the approval was the Council’s acceptance of an offer made by the applicant, to guarantee that 15% of the dwellings that are built in Larkspur would be made available for sale at a price that is affordable to families with incomes at or below 80% of the area,s median income.
A Council member reported that the Larkspur developer had informed the Orange Community Housing and Land Trust (organization with responsibility for selling the affordable dwellings) that, in response to the prospect of a family with many children buying one of the houses, amended restrictive covenants were being put in place for the subdivision. Among the restrictions would be limits on toys that could be left in front yards. The Council asked the Manager and Attorney for comments about whether or not the Council could put limits on private restrictive covenants.
GOVERNMENTAL LAND USE REGULATIONS VS. PRIVATE COVENANTS
Local governments regulate land use through zoning and subdivision regulations, as authorized by North Carolina General Statutes. Restrictive covenants are private agreements made between private parties, typically taking the form of additional limitations on use of property. David Owens of the UNC School of Government writes, in his book “Introduction to Zoning,” the following summary:
In addition to land use restrictions imposed by government, private agreements such as restrictive covenants or deed restrictions can limit how land is used. . . . Such covenants are often more strict than local zoning requirements. . . . The enforcement of restrictive covenants is a private matter and the zoning officer is not involved. . . . the government only enforces the ordinance requirement and the private owners enforce the covenant requirements.
Another summary, from Rathkopf’s The Law of Zoning and Planning describes the relationship between zoning and covenants this way:
Zoning restrictions and restrictions imposed by private covenants are independent controls upon the use of land, the one imposed by the municipality for the public welfare, the other privately imposed for private benefit.
Both zoning restrictions and covenant provisions can be enforced (zoning by a municipality, covenants by legal action of other parties to the private agreement to limit use of property). The Town of Chapel Hill has not, except for one unique provision described below, ever attempted to influence, regulate, or enforce private restrictive covenants. In fact, it is very possible that private agreements between property owners could be put in place and the Town would not have means or opportunity to even know that the agreement exists.
A general rule is that a property needs to comply with all rules that are applicable, whether public or private rules. In the case of conflict, we have historically argued that the public zoning rules are paramount and cannot be overridden by a private agreement between or among property owners.
PUBLIC REGULATION OF PRIVATE COVENANTS
During the Council’s discussion on September 8, a question was raised about whether or not the Town Council could limit what provisions are placed in private restrictive covenants. We believe that public regulation of private agreements is problematic for several reasons. First, there is no assurance or requirement that the Town know about or be informed when private agreements are executed. Second, any attempt to restrict private covenants by a zoning ordinance or conditions of approval of an application would have to be based on statutory authority. For example: If a condition were imposed as part of the Town Council’s approval of a subdivision, the authority for that condition would need to come from subdivision law contained in General Statutes. Depending on what kind of limitation were to be proposed, it may be difficult to find justification for the limitation in State law.
EXCEPTION: TOWN LIMITATION ON COVENANTS RELATED TO SOLAR COLLECTORS
There is one exception in the Land Use Management Ordinance to the rule that suggests no public limitations on private restrictive covenants. Section 4.6.7(d) states:
Subdivisions shall not include covenants or other conditions of sale that restrict or prohibit the use, installation or maintenance of solar collection devices.
This language was carried over to the new Land Use Management Ordinance when that successor document was enacted in January, 2003. We believe that this language reflects the policies and objectives of the Town Council, but acknowledge that the provision could be difficult or impossible to enforce, particularly in the instance of such a covenant being put in place without the knowledge of the Town.
DISCUSSION
We attach here excerpts from the two documents that we quote from, above. After review of these writings, and based on our experience in managing the development of subdivisions, we believe that local government should not attempt to regulate the execution of private agreements between/among private parties. We note that there are two other areas of law that could become important if a private party considers restrictive covenants to be excessive or inappropriate. One is the area of law (State and federal) addressing discriminatory practices. A provision in a set of restrictive covenants that violates anti-discrimination laws would be subject to challenge. The second is concept established in case law that a private party who is aggrieved by provisions of a private agreement may seek relief through the courts from such provision. Neither of these approaches involves municipal government.
The Town Council could influence what provisions are or are not included in restrictive covenants by asking an applicant to agree to allow the Council to review and approve the covenants prior to recordation. The Council lacks the authority to impose a condition of this kind.
Regarding the Larkspur Subdivision and the language that raised these issues, we attach the document that was referred to and subsequently recorded as an amendment to the restrictive covenants for Larkspur. The amended language states:
“Each Owner shall maintain and preserve his or her lot in a clean, orderly, and attractive condition. Maintenance and preservation of the lot shall include, but shall not be limited to, the trimming of shrubs, the mowing of grass, landscaping, the removal of trash, leaves, debris and fallen trees or limbs from the lot, and the storage of tools, recreational equipment and children’s toys, bicycles, and sports equipment in the dwelling, garage, or a shed which has been approved in accordance with Article VI of the Covenants.”
RECOMMENDATION
We recommend that the Council take no action at this time.
ATTACHMENTS