Church Property – Part 2

A Missouri court ruled that a “restrictive covenant” contained in the deed to church property prevented a church from building a parking lot.

Church Law and Tax2004-07-01

Church property – Part 2

Key point 7-13. A restrictive covenant is a restriction on the use of property. Such restrictions often are noted in deeds to property, but they may appear in other documents as well. Such restrictions apply to a church’s use of its property.

State Court Rulings Regarding Church Property Disputes
Internal Property Dispute Resolution Procedures

* A Missouri court ruled that a “restrictive covenant” contained in the deed to church property prevented a church from building a parking lot. The church owns and occupies several lots within a subdivision. Church leaders wanted to construct parking lots on three of the lots it owns. A homeowners’ association sought a court order permanently enjoining the church from building parking lots on its property. The association claimed that the building of parking lots would violate a 1917 restrictive covenant covering each lot in the subdivision. The covenant specifies that “none of said lots shall be improved, used nor occupied for other than private residence purposes.” The church admitted that the lots on which it proposed to build parking lots are encumbered by the “private residence purposes” restriction. It claimed, however, that under Missouri law, church uses, including “accessory uses” like a parking lot, are authorized and expected in residential districts. Alternatively, the church asserted that the restrictive covenant should not be enforced against it because of changed conditions. The trial court ruled in favor of the homeowners’ association. It found that the language of the restrictive covenant encumbering the property was unambiguous and requires “that none of the lots can be improved, used or occupied for other than private residence purposes, to the exclusion of all other uses.” The court also found that the church’s evidence of changed conditions was insufficient because it offered “no substantial evidence of any changes in the character of the subdivision such as would have diminished the value these restrictions have upon other property within the subdivision.” Instead, the church’s evidence “principally pertains to changes in the church going habits and practices of church members and the resulting changes in the needs of churches, generally.” Therefore, the trial court held that the construction of parking lots would violate the restrictive covenant and permanently enjoined the church from building parking lots on its property encumbered by the restrictive covenant. The church appealed.

the restrictive covenant

The church argued that the restrictive covenant did not prohibit it from building parking lots. The court conceded that restrictive covenants are “regarded unfavorably and are strictly construed because the law favors the free and untrammeled use of real property.” Nevertheless, “restrictive covenants are also regarded as private contractual obligations and are generally governed by the same rules of construction applicable to any covenant or contract. Thus, restrictive covenants, like any other covenant or contractual provisions, will be enforced where the intention is clear.” The court concluded that the restriction providing that “none of said lots may be improved, used or occupied for other than private residence purposes” was unambiguous, and that “the plain and ordinary language of this restrictive covenant limits the use of the property to private residence purposes only, which are uses that are only for residential purposes … to the exclusion of all other purposes.” Because the proposed use of the parking lot “is not for a private residence purpose, the building of parking lots would violate the restrictive covenant. The trial court did not err in permanently enjoining the church from constructing parking lots on its property encumbered by the restrictive covenant.

changed circumstances

The church also argued that the restrictive covenant should be ignored because of “changed circumstances.” To establish changed conditions warranting non-enforcement of a restrictive covenant, “the burden rests on the defendant to prove: (1) the radical change in condition; (2) that as a result enforcement of the restrictions will work undue hardship on him; (3) and will be of no substantial benefit to the plaintiff.” The court acknowledged that “no hard and fast rule can be laid down as to when changed conditions have defeated the purpose of restrictions, but it can be safely asserted the changes must be so radical as practically to destroy the essential objects and purposes of the agreement.” The church claimed that there had been a radical change in conditions since 1917, when the original restrictions were imposed, including the introduction of zoning regulations which often authorize or require churches to provide off-street parking, and the residential growth patterns in the area. The changes to the church itself include the increase in the driving habits, population, and demographic patterns of the church’s members and the volume of activity at the church every day of the week. The church also argued that enforcement of the restriction would cause an undue hardship because the lack of parking could possibly result in the closing of the church. Finally, the church claimed that the enforcement of the restriction would be of no substantial benefit to the homeowners’ association, because a parking lot would not have a negative impact on the values of adjacent homes. The court disagreed that “changed circumstances” warranted non-enforcement of the covenant.

Application. This case illustrates a very important point. Many churches have purchased property that contains one or more restrictive covenants. Such covenants restrict a church’s lawful use of its property. If church leaders are not aware of the existence of a covenant, they may inadvertently violate it. This can trigger an immediate lawsuit by neighboring landowners. Here are the rules to note: (1) Be careful to inspect the proposed deed to any property you are acquiring by purchase or gift. Does it contain one or more restrictive covenants that could hinder the church’s use of the property? If so, this issue must be resolved before title to the property is transferred to the church. (2) Check out the deed to your current property to see if it contains one or more restrictive covenants. If it does, it will be enforceable if plainly written, and the circumstances have not changed significantly since it was first imposed. Country Club Homes v. Country Club Christian Church, (Mo. App. 2003).

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