E2023-00463-COA-R3-CV
Tenn. Ct. App.Mar 14, 2024Background
- In 1997, the Driftwood Estates developer recorded a Declaration of Covenants for Unit 1, which covered only Lots 1-12 (the property at issue was not included).
- The developer later transferred "Tract 1" (which included the property at issue) via deed to a third party, referencing the Declaration as "subject to," but did not record a new declaration encumbering this land.
- Several transfers occurred until the Sweeneys acquired part of Tract 1; their deed also referenced being "subject to" the Declaration.
- The Sweeneys sought and received HOA approval for initial plans, but were later denied approval for a prefabricated barn, which they installed anyway, triggering the HOA's lawsuit to enforce the architectural restrictions of the Declaration.
- The trial court granted the Sweeneys' motion to dismiss, finding that the property was not expressly or validly subject to the Declaration and rejecting alternative arguments by the HOA, leading to this appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the property is expressly subject to the restrictions in the Declaration | Reference to "subject to" in the deed and recordation incorporated the property | "Subject to" language alone is insufficient without following required procedure | Property was not expressly or validly subject to the Declaration |
| Applicability of implied negative reciprocal easement (INRE) | INRE should apply to impose restrictions | INRE does not apply because Declaration specifically identifies covered lots | INRE does not apply; restrictions require express inclusion |
| Waiver based on prior HOA plan submissions | Sweeneys waived objection by previously seeking approval | Seeking approval did not constitute waiver, nor did it encumber the land | Waiver is defensive, cannot establish a restrictive covenant |
| Attorney’s fees on appeal | - | Sweeneys request fee consideration upon exhaustion | Fees not addressed until all appeals are exhausted |
Key Cases Cited
- Hughes v. New Life Dev. Corp., 387 S.W.3d 453 (Tenn. 2012) (restrictive covenants must be construed strictly against the party seeking enforcement; "subject to" language alone is insufficient to bind property not expressly included)
- Phillips v. Hatfield, 624 S.W.3d 464 (Tenn. 2021) (one who does not own property at the time of recordation cannot encumber it by recording a covenant)
- Ridley v. Haiman, 47 S.W.2d 750 (Tenn. 1932) (sets out elements required to establish an implied negative reciprocal easement)