Untitled Texas Attorney General Opinion
GA-0864
| Tex. Att'y Gen. | Jul 2, 2011Background
- Attorney General considers seven Sunset Commission questions on validity/enforceability of restrictive covenants.
- Focus is on covenants that may run with the land and touch/concern the land; some questions require factual construction beyond AG opinions.
- Key tested concepts: covenants running with the land, touch/concern to land, notice to successors, and liens/foreclosure under homestead protections.
- Questions address transfer fees to for-profit clubs, whether such fees touch/concern the land, and enforceability of fees or transfer triggers.
- Statutes cited include Property Code §5.017 on transfer fees and Article XVI, §50 of the Texas Constitution on homestead foreclosure.
- AG concludes some issues are fact-intensive and cannot be definitively resolved without specific deeds and factual inquiry.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a covenant that requires payment of club fees touch and concern the land? | Request Letter suggests fees to a for-profit club may not benefit burdened property. | Some covenants touching/concern the land need not benefit the burdened property; case-by-case. | Touch/concern is a fact question; cannot be resolved here. |
| Do covenants that run with the land require that the owner have an ownership interest in the club? | Fees to a club where owner has no stake may still touch/concern the land. | No definitive rule; requires analysis of intention and relation to land. | Fact-intensive; no definitive determination in AG opinion. |
| Does Article XVI, §50 prevent foreclosure for a personal covenant not touching the land or for a lien not described as such? | Foreclosure may be barred for non-landTouching covenant under homestead protections. | If covenant runs with the land, foreclosure may be permissible; requires evidence of lien language. | Personal covenants not touching land do not bind successors; lien creation requires clear intent. |
| Do enforcement/penalty provisions in Chapter 202 of the Property Code apply to private club bylaws? | Chapter 202 damages up to $200/day may apply to covenants in dedicatory instruments. | Requires construction of original declaration, bylaws, and factual determination if they are dedicatory instruments. | Applicability depends on whether the governing documents constitute a dedicatory instrument. |
| Are transfer fees uncapped, imposed on each transfer, an unreasonable restraint on alienation? | Such fees may restrain alienation; Restatement guidance shows transfer fees can be valid with rational justification. | Unconscionability or excessive amounts may render fees invalid; factual inquiry required. | Generally may be valid with rational justification; unconscionability depends on facts. |
| Are restrictive covenants invalid if there is no notice to the burdened property owner at purchase? | Notice of restrictions is essential for enforceability. | Notice may be actual or constructive; depends on factual circumstances. | Notice to the grantee at purchase is required for enforceability. |
Key Cases Cited
- Inwood North Houston Homeowners' Ass'n, Inc. v. Harris, 736 S.W.2d 632 (Tex. 1987) (covenant running with the land requires touch/concern, intent, and notice)
- Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903 (Tex. 1982) (touch/concern definition; covenant value affected by promise)
- Homsey v. Univ. Gardens Racquet Club, 730 S.W.2d 763 (Tex. App.-El Paso 1987) (covenant touching/concerned the land; dues/assessments context)
- 718Assoc., Ltd. v. Sunwest N.O.P., Inc., 1 S.W.3d 355 (Tex. App.-Waco 1999) (restrictions and enforceability; lien/foreclosure context)
- Davis v. Huey, 620 S.W.2d 561 (Tex. 1981) (notice requirement for enforceability of restrictions)
- Samms v. Autumn Run Cmty. Improvement Ass'n, 23 S.W.3d 398 (Tex. App.-Houston [1st Dist.] 2000) (deed restrictions give HOA power to change assessments; notice context)
- Navasota Res., L.P. v. First Source Tex., Inc., 249 S.W.3d 526 (Tex. App.-Waco 2008) (Restatement guidance on restraints on alienation; transfer fees context)
- Sonny Arnold, Inc. v. Sentry Sav. Ass'n, 633 S.W.2d 811 (Tex. 1982) (restatement approach to restraints on alienation; general principle)