2.4 Private Land Use Controls: CC&Rs and Restrictive Covenants in Deeds

Private Land Use Controls: Deeds and Declarations

While public land use controls originate from governmental police power, private land use controls are created through private contractual agreements, conveyance instruments, and recorded declarations. They allow grantors, developers, and neighborhood associations to regulate property design, architecture, property maintenance, and land use for decades into the future.

Private land use restrictions fall into two main categories:

1. Individual Deed Restrictions: Limitations placed directly within an individual deed by a grantor conveying title to a grantee. For example, an owner conveying a rear acreage parcel may include a clause stating: "The grantee, their heirs, and assigns shall never erect any commercial structure or keep livestock upon the premises."
2. Declaration of Covenants, Conditions, and Restrictions (CC&Rs): A comprehensive, master set of private covenants recorded by a subdivision developer against an entire tract prior to selling individual lots. Commonly utilized in planned unit developments (PUDs), condominium associations, and common-interest residential communities, the CC&Rs establish an overarching scheme of mutual covenants that bind all subsequent lot buyers.

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Covenants Running with the Land

A primary legal question in real property law is whether a restrictive covenant is merely a personal contract between original contracting parties or a covenant that runs with the land (binding all subsequent purchasers, heirs, and assigns who were not parties to the original agreement).

Under New Jersey law, for a restrictive covenant to run with the land and be enforceable in equity against remote grantees, four legal elements must be satisfied:

1. Intent: The original language in the deed or master declaration must clearly manifest the intention that the restriction binds future successors in title (e.g., using terms such as "heirs, executors, administrators, successors, and assigns").
2. Touch and Concern the Land: The covenant must directly affect the physical nature, use, enjoyment, occupation, or economic value of the real property, rather than being a collateral, personal obligation of the parties.
3. Privity of Estate: There must be vertical privity (a legitimate chain of title connecting the original covenanting parties to the current owners).
4. Notice: The successor owner against whom enforcement is sought must have had actual, constructive, or inquiry notice of the restriction. Recording the deed or master declaration in the county recording office provides constructive notice to all prospective buyers.

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The Interplay Between Public Zoning and Private Restrictions

A frequent source of legal dispute occurs when municipal zoning regulations and private restrictive covenants conflict. The absolute governing rule in New Jersey and national real property jurisprudence is:

$\mathbf{The\ More\ Restrictive\ Standard\ Always\ Prevails}$

Neither public zoning nor private covenants automatically cancel or extinguish the other. Instead, whichever rule imposes the tighter, more stringent limitation on the property owner governs the land's actual lawful use.

Comparative Legal Scenarios

Real estate brokers must exercise extreme care when advising prospective buyers: a municipal zoning permit or variance does not override, nullify, or excuse a violation of a private deed restriction.

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Enforcement of Private Restrictions

Private land use controls are enforced exclusively through civil legal proceedings:

• Standing to Enforce: Restrictive covenants in a planned community may be enforced by the Homeowners Association (HOA), its Architectural Review Committee (ARC), or any individual lot owner whose property is part of the common development scheme and benefited by the restriction.
• Equitable Relief (Injunction): The primary judicial remedy for breach of a restrictive covenant is an equitable action seeking an injunction (a court order compelling the violating owner to cease the unauthorized use or tear down an unapproved structure).
• No Municipal Enforcement: Local police departments, municipal zoning officers, and building inspectors possess no legal authority to enforce private CC&Rs, HOA architectural bylaws, or deed restrictions. They enforce only public municipal ordinances and construction codes.

Defenses to Enforcement

A property owner defending against an enforcement action may assert several equitable defenses:

• Laches: The party seeking enforcement engaged in unreasonable, inexcusable delay in asserting their rights, causing severe prejudice to the defendant (e.g., waiting silently while a neighbor spends $100,000 constructing an outbuilding, then suing to demolish it).
• Waiver or Abandonment: The HOA or neighbors have permitted numerous, widespread, and continuous violations of the same restriction throughout the community, effectively demonstrating that the restriction has been abandoned as a general scheme.
• Doctrine of Changed Conditions: Radical and permanent changes in the character of the surrounding neighborhood have occurred, rendering the original purpose of the restriction impossible to achieve (e.g., all surrounding properties have become major commercial thoroughfares, rendering single-family residential covenants obsolete).

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Termination of Private Restrictive Covenants

Private covenants and CC&Rs may be terminated or dissolved through:

1. Expiration of Stated Period: Many CC&Rs specify an automatic expiration date (e.g., 25 or 30 years) unless renewed by a vote of the property owners.
2. Express Written Release: Execution of a formal, recorded release instrument signed by all property owners benefited by the covenant.
3. Merger of Title: If one owner acquires title to all parcels burdened and benefited by the restriction, the covenants terminate through unity of ownership.
4. Condemnation: When government acquires land burdened by covenants through eminent domain for a public facility, conflicting private restrictions are extinguished.

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Illegal and Void Covenants: The Anti-Discrimination Standard

Historically, deeds and subdivision declarations frequently contained covenants prohibiting the sale, lease, or occupancy of real estate to individuals of specific racial, religious, or ethnic backgrounds.

Today, all discriminatory restrictive covenants are unconstitutional, void ab initio (void from the beginning), and legally unenforceable under three binding authorities:

1. Shelley v. Kraemer (1948): The United States Supreme Court ruled that judicial enforcement of racially restrictive private covenants by state courts constitutes "state action" in direct violation of the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution.
2. Federal Fair Housing Act of 1968 (Title VIII): Explicitly prohibits discrimination in housing based on race, color, religion, sex, familial status, national origin, or disability. Any covenant that attempts to restrict occupancy based on these protected classes is illegal under federal law.
3. New Jersey Law Against Discrimination (NJ LAD, N.J.S.A. 10:5-1 et seq.): New Jersey provides some of the most expansive civil rights protections in the nation, prohibiting discrimination based on race, creed, color, national origin, nationality, ancestry, age, marital status, affectional or sexual orientation, gender identity, familial status, or lawful source of income. Furthermore, N.J.S.A. 46:3-29 statutorily renders any restrictive covenant discriminating on these grounds completely null and void as against public policy.