As to Mr. Hastings' first question, I agree with
Mr. Hines: if the original developer once upon a time imposed covenants upon all
lots, then those covenants affect all lots (unless and until terminated by
614.24). If some of the subsequent owners of some lots 'pooled'
their lots and subjected them to mutual covenants, then those covenants cannot
bind owners of lots who did not sign onto the deal. See 2 Patton & Palomar
on Titles 3d section 350, pp.170-171 (2003):
" Reasonable restriction
During abstract examinations I've encountered some
of the same oddball uses of "covenants" as Mr. Holland lists
below.
Generally I read 614.24 fairly
broadly--as does the Iowa Supreme Court. Intended to clean
up "loose" interests in land and shorten title searches, the statute is
remedial in nature. It must be liberally construed--and that means, cut
off these dangling-string covenants.
"The statute did several things. It imposed
for the first time a statutory limit on the life of land use restrictions. It
emasculated the renewal terms of the restrictive covenant agreement (which
we have already set out) by providing for automatic termination of the
covenants in the absence of affirmative action to continue them rather than
automatic extension unless there was affirmative action to
rescind.
"We might add here parenthetically that we have
held s 614.24 to be constitutional, both generally and also against the
claim that it abolishes vested interests in real estate without due
process. [citations]."
Compiano v. Jones, 269 N.W.2d 459, 461 (Iowa
1978)(en banc)(emphasis in original)
"Involved here is an effort by the legislature to
simplify title examination by shortening the title-search period...[extensive
quotation from Report of Real Esate, Probate & Trust Law Section, A.B.A.,
137 (1955)] ...The statute we have under consideration resulted from efforts to
shorten the title-search period in Iowa. Marshall, Iowa Title Opinions &
Standards, s 12.3(E-1) at 77-78 (Supp.1970).
" The fundamental issue before us is whether we
should apply 614.24 narrowly or liberally. Our duty is to look to the evils the
legislature sought to remedy and the purposes it sought to serve. [Citation.]
Upon doing so we find that we cannot narrowly or technically apply this statute
or we would nullify the objective of limiting the title-search period....
Therefore we give the section liberal application. [Citations.]
"In the case at bar we have what the original
restricting document calls covenants. Covenants are agreements or promises.
[Citation to dictionary.]...The restrictive covenants were agreements or
promises and were therefore contractual. [Citations.]...We hold that the
promises which the owners mutually made by accepting their deeds come within the
definition of the word contract.
Compiano v. Kuntz, 226 N.W.2d 245, 248,
249 (Iowa 1975)
To same effect--"statute should be liberally
construed to further the purpose of its enactment--see:
Chicago & N.W.Ry.v. City of Osage, 176 N.W.2d
788, 794 (Iowa I970)
Calamus Comm. Sch. Dist. v. Rusch, 299 N.W.2d 489,
490 (Iowa 1980)
Amana Society v. Colony Inn, Inc. 315 N.W.2d 101,
110 (Iowa 1982)
To title exam clients I note the existence of such
plat utility easements with no dedicated utility providers, property use limits,
etc. I refer to 614.24 as probably having negated such interests, in
absence of any positive, written claim filed by anyone, either in or out of the
chain of title, for preservation of the reciprocal rights.
(In my third decade of law practice, now, I have
yet to see my first such claim!)
Contra Mr. Holland, I believe that such
'covenants' do not survive the limitation imposed by 614.24. Particularly in
light of the Court's declaration in Compiano v. Kuntz, that acceptance
of deeds to land subject to the 'restrictions' amounts to promises sufficient
to serve as consideration for such 'agreed' restrictions.
But I always caution the client to check 'the facts
on the ground'. See what's to be seen.
I.e., has any municipal or private
utility company actually laid conduits through a platted area of the examined
property that by covenant is 'reserved' for utility provision? If so, and
if the covenants have expired without preservation of claim, then the
company is technically trespassing--or, it might be said, have acquired rights
to easement independent of the 'covenant'. 'Adverse' use, anyone... And if
the land draws benefit from utility service provided then such easement
right, however obtained, is not objectionable. See 3 Patton & Palomar
on Titles 3d Section 603, pp. 224-226 (2003), citing Kleinmeyer v. Willenbrock,
202 Iowa 1049, 210 N.W. 447 (1926).
As to the question "can you contractually waive a
statute of limitation?" The answer must be Yes, when the legislature
has expressly allowed such waiver.
I think that waiver, granting owners special
permission to preserve a property right that would otherwise be 'taken' and
terminated by operation of the limitation statute, is necessary for
the Marketable Title Act to pass constitutional muster. I
believe this point answers Mr. Hastings' second question, below.
Remember the constitutional objections to 614.24:
it amounted to a taking of vested private property w/o due process of
law. Back in the 1970s the Supreme Court heard that objection--and
ruled the statute constitutional. The Court seems to have rested this
ruling upon the fact that the "expiration of the the limitation period [in the
marketable title acts] allowed for preservation thereof."
Presbytery of S.E. Iowa v. Harris, 226 N.W.2d
232,242 (Iowa 1975)(en banc). [This is the companion case to Compiano v.
Kuntz.] The Court's majority opinion quoted extensively from a Minnesota
Supreme Court decision construing that State's 40 year marketable title act. It
also cited Federal District court decision in Massachusetts. The
Minnesota quote included this line, with emphasis by the Iowa Supreme
Court:
"Marketable title acts merely require filing
notice rather than commencing an action; hence they may apply to vested future
interests. If s 541.023 automatically barred a vested right
retroactively without providing an opportunity to protect that interest, the
plaintiff's argument that vested substantial rights cannot be barred would have
considerably more force. On the contrary, however, s 541.023 allowed nine months
for any outstanding interest to be protected by the easy expediency of recording
notice. No one has a vested right in any particular remedy and the
legislature may change or modify the existing remedies for the enforcement and
protection of the contract rights as long as an adequate remedy remains.
(Authorities cited.)" (Emphasis
supplied).
Wichelman v. Messner, 250 Minn. 88, 83 N.W.2d 800
(1957), cited in Presbytery of S.E. Iowa, 226 N.W.2d at 239.
To the same effect is Town of Nahant v. U.S., 293
F.Supp 1076 (D. Mass. 1968):
"It is well established that a statute limiting the
time for assertion even of pre-existing property or contract rights is not
unconstitutional provided it allows a reasonable time after its enactment for
the assertion of those rights. (Authorities cited)."...
Iowa Supreme Court followed its
quotation from Town of Nahant by saying:
"We also recognize the numerous commentators who
persuasively argue that statutes premised on the theory that the legislature may
require periodic filing in order to preserve rights do not afoul of
constitutional limitations. [Citations, including Marshall.]"
Hoping people.find the above material
helpful.
Dave Hanson
Hofmeyer & Hanson PC
Fayette, Iowa
----- Original Message -----
Sent: Friday, May 28, 2010 9:42 AM
Subject: RE: [ISBA RealEstate]
Restrictive Covenants
I am interested in the professorial view of the reach of
614.24. Many Covenants provide for matters well beyond what many would
consider "use restrictions." For example owners associations in subdivisions
to maintain common areas such as stormwater management facilities and private
open space. Another example is utility easements created in covenants. That
used to be common practice locally (in the 1950s).
I have taken the position that such matters survive
indefinitely and have never been challenged in that interpretation, but the
issue has never been seriously pursued and I have no real authority for that
position other than that such provisions are not "use
restrictions."
No
matter how ancient covenants are we always attach a copy to title opinions and
include the following:
You should carefully review these Covenants to
make certain that the intended use of the property is in accordance with the
provisions of the Covenants. Enforcement of the use restrictions contained in
these covenants will be barred after twenty-one years from the date they were
recorded unless a verified claim is filed pursuant to Iowa Code Section
614.24.
I have also always been of the opinion that the
automatic 10 year extensions are ineffective as to anything within the scope
of 614.24. But, if covenants are contracts can you contractually waive a
statute of limitations?
Iowa recognizes the doctrine of reciprocal negative easements. So
if the orginial developer imposed relatively uniform convenants on a
substantial number of the lots (enough to create a general scheme), but
subsequently did not impose them on all the lots, an Iowa equity
court may recognize and enforce mutual equitable servitudes on all affected
lots under this doctrine.I do not believe that if no covenants were
imposed at the time the lots were originally developed, less than all the
lot owners can later get together and create covenants that will bind non
participating lot owners.
I agree that the standard covenant clause stating that the covenants
will automatically be renewed every so many years, unless amended has
any effect on the termination worked by 614.24, if a formal filing is not
made to keep the covenants alive every 21 years. It is odd that folks in Des
Moines think that such a covenant clause will counteract the effect of
614.24 because, as I recall, the leading cases (Campiano) applying
614.24 to land use covenants came out of Des Moines. Bill
From:
realestate-owner@iabar.org [realestate-owner@iabar.org] On Behalf Of Craig
Hastings [craig.hastings@amesattorneys.com]
Sent: Thursday, May
27, 2010 4:43 PM
To: realestate@iabar.org Serve
Subject:
[ISBA RealEstate] Restrictive Covenants
Had it happen a couple of times in Ames with major subdivisions. The
owners had to scare up signatures from the owners. Took forever. And, then
we had the debate whether less than 100% of the owners was sufficient to
encumber all the lots.
Issues with Restrictive Covenants still unresolved by Sup. Ct:
1. Can fewer
than 100% of owners impose covenants on all lots. There is a case from
Spirit Lake or Okoboji that basically holds that if you benefit from the
covenant it binds your lot whether or not you signed.
2. Can one
address the 21 year expiration issue by having automatic extensions? We see
this often in Polk County. Our view has always been that this doesn't work.
If it did, what would be the point of the 21 year limit. But Sup Ct hasn't
every specifically addressed issue as far as I know.
Craig R. Hastings
Hastings, Gartin & Boettger LLP
409 Duff
Ames, IA 50010
515-232-2501