Unrecorded Pud Plans: on the Frontier of Due Diligence
| Publication year | 1990 |
| Pages | 1089 |
| Citation | Vol. 19 No. 6 Pg. 1089 |
1990, June, Pg. 1089. Unrecorded PUD Plans: On the Frontier of Due Diligence
In South Creek Associates v. Bixby & Associates, Inc.,(fn1) the Colorado Supreme Court recently addressed a question of first impression in Colorado: whether a planned unit development ("PUD") plan must be recorded in the real estate records in order to be enforceable against a subsequent purchaser of land within the PUD.(fn2) By answering that question in the negative, the court sanctioned a method of creating interests in property(fn3) which are enforceable even against those who acquire the property without actual notice of the interests created and without the constructive notice provided by recording.
This article reviews the basis for the court's decision in South Creek and offers some considerations for the future.
The South Creek case arose when plaintiff South Creek Associates ("South Creek"), the owner of a shopping center in Boulder, brought an action to quiet its title to the shopping center parking lot. Defendant Bixby & Associates, Inc. ("Bixby") owned and operated a private school on a separate parcel adjacent to the shopping center. Contrary to South Creek's wishes, Bixby routinely used the shopping center parking lot.
In 1977, before South Creek and Bixby acquired their respective parcels, the original owner and developer of both parcels filed a PUD application with the city of Boulder. The developer, McStain Enterprises, Inc. ("McStain"), desired to develop as a PUD a tract of land which included both parcels. The PUD was to include a residential area, a shopping center and a private school.
The PUD application included, among other submissions, a sixteen-page plan entitled "Statement of Intent."(fn4) This plan contained only two statements regarding the parking facilities in dispute. In its "Guidelines for School Site," the plan stated that "the adjacent parking lot will be available for the mutual use of the school and the commercial facility." In its "Guidelines for Neighborhood Center," the plan stated that "[t]he parking on the southeast portion of the site is intended for the mutual use of the school and the shopping center tenants."
In December 1977, the proposed PUD plan was approved by Boulder's Planning Board.(fn5) The approval was given subject to certain conditions, including a requirement that appropriate covenants be recorded prior to subdivision. The South Creek opinion does not disclose the contents of those covenants, but they apparently were not useful to resolve
A subdivision plat eventually was approved by the Boulder City Council and then properly recorded. Although the plat showed a number of easements, it did not indicate that a parking easement had been established over the disputed parking lot for the adjacent parcel's benefit.
In the summer of 1978, McStain conveyed to Bixby(fn6) that portion of the PUD property which was designated for use as a school. The recorded deed granted Bixby a non-exclusive easement for ingress and egress over other portions of the PUD property, in order to provide access to and from the school. However, the deed did not expressly provide an easement for parking in the adjacent parking lot.
The only reference to the PUD in the real property records of Boulder County appeared in a subdivision agreement made between McStain and the city of Boulder in April 1978. That agreement, which was properly recorded before South Creek acquired the shopping center, stated that the subdivision's development was to be controlled by the previously approved PUD. However, nothing in the agreement specifically referenced the parking provisions of the PUD plan or Bixby's parking rights.
In May 1982, South Creek purchased the shopping center, including the disputed parking lot. The deed to South Creek noted that the property was subject to the recorded subdivision agreement, as well as certain other encumbrances which were listed on an attached exhibit. The deed did not mention the PUD plan or Bixby's parking rights.
In 1984, South Creek filed its quiet title action, alleging that Bixby had no right to use the parking lot. In support of its motion for summary judgment, South Creek averred that it had acquired the shopping center without actual knowledge of Bixby's asserted parking rights...
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