4.5 Interpretation of Restrictive Covenants

• Jurisdiction: Arizona

§ 4.5 Interpretation of Restrictive Covenants

The cardinal principle of interpretation of restrictive covenants was set forth by the supreme court in Palermo v. Allen. ³⁴¹ The court stated that:

In determining whether land is included in a building scheme doubts are to be resolved in favor of the free use and enjoyment of the property and against restrictions. ³⁴²

The corollary rule is that when both the intent of the parties and the purpose of the restrictions are clear, they should be examined to give the instrument a just and fair interpretation. ³⁴³

The Arizona Supreme Court in Ainsworth v. Elder³⁴⁴ set forth a “plain meaning test” in interpreting a deed restriction that required that “[o]nly one residence shall be erected on any one of said lots.” In holding the restriction enforceable, the court stated:

We must presume that the language carries the usual significance of the words in the locality where they are used, whether it be in the ordinary conversation or legal documents, unless the contrary clearly appears to be true. ³⁴⁵

The supreme court elaborated on the “ordinary meaning” rule of construction in Smith v. Second Church of Christ, Scientist. ³⁴⁶ In applying the rule of ejusdem generis, ³⁴⁷ the court held:

The general phrase ‘or other buildings’ here follows the specific words ‘barns’ and ‘garages’, and under the rule of ejusdem generis, such general language must be confined in its meaning by the specific enumeration which precedes it, unless an intention to the contrary is clearly shown. [Citation omitted.] Here we find no contrary intention and the words ‘other buildings’ will not be enlarged to encompass a class more comprehensive than commonly implied from the words ‘barns’ and ‘garages’, which clearly do not include a church. ³⁴⁸

In Duffy v. Sunburst Farms, ³⁴⁹ the court articulated additional rules of restrictive covenant interpretation. It stated:

When the meaning of a covenant is reasonable and unambiguous, however, there is no need to seek further clarification outside its language. Shea v. Sargent, 499 S.W.2d 871 (Tenn. 1973). As is the case with clear and unambiguous agreements (see Grossman v. Hatley, 21 Ariz. App. 581, 585, 522 P.2d 46, 50 (1974), rev. den., 1974, and cases cited therein), in the absence of ambiguity, restrictive covenants will be enforced according to their terms. Gunnells v. North Woodland Hills Community Association, 563 S.W.2d 334 (Tex. Civ. App. 1978). Even if ambiguity is present, any ambiguity in terms of the restrictive covenant or intent of the parties will be resolved against the restriction. ³⁵⁰

The court in Arizona Biltmore Estates Ass’n v. Tezak, ³⁵¹ provided additional rules of interpretation as follows:

Although strict construction is required in some circumstances, we also are aware that the cardinal principle in construing restrictive covenants is that the intention of the parties to the instrument is paramount. Riley v. Stoves,22 Ariz. App. 223, 225-26, 526 P.2d

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