Enforceability of Land Use Servitudes Benefiting Local Government in Washington

• Publication year: 1979

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 3, No.1FALL 1979

Enforceability Of Land Use Servitudes Benefiting Local Government In Washington

Stephen Phillabaum

City and county governments in Washington commonly use conditional approval of development applications as a land use planning tool.(fn1) The terms of approval often require that the developer promise to use his land in a certain manner. If the developer agrees, he records his promise as an equitable servitude to run with the land.(fn2) Both parties benefit by the conditional approval. The developer receives approval for a project that local government would normally disapprove as not in compliance with local land use plans, while local government controls the project's adverse effects. Superficially, the arrangement seems ideal; the effectiveness of the developer's promise, however, is unknown.(fn3)Washington courts have not decided if an executory promise benefiting local government is enforceable against the promisor's grantee when the grantee has no independent contractual obligation.(fn4) Therefore, it is uncertain whether equitable servitudes benefiting local government will run with the land and bind subsequent owners.(fn5) After evaluating present Washington law, this comment concludes that Washington courts should enforce equitable servitudes as useful land use planning tools for local government.(fn6)

When analyzing local law the first considerations are the general elements required to make equitable servitudes run: form, notice, and touch and concern.(fn7) Because competent drafters can meet the first two elements, they pose no general problems. Regarding form, drafters must memorialize equitable servitudes in a document signed by the promisor because courts consider equitable servitudes property interests to which the Statute of Frauds applies.(fn8) To ensure the promisor's successors have notice of the promise, the parties need record only a proper document in the chain of title to the burdened land.(fn9) Unlike form and notice, the touch and concern requirement is a doctrinal limit on the class of promises that run with the land to bind subsequent owners. Under touch and concern analysis, courts examine the substantive nature of the promise to determine if it relates to the land.(fn10) Regardless of the parties' intent, only promises related to the land will run as equitable servitudes.(fn11) This touch and concern test, therefore, usually determines the enforceability of servitudes.

Unfortunately, courts often impose the touch and concern requirement without adequate analysis. A court may simply label the promise "in gross," i.e., personal, and, consequently, refuse to enforce it against subsequent owners.(fn12) Sound policy reasons, however, support imposition of the touch and concern test. First, the test prevents promises unrelated to the land from encumbering titles and thus furthers the pervasive judicial policy of promoting free use and alienability of land.(fn13) Second, the test limits the situations in which a court will enforce a contract against a noncontracting party. As a means of making promises enforceable, the doctrine of covenants and servitudes running with the land has contract characteristics.(fn14) But under traditional contract theory, running servitudes are unusual because they bind a person not a party to the original contract. Courts, accordingly, should impose the touch and concern requirement to limit the running of contract burdens in the real property context.(fn15) The burden runs to nonparties only when the promise concerns the land itself.(fn16) In a sense, courts enforce the promise against subsequent owners of the land because the promise binds the land itself. Accordingly, the touch and concern test promotes free alienability of land and limits the instances in which a promise binds noncontracting parties.

While there is agreement that a touch and concern test is necessary, the actual nature of the test varies.(fn17) The Washington Supreme Court stated its touch and concern test in Rodruck v. Sand Point Maintenance Commission.(fn18) In Rodruck, the trial court enforced an affirmative promise to pay for road maintenance against three subdivision lot owners.(fn19) The developer recorded restrictive covenants for the subdivision in 1929. The covenants provided that a commission composed of the subdivision lot owners was to own and maintain the subdivision streets. The three lot owners purchased their lots in 1942 with record notice of the covenant to pay their share of road assessments. After annexing the subdivision in 1953, the City of Seattle assessed the maintenance commission for street improvements. The commission, pursuant to the subdivision covenants, then assessed the costs to the subdivision lot owners. In their appeal, the lot owners contended the promise did not touch and concern the land. Denying the appellant's contention, the Rodruck court established a two-part touch and concern test: (1) the promise must substantially alter legal rights associated with land ownership; and (2) the promise must relate to the land so as to enhance the land's value.(fn20)

Courts apply the touch and concern requirement to a promise to determine if the promise will run with the land as a servitude. For clear analysis courts must apply the test separately to the benefit and burden sides of the promise.(fn21) While it is clear that the burden of a servitude must touch and concern the land,(fn22) Washington courts have not decided if the benefit of a servitude also must touch and concern the land.(fn23)

Under the Rodruck touch and concern test, the burden of a publicly imposed land use servitude usually meets both aspects of the test. The first aspect of the test, alteration of legal ownership rights, is met by definition. Land use servitudes relate to the land and modify rights connected with land ownership because they restrict normal property uses. The second aspect of the test, benefit to the burdened land, is met if local government properly imposes a servitude. Local governments impose land use regulations as an exercise of their police power.(fn24) Thus, for local government to impose a servitude, the servitude must provide some health, safety, or general welfare benefit to the community. The burdened land, the land the servitude restricts, is the focus of the area that receives the benefit. Therefore, the servitude benefits the burdened land as well as the surrounding land. Just as the burden of paying for better roads in Rodruck benefited the burdened lots, so too the burden of a land use servitude benefits the burdened land. Just as the court found that a road maintenance servitude touches and concerns, so it should find that the burden of a land use servitude touches and concerns.

Courts have found, furthermore, that burdens very similar to those imposed by local government touch and concern the land. For example, private subdivision covenants requiring that an architectural review committee approve house plans run with the land.(fn25) The burden of such convenants is identical to the burden of site plan review servitudes that local government imposes. Both promises require approval of plans before construction. Private subdivision building standards and use restriction servitudes are further examples.(fn26) The burden of such servitudes is identical to publicly imposed site development servitudes. Because typical public land use servitudes impose the same burden as private subdivision use restrictions, Washington courts should find that the burdens of land use servitudes touch and concern the land. Equitable servitudes impose the same burden, whether a private or public entity holds the benefit.(fn27)

The most significant issue in enforcing a public land use servitude is the touch and concern requirement applied to the benefit side. There are two views: some jurisdictions require that the benefit touch and concern land,(fn28) while others allow a promise to run when the benefit is in gross.(fn29) Although Washington appellate courts have not decided the issue,(fn30) the majority of jurisdictions require that the promise touch and concern benefited land.(fn31)Those courts adopt a policy prohibiting in gross obligations from running with the land and encumbering titles. Conversely, some courts follow an equitable doctrine, originally articulated in Tulk v. Moxhay,(fn32) that does not require the benefit of a servitude to touch and concern the land.(fn33)

In Tulk the owner of several houses adjacent to Leicester Square garden sold the garden subject to a servitude requiring the purchaser and his successors to maintain the garden. After several mesne conveyances the defendant purchased the property with actual notice of his predecessor's promise. Because there was no horizontal privity, the covenant could not run at law and the defendant sought to build on the property. The equity court, after finding the promise bound the defendant, enjoined him from building.

The court based its holding on two theories. One was the contract theory that a vendee with knowledge of the contract his vendor made cannot disregard the obligation. Under this theory, the court granted specific performance on the contract to prevent the vendee from being unjustly enriched by purchasing inexpensive restricted land and later selling the land for a greater price free of the restriction. The other theory was based on property...