The McLean's owned a house and lot in a residential
subdivision in Detroit. For some reason they decided to build a gas
station in their backyard.
Sunborn, their neighbor, sued for an injunction to stop
the gas station, under the claim that the McLean's lot was subject to a negative
easement which insists that the lots only be used for residential
purposes.
30 years previous, the original owner of all the property
(McLauglin) sold off 53 of the 91 lots with a restriction that the land
be solely used for residential purposes (and that the houses cost at
least $2.5k each!).
However, the McLean's lot was sold without such a
restriction in the deed.
As part of the sale of the first 53 lots, McLauglin
entered into a reciprocal negative easement with the 53 owners,
which bound his remaining lots to the same restrictions as the lots he'd
sold, so the land that would become the McLean's was bound by this a reciprocal
negative easement.
In a reciprocal negative easement, both
landowners agree to a private zoning restriction for land use.
The term "negative easement" is a bit
antiquated. It's better known today as a "covenant".
Since a reciprocal negative easements run with
the land, when McLaughlin sold off the final 38 lots, each of those lots
was implicitly bound by the easement, even if it wasn't spelled out in
the deed.
The negative easement in this case is implied,
but it still exists. The 53 buyers relied on the fact that the
entire subdivision would be bound by the same provisions. Each plot in
the subdivision was sold as part of a "master plan".
The negative easement only affects plots sold after
the reliance began. So if the first few plots were sold without
restrictions, then those are not part of the reciprocal negative
easement.
The Trial Court found for Sunborn, McLean appealed.
The Michigan Supreme Court affirmed.
The Michigan Supreme Court found that there was a reciprocal
negative easement on McLean's land.
However, such and agreement is only binding on McLean if they had constructive notice of the easement.
McLean testified that they had no notice.
The Michigan Supreme Court found that, even if no one
explicitly told McLean about the restrictions, a quick look around the
neighborhood should have alerted him that this was a residential only
area.
This decision goes against the Statute of Frauds,
which says that all contracts involving the sale of land (including equitable
servitude, negative easements, and covenants) must be in
writing. In this case, the easement was implied, it was
never written down in the deed to McLean's lot.
What if the owners of the non-covenant properties argued
that they paid a premium for their land because it didn't have that covenant?
The courts would hold that they paid too much, since it is technically
impossible for McLaughlin to have sold the lots without the covenant.
McLaughlin can't sell what he didn't have. The land was
already bound by the implied reciprocal negative easement, so he
couldn't sell it as if wasn't.
