The Southland Heights subdivision was created in a
residential section of Reno in 1941. By the late 1960s, the entire area
had changed. The surrounding streets were filled with commercial
businesses, and the main road next to the subdivision had become a major
commercial thoroughfare, with a shopping mall across the street.
When the subdivision was originally divided, there was a covenant
that restricted all construction to single-family homes.
Western bought a plot of land in the subdivision with the
intent of building shopping center. Truskolaski and the other residents
of Southland Heights sued to enjoin the construction.
The Trial Court found for Truskolaski and issued an injunction
barring construction. Western appealed.
Western unsuccessfully argued that the nature of the area
had changed so significantly that the covenant was no longer
relevant.
The Nevada Supreme Court affirmed.
Both Courts agreed that the area had not changed
sufficiently to make it inequitable or oppressive to restrict the
property to only single-family residential use.
Although the land use surrounding the subdivision had
changed, the subdivision itself hadn't changed.
The Nevada Supreme Court noted that, in cases where there
were significant changes within a subdivision that made the property
unsuitable for the original purpose of a covenant, then that covenant
could possibly be unenforceable.
Possibly, not always! Even if the was evidence that the
land could have more value if put to other uses.
Western unsuccessfully argued that the Reno City Council
was considering rezoning the subdivision from residential to commercial.
But the Nevada Supreme Court said that wouldn't override a privately-held
covenant.
Restatement of Property states that changes to
zoning laws do not invalidate private covenants unless they make
terms of the covenant illegal. The general rule is that where
zoning and restrictive covenants conflict, the more restrictive
prevails.
However, Restatement of Property also says that,
"if the purpose of the servitude can be accomplished but because of
the changed conditions the servient estate is no longer suitable for the
uses permitted by the servitude, a court may modify the servitude to
permit other uses under conditions designed to preserve the benefit of
the original servitude."
Basically the court can step in and create a
compromise, where the land can be used for something that isn't
technically allowed under the covenant, but wouldn't be too much
of a nuisance.
Western also unsuccessfully argued that, due to some
minor violations of the covenant by other residents, the covenant
should be considered to be abandoned. However, the Nevada Supreme Court
held that a covenant is only abandoned when violations are so
general as to frustrate the original purpose of the agreement.
The land that Western owned wasn't really useful as a
single family home, since it was across the street from a shopping mall.
Was it really fair to West to have an essentially useless property?
This case was eventually settled and Western agreed to put
some offices on the land, which wasn't as invasive as retail stores. This
is similar to the suggestion made in the Restatement of Property.
