Restrictive Covenants Governing Real Property Are Enforceable


As the owner of real property in Kentucky, restrictions governing the land you own may be in place and as such, can be enforced against you requiring you to adhere to the restrictive covenants in place. Although there can be a variety of other situations that call for deed restrictions being put in place, these are often times the result of the subdivision land for planned communities by developers. In circumstances such as these, a “Master Deed of Restrictions” is recorded in the office of the county clerk where the land is situated. A “buyer” agrees to abide by the restrictions, albeit sometimes unknowingly, when they purchase the property. The deed conveying the property makes reference to the “master deed” and includes language to the effect that the buyer has taken ownership of the property subject to the terms and conditions of the “master deed” including the restrictions.

As aptly explained in Hensley v. Gadd v. JHT Properties, LLC 560 S.W.3d 516 (Ky. 2018), restrictions constitute mutual, reciprocal, equitable easements of the nature of servitudes in favor of the owners of lots of which all were once a part; and constitute property rights which run with the land and inure to the beneficiaries or owners to enforce the restrictions. Id. at 521. “Servitudes” in this sense means subject to the easement or easements in place. This notwithstanding, the restrictions themselves are more akin to “protections” according to Kentucky law, in that they function to the protect the property owner and the public rather than restrict the subject property. Id. They are nevertheless enforceable as the Appellee found out in the above decision.

The Appellee here, was the owner of property in a subdivision that had been developed by the Appellant. As part of the development, the Appellant executed and filed a “Deed of Restrictions for Lots 1-15”. Said deed of restrictions, stated in pertinent part that “Lots 2 -15 shall be known and described as single family residential lots and only used for residential purposes”. It further stated that “Lot 1 shall be known and designated as a commercial lot”. The restrictions additionally prohibited any sign for advertising or any use that would constitute a trade, business or profession.

Appellee was the owner of lots 2 and 3 in the subdivision. As found by the trial court, he advertised the properties for “short-term” rental which constituted a business and therefore was in violation of the restrictions. The trial court further found that Appellant had not waived the enforcement of the restrictions. Appellee appealed this decision and it was taken up by the Kentucky Court of Appeals. Their finding contradicted the trial court in that they found the restrictions themselves to be vague and ambiguous and therefore unenforceable. The Kentucky Supreme Court rejected the decision of the Court of Appeals based on the following:

When interpreting a writing such as a contract or deed of restrictions, the fundamental and supreme rule is that the “intention of the parties governs”. Id. at 520 (citing Parrish v. Newberry, 279 S.W.2d 229, 233 (Ky. 1955). We must seek the intention from the language used and not substitute what was said by ignoring the plain meaning of what was actually said. Hensley, 560 S.W.3d at 521 (citing Mascolino v Noland & Cowden Enters., Inc., 391 S.W.2d 710, 712 (Ky.1965). Using the above as a guidepost, the Supreme Court reasoned that the subject properties were clearly restricted for single family residential use only and use as a “business” that made money from short terms rentals clearly violated the restrictions placed on the properties.

Key Holding: Unless enforcement thereof is properly waived, restrictive covenants placed on real property are enforceable according to their terms.