Vermont Supreme Court Addresses Interplay of Zoning and Private Covenants

In a recent decision regarding “the interplay between rulings and requirements relating to zoning in connection with a planned unit development and enforcement of restrictive covenants and deed restrictions applicable to property within the development,” the Vermont Supreme Court emphasized that the two matters are distinct, governed by separate sources of law, and different courts have authority to decide the questions related thereto. The Supreme Court held in Marsh Inter Vivos Trust v. McGillvray et al., 2013 VT 6, ¶¶ 16-19, that the Superior Court, Civil Division, clearly had authority to address questions regarding deed restrictions and restrictive covenants and to bar development on the basis of those private restrictions and covenants, even though the Superior Court, Environmental Division, had concluded that the proposed construction complied with applicable zoning regulations. Moreover, in rejecting Plaintiff’s argument that the Civil Division lacked jurisdiction to address issues related to restrictions and covenants once the Environmental Division granted zoning approval, the Supreme Court endorsed the Environmental Division’s own conclusion that, in general, it does not have authority to resolve private property rights issues. Id. ¶ 19.

In its decision, the Supreme Court also explicitly addressed, for the first time, when a cause of action for breach of a restrictive covenant begins to accrue, holding that such a cause of action “accrues upon breach of the covenant.” Id. at ¶ 16. More specifically, the Court held that “[w]here the alleged covenant violations involve the construction of a noncomplying structure, the construction itself, and not merely preparatory steps that may be necessary predicates to the construction but do not themselves constitute or require the construction, starts the limitations period.” Id. In other words, the eight-year statute of limitations to enforce covenants found in a deed, set forth in 12 V.S.A. § 505, does not begin to run until construction of the offending structure commences, and other activities, such as obtaining necessary permits and approvals associated with the construction, are insufficient to trigger the running of the statute of limitations.

For further information regarding the relationship between zoning and private covenants, or for assistance writing enforceable permit conditions, please contact the Firm.