Real Estate & Property Law

For instance, there was a Texas Appeals court case ruled on late last year whereby a coalition of homeowner-members of an association sued the association and a third-party developer to block the sale of a recreational park located adjacent to the subdivision in question. The association desired to sell the park, as it was record title holder to the property, to the third-party developer for use as a commercial enterprise. Furthermore, the park itself was not located within the boundaries of the subdivision proper. However, the deed restrictions on file for the subdivision included a specific reference to the recreational park and its prohibition against commercial use, even though the park was not included geographically in the subdivision. Likewise, the recorded map for the subdivision showed a designated "recreation area" which all parties agreed was the same park now in dispute.

The Court ruled that the deed restrictions, plat and subdivision map on file with the county all served to put prospective purchasers on notice that the park was to be used only for a recreational area and that commercial use was prohibited. The Court ruled further that the deed restrictions for the subdivision "demonstrated a plan of development" that imposed restrictions on property that was not included in the subdivision's boundaries. Thus, the homeowners prevailed and the sale of the park to the commercial developer was blocked. The Court's ruling implicitly found that the Association would have to safeguard the recreational use of the park even though the park existed outside the boundaries of the subdivision.

Now granted, this is a very narrow instance of extra-territorial jurisdiction applying to a community's deed restrictions; but, the ultimate lesson to be learned here is that sometimes additional scrutiny of an Association's dedicatory instruments is warranted when questions of deed restriction enforcement outside the borders of the subdivision arise. Do not just assume that because a nuisance or other issue exists outside the geographic bounds of the neighborhood, the Association can dismiss or otherwise ignore the deed restrictions that govern it.