BOILING SP. LAKES DIV., ETC. v. Coastal Serv. Corp.

218 S.E.2d 476 (1975)

27 N.C. App. 191

BOILING SPRING LAKES DIVISION OF REEVES TELECOM CORPORATION v. COASTAL SERVICES CORPORATION et al.

No. 7513DC364.

Court of Appeals of North Carolina.

October 15, 1975.

*478 Frink, Foy & Gainey by Henry G. Foy, Southport, for appellant.

Ledgett, Gall & Edwards, P.A., by G. Thomas Gall, Southport, for appellees.

CLARK, Judge.

The courts hold that restrictive covenants imposed by the original owners or a common vendor of a tract of land in pursuance of a general plan for the development and improvement of the property, are valid and enforceable, provided they are not contrary to law or public policy. Webster, "Real Estate Law in North Carolina", § 344 (1971); 7 Thompson, Real Property, § 3164 (1962).

In North Carolina restrictive covenants are strictly construed against limitations upon the beneficial use of property, but such construction must be reasonable and not applied in such a way as to defeat the plain and obvious purposes of a restriction. In applying the strict but reasonable test of construction, "`the surrounding circumstances existing at the time of the creation of the restriction are taken into consideration in determining the intention.'" Long v. Branham, 271 N.C. 264, 268, 156 S.E.2d 235, 239 (1967).

Sub judice, for the first time in this Court, we have a restrictive covenant which requires building plans to be submitted to and approved by the grantor. Generally, the courts of other states, with the possible exception of Ohio, agree that this restrictive covenant is valid and enforceable, even though the covenant does not in itself impose standards of approval, when applicable to all of the lots in a residential subdivision as part of a uniform plan of development, or when used in connection with some other stated restriction within which approval may operate. See, Annot., 40 A.L.R.3d 864 (1971).

The exercise of the authority to approve the house plans cannot be arbitrary. There must be some standards. Where these standards are not within the restrictive covenant itself, they must be in other covenants stated or designated, or they must be otherwise clearly established in connection with some general plan or scheme of development. Vaughan v. Fuller, 278 Ala. 25, 175 So. 2d 103 (1963); Rhue v. Cheyenne Homes, Inc., 168 Colo. 6, *479 449 F.2d 361 (1969); Levin v. Mountain Farms, Inc., 22 Conn.Sup. 14, 158 A.2d 493 (1959); Kirkley v. Seipelt, 212 Md. 127, 128 A.2d 430 (1957); Carroll County Dev. Corp. v. Buckworth, 234 Md. 547, 200 A.2d 145 (1964); Parsons v. Duryea, 261 Mass. 314, 158 N.E. 761 (1927); West Bloomfield Co. v. Haddock, 326 Mich. 601, 40 N.W.2d 738 (1950); Syrian Antiochian Orthodox Archdiocese v. Palisades Associates, 110 N.J.Super. 34, 264 A.2d 257 (1970); Plymouth Woods Corp. v. Maxwell, 407 Pa. 539, 181 A.2d 321 (1962).

And it is the general rule that a restrictive covenant requiring approval of house plans is enforceable only if the exercise of the power in a particular case is reasonable and in good faith. Annot., 40 A.L.R.3d, supra, at 879.

In applying the test of reasonableness and good faith to the case before us, we must consider the general plan or scheme of development which was established initially and subsequently up to the time that the plans of the defendant Williams submitted his house plans to the plaintiff for approval as required by the restrictive covenant. It is clear that all advertising was directed to the low income groups, and that the purchasers were given the impression that they could erect small homes. Though there was a policy to require that the houses have a minimum size of 800 square feet, some deviations were allowed for the construction of smaller homes, and there was no evidence that the policy applied only to the ground floor. We conclude that under these circumstances the disapproval of the plans for dwelling of the defendant was not reasonable.

The judgment is

Affirmed.

MORRIS and VAUGHN, JJ., concur.