So many of you live in communities that are actually on a golf course or are adjacent to a golf course. While some of you purchased your home because you actually play golf, more of you purchased because you like the golf course view. You expected to have that view for as long as you own the property. In fact, you would think that you have the right to expect that view, especially when there is a restrictive covenant on your property requiring the owner of the golf course property to keep it that way.
Here’s the potential problem. Golf is a dying game. It was much more popular when Nicklaus, Palmer and especially Tiger Woods were tearing up the course. They aren’t any longer and nobody seems to be playing golf any longer. As a result, these golf courses are no longer profitable and the owners want to turn them into additional homes. The question is…can they do it?
In a brand new case called Victorville West Limited Partnership v. The Inverrary Association, Victorville purchased a golf course property in 2006. The golf course had a restrictive covenant on it that required the golf course to solely be used for sports. The developer now said that he wants that restrictive covenant canceled because it was no longer profitable. The community association wouldn’t take a vote to authorize the cancelation of the restrictive covenant. The developer then sued, arguing that under Florida law, the restrictive covenant can be canceled because there has been a substantial change in circumstances such that the covenant’s purpose can no longer be carried out and that the covenant is an unlawful restraint on alienation.
At trial, some of the unit owners testified that they like the golf course because it provided a tranquil view, prevented overcrowding and preserved the nature of the community.
The Appeals court held for the Inverrary residents, specifically stating that the covenant still provides them with all of the benefits they testified to. Even if the golf course is failing financially, the covenant must be enforced because it remains a “substantial value to the surrounding residences.” Nothing in the agreement anticipates that the golf course is going to be profitable.
It’s really amazing to watch The Florida Legislature routinely protect the rights of developers, but The Florida Courts protect the rights of the owners. The Florida Legislature bends over backwards to help developers. This time, the Courts helped the little guy.
I’m not so sure this particular battle is over though. Here is what the covenant actually says:
The [Golf Course] shall henceforth be used solely for recreational purposes, including all sports as defined herein, and for the Facilities and amenities appurtenant thereto, such as clubhouses and recreational, maintenance, and storage facilities and equipment. For the purposes of this Declaration, the term “sports” shall be deemed to include, by way of illustration and not in limitation thereof, the following: Golf, tennis, horseback riding, swimming and all such other recreational activities as may be appropriate and in keeping with the overall development of Inverrary….
The developer may still have some choices and some tricks up his sleeve. The covenant apparently does not require the property to remain as a grass area. He can threaten to black top it all and turn it into basketball and tennis courts. That might get the owners to sit down and talk and buy the developer out. He can make the owners a cash settlement offer in exchange for a release from the covenant. Or…. He can simply cut his losses, sell the property and get out of the bad deal he apparently made. There’s lots of cases out there that say it’s not the job of a court to relieve someone from a bad deal they made. So, let’s see what happens.
Just know, as it becomes more and more difficult to fund the operation of a golf course, your communities will be faced with these very same issues. Now at least you have an appeals court opinion that gives you some ammunition against a developer looking to steal the peace and serenity you purchased.