Some residential real estate deeds include provisions that limit or dictate what can be done with the property, often known as restrictive covenants. In a recent case (Mass. Land Ct. Jan. 25, 2017), the Massachusetts Land Court considered whether an option to repurchase land, styled as a restrictive covenant, could be exercised after a substantial period of time.
The plaintiff in the case was a subdivision developer that had sold several lots to residential purchasers, including the defendants, for the purpose of building homes on the lots. The plaintiff recorded a Declaration of Restrictive Covenants that applied to all of the subdivision lots, which contained a provision that allowed the plaintiff to repurchase any lot at the original sale price if home construction had not commenced within a year of the purchase.
In 2005, the defendants’ parents purchased a subdivision lot from the plaintiff, and a year passed without any construction. They subsequently conveyed the lot to the defendants, who also failed to build on the lot. In 2015, the plaintiff demanded that the defendants re-convey the property to the plaintiff, pursuant to the covenant contained in the Declaration. The plaintiff filed an action with the Land Court, claiming its right to exercise an option to re-purchase the lot as a result of the defendants’ failure to commence construction within a year after their purchase of the property.