HAVE YOUR DEED RESTRICTIONS BEEN WAIVED?

Given the rapid expansion of Texas cities and changing nature of many subdivisions, deed restrictions sometimes seem antiquated.  This is especially true where once residential streets are now busy thoroughfares more appropriate for commercial use.

Landowners restricted in the use of their property often look to neighboring uses.  When those uses are inconsistent with existing deed restrictions, important question arise:  Have my deed restrictions been waived?  If so, does this waiver allow me to use my property as I desire?

As with most legal questions, the answer is “it depends.”

WHAT IS “WAIVER?”

Waiver is the voluntary relinquishment of a known right Jim Rutherford Invs., Inc. v. Terramar Beach Cmty. Ass’n, 25 S.W.3d 845, 851 (Tex. App.-Houston [14th Dist.] 2000, pet. denied). Waiver is either made expressly or indicated by conduct that is inconsistent with an intent to claim the right.” Reytec Constr. Res., Inc. v. Baptist Hosps. of Se. Tex., No. 09-15-00085-CV, 2016 Tex. App. LEXIS 12534, at *23 (Tex. App.-Beaumont Nov. 23, 2016, no pet. (citing Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003)).

Generally, waiver is an affirmative defense on which the defendant bears the burden of proof. See Phila. Indem. Ins. Co. v. White, 490 S.W.3d 468, 485 (Tex. 2016) (explaining that a defendant bears the burden of proof on affirmative defenses); Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996) (citing Sun Expl. & Prod. Co. v. Benton, 728 S.W.2d 35, 37 (Tex. 1987)). A property owner being sued for enforcement or breach of restrictive covenants usually asserts waiver as a defense.  However, with increasing frequency, property owners are taking the initiative and filing suits to obtain court determinations that certain restrictions are invalid based upon waiver.  These suits are usually filed under the Texas Uniform Declaratory Judgements Act.

CAN DEED RESTRICTIONS BE WAIVED IN TEXAS?

Under Texas law, restrictive covenants may be waived, and waiver is ordinarily a question of fact. Tenneco Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996); Nolan v. Hunter, No. 04-13-00072-CV, 2013 WL 5431050, at *5 (Tex. App.-San Antonio Sept. 25, 2013, no pet.) (mem. op.). Where the facts and circumstances are admitted or clearly established, however, the question becomes one of law. Tenneco, 925 S.W.2d at 643.  Typically, jurors decide questions of fact, and judges decide questions of law. Thus, the characterization of waiver as a fact issue, versus a legal issue, can dictate the duration, complexity and length of a legal proceeding aimed at establishing waiver.

PROOF REQUIRED TO ESTABLISH A WAIVER OF DEED RESTRICTIONS

To establish waiver in a deed restrictions case, the nonconforming user must prove that violations then existing are so great as to lead the mind of the “average man” to reasonably conclude that the restriction in question has been abandoned and its enforcement waived. Hicks v. Loveless, 714 S.W.2d 30, 35 (Tex. App.-Dallas 1986, writ ref’d n.r.e.); Forest Hills Improvement Ass’n v. Flaim, No. 09-15-00478-CV, 2017 WL 5179968, at *4 (Tex. App.-Beaumont Nov. 9, 2017, no pet.) (mem. op.); EWB-I, LLC v. PlazAmericas Mall Tex., LLC, 527 S.W.3d 447, 466 (Tex. App.-Houston [1st Dist.] 2017, pet. denied).

Among the factors to be considered by the average man are:

• the number, nature, and severity of the then existing violations;
• any prior acts of enforcement of the restriction; and
• whether it is still possible to realize to a substantial degree the benefits intended through the covenant. Hicks, 714 S.W.2d at 35.

Using this analysis, non-enforcement of the covenants against a smattering of owners in violation is generally insufficient to demonstrate abandonment. On the other hand, if virtually all of the owners on a certain street are using their properties for commercial purposes despite a residential-use only restriction, a better argument for waiver may exist.

BEWARE EXPRESS NON-WAIVER PROVISIONS IN THE DEED RESTRICTIONS

Many Declarations of Restrictive Covenants contain a non waiver provision designed to prevent claims of waiver and abandonment of restrictive covenants.  Such a non waiver provision may read something like this:

“Invalidation of any of these covenants by judgement or court order, or the failure to enforce any of the said restrictions at the time of its violation shall in no way affect any of the other restrictions which shall remain in full force and effect.”

Where one of these provisions exist and is found to be enforceable, the number of violations of the covenants is generally immaterial.

Courts will find a nonwaiver clause ineffective only if the party seeking to avoid the covenants can demonstrate a “complete abandonment of the entire set of restrictions, including the nonwaiver provision.” Sides v. Saliga, No. 03-17-00732-CV, 2019 WL 2529551, at *14 (Tex. App.-Austin June 20, 2019, no pet. h.) (mem. op.) (quoting Vance v. Popkowski,534 S.W.3d 474, 479-80 (Tex. App.-Houston [1st Dist.] 2017, pet. denied); Musgrove v. Westridge St. Partners I, LLC, No. 2-07-281-CV, 2009 WL 976010, at *4 (Tex. App.-Fort Worth Apr. 9, 2009, pet. denied) (mem. op.).

Complete abandonment is demonstrated when there is evidence of violations so pervasive that they have destroyed the fundamental character of the neighborhood. Sides, 2019 WL 2529551, at *14; .” Vance, 534 S.W.3d at 480.

THE TAKEAWAY

Proving waiver of restrictive covenants is fact-specific and varies based upon the language contained in deed restrictions. Many situations that appear as “causal waivers” based on non-enforcement do not meet the strict criteria for proving legal waiver.