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Midsouth Golf, LLC v. Fairfield Harbourside Condo. Ass'n - 187 N.C. App. 22, 652 S.E.2d 378 (2007)

Rule:

The touch and concern requirement for a covenant running with the land is not capable of being reduced to an absolute test or precise definition. One of the historical tests as follows: it may be laid down as a rule without any exception, that a covenant to run with the land, and bind the assignee, must respect the thing granted or demised, and that the act covenanted to be done or omitted, must concern the lands or estate conveyed. To touch and concern the land, the object of the covenant must be annexed to, inherent in, or connected with, land or other real property, or related to the land granted or demised. 

Facts:

Fairfield Harbour, Inc. (FHI) recorded a set of restrictive covenants, entitled Master Declaration of Fairfield Harbour (the Master Declaration), in 1979.  The Master Declaration applied to all properties within Fairfield Harbour and included fees to use recreational amenities. Plaintiff Midsouth Golf, who had purchased the recreational amenities from FHI, filed an action to collect amenity fees from the homeowner's associations. The owner argued that all property owners within the development were necessary parties. The associations argued that the fee was a personal covenant and not binding on the associations or their members. The associations also filed a counterclaim for  breach of contract, unjust enrichment, and declaratory judgment, which Fairfield Harbour filed a motion to dismiss. The Court granted the associations' motion for summary judgment against the owners and dismissed the owner's motion to dismiss the associations' counterclaims.

Issue:

Were all property owners within the development were necessary parties?

Answer:

No

Conclusion:

On appeal, the court found that the property owners were not necessary parties. Because only the owner could enforce the covenant to pay the fee, the extinguishment of the restrictive covenant would not deprive the other property owners of any property right. Although the master declarations provided that the covenants ran with the land, the covenants did not touch and concern the properties in the development. The recreational amenities were open, for a fee, to members of the public who do not own property within the development, and the property owners merely had a revocable license to use the recreational amenities. As a successor in interest to the original covenant, the owner could not enforce the personal covenants. Thus, the court affirmed the judgment.

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