Easement Not Expired After Expansion Deadline

 

Declarant does hereby establish and create for the benefit of the remainder of the land described as Phase II, Phase III, Phase IV and Phase V as described in Exhibit A hereto: (1) an easement for ingress and egress, by vehicles or on foot, in, to, upon and over the driveways and roadways in Phase I, including Harbour Close, and the right to maintain and repair the same if the owners of the condominium units in Harbour Landing, an expandable condominium, fail to perform their obligations as herein set forth; and (2) rights to install, connect with, make use of, and (if the owners of units in Harbour Landing, an expandable condominium, fail to perform their obligation as herein set forth) to maintain, repair and replace utility lines, wires, pipes, conduits, sewers and drainage lines which may from time to time be placed upon, over, or under the driveways or other common element of Phase I, and as the same may be from time to time relocated; provided that all damages caused by the exercise of such rights shall be promptly repaired, including without limitation, the restoration of all surface areas to their condition immediately prior to such exercise. Said easements shall continue until and unless that portion of the remaining land is added to Harbour Landing, an expandable condominium.

The declaration further provided that the remaining phases or any portion of the remaining property could be added to the condominium at different times.

Recognizing the uncertainty of expansion, the declaration granted the easements over Phase I, “until and unless” each phase is added to the condominium. When the declaration was originally drafted, only Phase I was subject to the easement, but after Phase II was added, the declaration was amended to extend the easements to Phase II. In 1990, the condominium’s right to expand expired.

The dispute between Harbour Pointe and Harbour Landing Condominium Association began after a contractor hired by Harbour Pointe attempted to use Harbour Close, a private road, to install utility lines to serve the remaining Harbour Pointe phases.  

The association denied the contractor access to the property, and put up “No Trespassing” signs. The association informed Harbour Pointe it would treat use of the easement as a trespass. Harbour Pointe sued the association, seeking an injunction and order to quiet title to the easement. Harbour Pointe argued that the association interfered with its easement rights and requested that the court remove any stay of execution on any temporary or permanent injunction enjoining the association from interfering with its use of the access and utility easements.

The association responded that Harbour Pointe’s easement rights expired in July 1990, when the declarant ceased to have the right and power to expand the condominium. It further asserted that the declaration and other condominium documents could not be construed as granting easements that benefitted land that could no longer be part of the association.

The trial court ruled that the declaration clearly granted Harbour Pointe the right to use the easement, and that right could only be extinguished upon the occurrence of the condition subsequent, i.e., if the land described as Phases III, IV and V were used to expand the condominium. Since the condition was not met, the easement rights remained in full force and effect. The association appealed.

The association contended that the trial court improperly concluded that the declaration clearly and unambiguously provided easements that would expire only when the remaining phases were added to the condominium, and that the declaration should be interpreted that the easements had expired with the declarant’s right to expand the condominium.

The appeals court considered the language contained in Article V of the declaration, “Description of Buildings and Units,” to infer that the declaration defined the “fully expanded” condominium to include 300 units on a site of approximately nine acres. Until that time, the easements were meant to continue. The court acknowledged that the condominium’s right to expand had expired; nevertheless, it found that, based on the consistency of the language in Articles 11A and Article V of the declaration, the easements could terminate only if the additional phases were consolidated into the condominium.

Therefore, the appeals court held that the trial court properly concluded that the easements were valid and properly issued the injunction permanently enjoining the association from interfering with Harbour Pointe’s use of the easements and the order quieting title to the easements in Harbour Pointe’s favor.

In a dissenting opinion, Judge Vertefeuille disagreed with the majority’s conclusion. He maintained that, notwithstanding a few inartfully drafted sentences in the declaration, its full meaning, under which the association was created, and considered in light of the history and purpose of the Connecticut Condominium Act and the other condominium documents, made clear that the disputed easements ended with the expansion rights of Harbour Landing Development Corporation, Harbour Pointe’s predecessor in interest.

He judged that there were two fundamental distinctions between condominium declarations and more conventional forms of contracts that counseled against the majority’s approach:

First, although the declaration established the rights and obligations of multiple parties, there was only one party to the declaration itself, the declarant. The other parties, most notably the unit owners whose rights were determined by the declaration, played no role in its drafting. Therefore, in disputes between the unit owners and the declarant, adopting a rule of construction that gives primacy to the intent of the drafter significantly benefits the declarant at the expense of the unit owners. In Judge Vertefeuille’s opinion, eliminating the ability of developers to stack the deck in their own favor against unsuspecting purchasers was precisely the legislature’s goal in adopting the act, and thus, the Harbour Landing declaration should be construed with that purpose in mind.

The second distinction is that a declaration is not solely a child of contract law. Rather, it is a hybrid creation of contract and property law, made possible only where expressly authorized by an enabling statute. While the dispute in this case was determined by the language in the declaration, the enabling legislation provides part of the context within which the declaration must be interpreted.

While it is true that the definition of “additional land” is defined at the time a declaration is recorded, a condominium that is defined at the outset as “expandable” remains “expandable; “even if the declarant does not, in fact, expand it before the expansion deadline is passed. However, the act may also be interpreted temporally to mean that once the window for expansion has passed, and when no land may be added to a condominium, the original expansion parcels cease to be “additional land” and the condominium ceases to be “expandable.”

To resolve ambiguities in the statutory language, the judge looked to the broader structure of the act and to its legislative history, considered in light of the development of condominium law in the past 50 years. He took from this history that the intent of the expandable condominium provisions in the model act was to afford both developers and purchasers the security of being able to complete a large project, piece by piece, insulated from risk that a depressed market might leave both facing problems associated with project abandonment. The judge construed consumer protection provisions of the model statute to further bolster his view that the majority’s interpretation in this case ran contrary to the rationales underlying modern condominium law.

Three lessons emerged from his review of the language and history of the act: First, there was no indication that the drafters of the model statute or the act considered the possibility that a developer might decline to add expansion phases to a condominium, but nevertheless seek to burden the unit owners with the costs of a permanent easement in favor of an unrelated development on those expansion parcels; nor was it likely that any of the initial Harbour Landing unit purchasers considered that possibility. Second, the act specifically seeks to thwart the pervasive use of self-dealing declarations, by which developers benefit themselves at the expense of unit purchasers. Third, the balance between protecting consumers and affording greater flexibility to developers turns on the fulcrum of adequate notice.

In the present case, the judge relied heavily on the principle that the burden of ambiguity should fall on the party best positioned to avoid the cost thereof. Where the scope and nature of reserved easements are unclear, they should not be interpreted to impose an endless and costly burden on condominium unit owners.

The judge concluded that the declaration failed to establish that the condominium property was subject to the perpetual and costly easements for the benefit of the adjacent unrelated development.

Editors Observation: The Editor thanks David Richards of McCarter & English, LLP, for contributing this case.