Unmistakable Marks: Common Scheme Doctrine
While the Statute of Frauds severely limits the transfer of interests in real property by parol agreement, there are several operations of law that in some way appear to circumvent the statute. One of more obscure concepts found in this particular pantheon is the “common scheme doctrine.”
While written covenants and maps often supply the necessary indications of an overall intent, the common scheme doctrine may recognize the existence of restrictions or enforce equitable servitudes on individual tracts where no written record is found in the language of the deed under consideration. Essentially, the property rights are imposed by implication based on an overall pattern of behavior.
The common scheme doctrine — also referred to as common plan or general scheme — may be applied to impose the apparent intent of a developer on an individual tract of land in a subdivision. For this principle to operate, it must be clearly demonstrated that an overall development concept was envisioned by the original owner of the parent tract. This understanding should also have been made apparent to the original purchasers of lots in the development. The concept is most commonly applied to infer the existence of restrictions of subdivision lots where the drafter of a deed may have inadvertently neglected to include reference to a restrictive covenant or to some other document that was intended to affect the rights of property owners within the subdivision.
Rights inferred from a common scheme may resemble positive easements allowing use of common areas, walking trails or utility easements. However, claims regarding restrictions are often more problematic in situations where purchasers of a lot may be unaware of limitations placed on the potential uses of their tract.
Depending on jurisdiction, the court may consider restrictions created by a common scheme to be negative easements or implied equitable servitudes. The latter are described by the Iowa court as: “restrictions as servitudes upon the land similar at least to easements and profits…” 1 As is the case with easements appurtenant, the Iowa court considers the servitude to run with the associated tract once created.
A common scenario for common scheme disputes involves buyers of a subdivision lot with no apparent restrictions included in their deed. When neighbors complain of inappropriate use of the land, the buyers point to the lack of any written restrictions in their chain of title. Neighbors may, for instance, dispute the presence of a prefabricated housing unit in a development where restrictions on other lots clearly spell out prohibitions against that type of housing within the development. Other cases have dealt with restrictions against business use of lots intended only for residential use.
An early Ohio decision explains the rationale behind the doctrine and the general requirements: “Where the owner of a tract of land adopts a general scheme for its improvement, dividing it into lots and conveying these with uniform restrictions as to the purpose for which the land may be used, such restrictions create equitable easements in favor of the owners of the several lots which may be enforced in equity by one of such owners. Such restrictions are not for the benefit of the grantor only, but for the benefit of all purchasers. The owner of each lot has, as pertinent to his lot, a right in the nature of an easement upon the other lots which he may enforce in equity. Whether such restriction creates a right which inures to the benefit of purchasers, is a question of intention. And to create such a right, it must appear from the terms of the grant, or from the surrounding circumstances, that the grantor intended to create an easement in favor of the purchasers. The fact that like restrictions have been inserted in all the deeds of the grantor conveying adjacent land is a circumstance to be considered as tending to show that the restrictions were for the benefit of all the lots conveyed as well as those retained by the grantor.” 2
Common Scheme Applied with Caution
Courts are generally reluctant to use the common scheme doctrine to impose restrictions on the free use of property. As a result, this principle will not be applied by the courts unless there is a clear intent of an overall plan. The high evidentiary standard applied by the courts is amply illustrated by the numerous claims that have failed due to lack of sufficient evidence.
The application of the doctrine will generally be defeated by significant evidence demonstrating that restrictions were applied to individual sales in a haphazard manner. In addition, there may be indications that the developer’s intent changed during the course of the lot sales, particularly where several phases of development occurred. Where later deeds uniformly include restrictions but earlier conveyances do not, the doctrine will probably not be applied to restrict earlier sales.
Many surveyors will be familiar with major developments where different parcels are subject to varied restrictions based on location, configuration, designation or lot size. It is not uncommon for later phases within a major project to be subject to additional restrictions (or fewer, in certain circumstances). The common scheme doctrine generally will not be applied in these situations, as the intent was clearly to subject different parcels to different standards.
While some restrictions or covenants may be of little concern to the surveyor, those that impose easement-like rights on a tract are of more immediate concern. Restrictive covenants may describe drainage and utility easements not shown on the subdivision plat, mandate minimum setbacks, or designate strips of land for sidewalks.
Campbell v. Nickerson: considers a division of land initiated prior to the formation of the United States. In this instance, a group of proprietors voted to divide land and to permit all subsequent purchasers within the parent tract access over the other tracts so created. Both the votes to divide the land and to allow access were recorded in the proprietor’s books.
The Massachusetts court considered the question of whether the vote of the original proprietors to grant access would also apply to smaller lots created by re-subdivision of the original lots at a later date.
Despite the early origins of the division (circa 1711), the courts applied the common scheme doctrine to protect the rights of the current owner of a small portion of the original tract for access over an existing road. The Massachusetts Appeals Court notes: “The judge correctly reasoned that the proprietors intended the rights of passing over the lots to apply to future divisions of the land, and that those rights were established in a manner comparable to the later ‘common scheme’ doctrine.” 3
An in-depth discussion of Campbell v. Nickerson and its relationship with the common scheme doctrine may be found in “Easements Relating to Land Surveying and Title Examination,” by Donald A. Wilson.
Common Scheme Doctrine and the Meeting of Minds
While state laws mandate specific requirements and language for deeds of conveyance, these documents are ultimately expressions of the meeting of minds between grantor and grantee. Determining the intent as expressed by any document requires that the court consider each agreement in the light of the unique circumstances surrounding it.
A recent Virginia decision highlights this point: “In this case, to establish an equitable servitude, the plaintiffs must show that the Developer intended a common scheme of development for Little River Farms that restricted the use of the lots to single family residential; that this restriction was intended for the benefit of the residents in Little River Farms; and that the County had actual or constructive notice that the lots in Little River Farms were restricted to single family residential use. … An equitable servitude may be established based upon “a covenant or even an informal contract or understanding that certain restrictions” apply. … Here, there can be no doubt that there was an understanding that Little River Farms would be restricted to residential use.” 4
As is true in other areas of law involving the intent of the parties, the court will focus primarily on the surrounding circumstances at the time of the original development and sale of parcels. Subsequent acts by the parties may also be significant. In this instance, Judge McCahill emphasizes the importance of establishing the terms of the agreement between the grantor and those grantees who were parties to the relevant transactions. The Virginia court ultimately concluded that the restrictions found in the remainder of the subdivision also applied to the lone unnumbered lot in the development.
Where all parties in a development have constructive notice of an overall plan, the court may enforce negative easements or restrictions on the parcels. An excellent example of this application is found in a Wisconsin ruling: “Where the general plan or scheme of an agreement restricts property to a certain use and prohibits other uses, it is immaterial whether the covenant runs with the land or not, where the agreement is made for the mutual benefit of all the land though held by different owners. In such case equity will enforce such servitude as between the several grantees of parts of the premises with notice.” 5
It should be noted that individual state courts vary somewhat in their willingness to apply the common scheme doctrine. Regardless of the jurisdiction, knowledge of the common scheme doctrine should give professional surveyors extra incentive to research restrictive covenants and record easements in subdivisions that show evidence of a common plan or scheme. At a minimum, existence of restrictions on numerous adjoining tracts within a single development should suggest further inquiry despite the omission of any reference in the client’s deed. Just because a restriction is not apparent in the client’s deed does not mean that it doesn’t exist.
- Thodos v. Shirk: 248 Iowa 172; 79 N.W.2d 733 (1956)
- Kuebler v. Cleveland Short Line: 20 Ohio Dec. 525 (1910)
- Campbell v. Nickerson: 73 Mass. App. Ct. 20 (2008)
- Oliver v. Loudin County: 85 Va. Cir. 15 (2011)
- Boyden v. Roberts: 131 Wis. 659; 111 N.W. 701 (1907)
Neither the author nor POB intend this column to be a source of legal advice for surveyors or their clients. The law can change over time and differs in important respects for different jurisdictions. If you have a specific legal problem, the best source is an attorney admitted to the bar in your jurisdiction.