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The Friendly Neighborhood Scheme

You have lived happily in your home for years, content with the fact that all the houses on your street appear the same from the outside. A deed restriction that applies to all the homes on the street, helps make sure the neighborhood looks consistent and uniform throughout. But then, a new neighbor comes in, and decides to try to break up the property to squeeze in another home. Can you enforce the deed restriction? The answer is likely yes.

On October 29, 2021, the Appellate Division in an unpublished decision affirmed the enforceability and concept of the neighborhood scheme. Cherry v. Hadaya, Docket No. A-0384-19, slip op. at 2 (App. Div. October 29, 2021).

Usually, only the parties to a deed restriction can enforce the restriction. In other words, only the person who established the deed restriction could enforce the deed restriction against the person who agreed to the restriction. However, the concept of a neighborhood scheme allows all neighbors who are subject to the same restriction the ability to enforce the deed restriction.

A neighborhood scheme is where a deed restriction (1) applies to all lots of like character within the scheme, (2) are a benefit to all lots involved that are subject to the restrictions, and (3) are reasonably uniform as to the restrictions imposed. Olson v. Jantausch, 44 N.J. Super. 380, 386 (App. Div. 1957).

If these elements are met, a neighbor would then have standing to enforce the deed restrictions on another neighbor even if there was no other relationship between the two parties.

In this case, the plaintiffs sought to enforce a deed restriction on defendants. The defendants purchased a property and applied for two subdivisions that would have allowed them to build three homes instead of one. However, the subdivision would have resulted in three properties that had smaller street frontages than the deed restriction permitted.

The court found that the plaintiffs who were subject to the same deed restrictions had standing to enforce the deed restriction against defendants. In doing so, the court found that the deed restriction established a clear intent to establish uniformity in frontage requirements. The court further held that complete uniformity is not required, as long as the restrictions vary in accordance with the design of the original grantor.

In addition, the court noted that the successor property owners in the neighborhood had all continued to abide by the deed restriction. Therefore, it was evident that the neighborhood scheme had not been abandoned. As a result, the court entered an order enforcing the deed restrictions and reversing the subdivision approval.

If the properties in your neighborhood are subject to the same deed restriction, you too may have an enforceable neighborhood scheme.

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