Interpreting Conservation Easements and When New Structures are Allowed

The article is not a substitute for legal advice.

The Court of Special Appeals of Maryland recently reversed the Circuit Court for Howard County’s granting of summary judgment involving how to interpret a conservation easement. At issue in the decision is whether the easement allowed for additional residences to be built on the preserved farmland beyond the existing four residences when the easement was granted. The easement permitted additional structures supporting continued agricultural use of the land to be built. The new owners argued that the new house was an “additional structure” and should be allowed. The decision is in Roxbury View, LLC v. McCauley.

Background

In 1978, the Chases conveyed a conservation easement over 285 acres in Howard County to the Maryland Environmental Trust (MET). When the easement was conveyed, the property included the main residence, guest house, a swimming pool near the main residence, a farmhouse, a tenant house, a large barn with two silos, a loafing shed, a large herringbone milking parlor, and two storage sheds.

Within the easement, the Chases and future owners of the farmland would be unable to construct new buildings, facilities, or structures, unless one of four conditions were met: 1) if the new construction replaces a preexisting structure on the property and is the same size, bulk, and height or floor area as the structure it is replacing; 2) if the new construction is an addition to an existing structure; 3) if the construction is necessary for and directly related to the continued agricultural use of the property; or 4) if the construction was designed or utilized to support the residents of one of the existing residences on the property, such as a pool, tennis court, tool shed, garage, or gazebo.

In 1979, subdividing the Chase property began, with the Chases conveying 261 acres to the Zepps and retaining the remaining 28 acres. The Zepps property became Lot 1 and Chase property Lot 2. Lot 2 contained the Chase main residence and guest house. Lot 1 contained the farmhouse and the tenant house. In 1994, the Sharps, who requested and obtained MET approval to rebuild the tenant house (which was no longer standing), purchased Lot 1. The Sharps never rebuilt the tenant’s house, however. In 1996, the Sharps subdivided Lot 1 into Lots 3, 4, and 5, so that Lot 1 no longer exists. In 2012, the Sharps subdivided Lots 3 and 5 into Lots 6, 7, and 8, and Lots 3 and 5 no longer existed. In 2018, Lots 4, 7, and 8 were sold to Roxbury View, LLC. Roxbury View entered into agricultural leases on the property and hired a farm manager to support the operations leasing the lots. Lot 4 contains the site of the farmhouse and the former tenant house.

In 1995, the Kleins bought Lot 2 and sought and received approval to rebuild the guest house destroyed by a fire on the lot. At no time, however, did the Kleins rebuild the guest house. Lot 2 currently contains only the main residence; and the guest house was not rebuilt.

In 2018, Roxbury View sought MET approval to construct three replacement dwellings on Lots 4, 7, and 8. Roxbury wanted to replace the farmhouse on Lot 4, the tenant house on Lot 4 but move it to Lot 8, and rebuild the guest house on Lot 7 that was originally on Lot 2. Roxbury argued that replacement dwellings according to the easement were not required to be in the exact location. Roxbury later withdrew its request to replace the guest house on Lot 7. MET approved a replacement farmhouse on Lot 4 and a tenant house on Lot 8. MET stated in the approval the total number of dwellings allowed on Lots 4, 7, and 8 is two.

Although Roxbury had withdrawn approval to build a house on Lot 7, they began construction of a new dwelling on Lot 7. Roxbury View argued that the residence would be allowed under the terms of the conservation easement in paragraph 3 which allowed for the construction of necessary new structures directly related to the continued agricultural use of the property. MET sent a notice of violations of the easement for the construction to Roxbury View, but the building continued. Finally, the house was completed and leased to the farm manager. The lease required the farm manager to watch the property, routinely inspect it, and make repairs as needed.

The current owner of Lot 2 filed a lawsuit against Roxbury View and MET for the new construction. MET countersued Roxbury View for violating the terms of the easement and requesting a declaration that Roxbury View violated the easement terms by constructing a house on Lot 7. The circuit court granted MET’s motion for summary judgment, declaring that Roxbury View violated the easement terms. The new residence had to be removed and demolished within six months of the court order. Roxbury appealed the court order.

Court of Special Appeals Decision

The main focus of the court’s opinion is on a procedural issue not of much interest to us. We will focus more on the circuit court’s decision to grant summary judgment in favor of MET. In reviewing the lower court’s decision, the court must determine if the easement is unambiguous and not susceptible to two reasonable interpretations. In reviewing the record, the court finds the easement to be ambiguous because a reasonable jury could find that easement does not prohibit the construction of a house on Lot 7.

In looking at Paragraph 3 of the easement, the terms limit structures to those existing in 1978 and any necessary structure to support continued agricultural use of the property. In reviewing Paragraph 3, residences are included in the definition structure. A reasonable person could interpret Paragraph 3 to allow an owner to construct a new residence necessary to support the continued agricultural use of the property. Within the record, the court could point to evidence from the tenants leasing farmland from Roxbury that the farm manager living on the property helped deter equipment theft and assist in knowing about issues with livestock on the property. There was also evidence to suggest that Roxbury was on the record of wanting three houses on each of the lots. Either way, a jury should be allowed to hear the evidence and weigh the credibility of the evidence in making a decision. For those reasons, the court reverses the lower court’s decision.

The Court of Special Appeals decision could still be appealed to the Court of Appeals. At the time of this overview, that had not happened. We know the motion for summary judgment has been reversed, and the circuit court will have to start working through this case again.

References

Roxbury View, LLC v. McCauley, №235, Sept. Term, 2021, 2022 WL 1091684 (Md. Ct. Spec. App. Apr. 12, 2022).

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