The Legal Intelligencer
(by Anna Jewart and Krista-Ann Staley)
Zoning regulations, although important, are not the sole restrictions on land use. Property owners and a variety of entities may agree to impose additional private restrictions on specific pieces of land. These private restrictions can create confusion regarding who, between the parties to the agreement and the municipality, has the authority to interpret and enforce their terms. The Pennsylvania Commonwealth Court recently issued a detailed, albeit nonprecedential, opinion addressing this type of scenario in Naylor v. Board of Supervisors of Charlestown Township, No. 659 C.D. 2018 (Pa. Cmwlth. Jan. 7, 2021). In Naylor, the court addressed a decades-long disagreement over the scope of a conservation easements. Among its holdings, the court concluded a township did not have standing to enforce a private conservation easement, even when it owned a separate parcel subject to the same easement. Naylor is a good reminder that municipal regulations and private agreements are distinct matters with independent enforcement mechanisms.
Easements are a common form of private land use restriction. An easement is a nonpossessory interest of a holder in real property, imposing limitations or affirmative obligations on property called the “servient” estate. Conservation easements are designed for certain “conservation” purposes, such as protecting the natural or scenic values of real property; assuring its availability for agricultural, or recreational use; protecting, or managing the use of natural resources; or maintaining land, air, or water quality.
In Pennsylvania, conservation easements receive certain statutory protections under the Conservation and Preservation Easement Act, 32 P.S. §§5051 et seq., (Easement Act). Enacted in 2001, the Easement Act sets forth requirements for the interpretation, construction and enforcement of conservation easements. Conservation easements created before the Easement Act are typically reviewed under the common law rules of construction, the same rules applicable to contract interpretation.
Naylor involved a long history of disagreement over a conservation easement on a historic farm in Charlestown Township. The current owners, the Naylors, wanted to build a home on their property, once part of a larger tract known as the Baughman Farm (farm). The prior owner (grantor) placed the farm into a conservation easement with a trust in 1986 (easement). The easement served to preserve the farm and its agricultural, historic, scenic, and relatively natural state. It specifically noted the presence of a historic mill (mill), and a Victorian home (Victorian house), and prohibited the construction of “new or additional buildings or structures unless necessary for agricultural purposes.” Shortly after the easement became effective, a fire destroyed the Victorian house. The grantor demolished the ruins and planted grass over the site.
Over the next 20-or-so years, the farm became a contentious issue between the grantor, the trust, the township and prospective buyers, including the Naylors. During that time, the grantor conveyed the farm to a foundation, which then subdivided the farm and conveyed the portion containing the mill to the township. The foundation later approached the Naylors, about purchasing the remaining 41.60 acres (property). The Naylors expressed interest, but only if they could build a single-family home (replacement house) on the property.
The Naylors, trust, foundation and township disagreed over whether the easement permitted the proposed construction and, if so, where. The township took the position that the Naylors could not build on the property at all, and certainly not outside the footprint of the Victorian house. The trust ultimately agreed with the township’s position.
In 2014, the Naylors filed an action seeking various declarations regarding their rights to build the replacement house. They also sought a declaration that township’s only role was to process the building permit application, and to enjoin the township from interfering with the proposed construction. Both the township and the trust participated in the procedural battle before the trial court that ensued over the next two years. After the trial court issued rulings largely in favor of the Naylors the township and the trust appealed to Commonwealth Court.
Before the Commonwealth Court, the township and trust argued the trial court erred by ruling the township did not have standing to enforce the easement. Specifically, they argued the township, as a fee simple owner of the subdivided portion of the farm containing the mill, was burdened by the easement, and consequently had statutory standing to challenge a violation of that easement under the Easements Act.
Section 5(a) of the Easements Act, 32 P.S. Section 55055(a), identifies persons who have standing to bring legal action to enforce a conservation easement. The list includes the owner of the property burdened by an easement; a person that holds an estate in that property; a person that has any interest or right in that property; a holder of the easement; a person having a third-party right of enforcement; a person otherwise authorized by federal or state law; the owner of certain affected coal interests. The court held that the township did not fall within any of those categories, because the lot it owned, while burdened by the easement, was an independent and distinct parcel of land. It specified that the Easements Act only allows third-party enforcement by those to whom the easement has granted enforcement rights. Because the terms only conveyed that right to the trust, the court found the trial court did not err in holding the township lacked standing in the matter.
Eventually, the court turned to the interpretation of the easement. It determined, because the easement predated the Easement Act, it should be reviewed under the common law rules of construction. As discussed by the court, under applicable contract law, the fundamental rule of construction is determining the intention of the parties as manifested by the language of the written instrument. Where the words of the easement are clear and unambiguous, the intent of the parties must be determined exclusively from the agreement itself.
The court reasoned the easement did not restrict, directly or by inference, the location for a Replacement House and permitted the addition of buildings and other improvements “as may be necessary for agricultural purposes.” Thus, it found the exact location of the Replacement House was immaterial to the easement and not at all restricted. The court also concluded there were no restrictions in the easement regarding the style, size, configuration or construction of the replacement house.
The court also addressed whether the easement required the trust or township’s pre-approval of the location, development plan and construction of the replacement house. The court found the terms of the easement did not give the trust or the township the authority to approve or disapprove any improvements to the Farm but did give the trust the right to enforce the easement. Consequently, the court found the trust had the authority to enter upon the property to inspect for violations of the easement and to file suit to enforce its terms; however, the easement did not vest the township or the trust with any preemptive gatekeeping role.
Although nonprecedential, Naylor reinforces the separation between zoning regulations and private land use restrictions; municipal entities have the authority to interpret and enforce the former but require standing to interpret and enforce the latter. Even in this peculiar setting, where the local government owned property subject to the easement at issue, the court was unwilling to extend its local regulatory power to the interpretation or enforcement of its terms. Although they are separate issues, it is not uncommon for private property issues, such as those relating to easements, licenses, and deed restrictions, to come up in the context of municipal permitting. For example, objectors to a project may appear at a zoning hearing meeting to argue the proposed use violates a private easement. Naylor serves as a reminder that these private real estate issues are squarely within the jurisdiction of the court, not the municipality, to be determined in the context of quiet title, ejectment, trespass and similar claims. As such, evidence relating to the scope and applicability of private real estate agreements is immaterial and irrelevant to a zoning proceeding. Consequently, parties seeking to enforce private real estate agreements should turn to the courts, not municipal staff, zoning boards, and governing bodies hearing zoning cases, for relief.
Krista M. Staley is a shareholder in the public sector services and energy and natural resources groups of the Pittsburgh law firm of Babst Calland Clements & Zomnir. In these capacities, Staley focuses her practice on representation of diverse private and public sector clients on land use and other local regulatory matters. Contact her at kstaley@babstcalland.com.
Anna S. Jewart is an associate in the firm’s public sector services group and focuses her practice on zoning, subdivision, land development, and general municipal matters. Contact her at ajewart@babstcalland.com.
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Reprinted with permission from the February 11, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.