Hill v. Community of Damien of Molokai

Supreme Court of New Mexico · Property

PropertyRestrictive covenantsSingle-family residenceFair Housing ActGroup homesrestrictive covenantsingle family residencegroup home

Facts

The Community, a private nonprofit corporation, leased a house in Four Hills Village to operate a home for four unrelated individuals with AIDS, each of whom required some in-home nursing care. The residents shared meals, supported one another socially, emotionally, and financially, and lived together in a family-like setting, while outside health-care workers and Community staff provided assistance and oversight. Neighbors on the same dead-end street claimed this use violated a covenant stating that no lot shall be used for any purpose other than single family residence purposes. The trial court also found that the home generated increased traffic that detrimentally altered the neighborhood's character.

Issue

Did the Community's use of the house as a group home for four unrelated individuals with AIDS violate the restrictive covenant limiting use to single-family residence purposes? If the covenant were interpreted to exclude the group home, would enforcing it violate the Fair Housing Act?

Rule

When construing restrictive covenants, courts resolve ambiguity in favor of free enjoyment of property, do not imply restrictions, construe covenants reasonably but strictly, and give words their ordinary intended meaning. Under that approach, an ambiguous single-family residence covenant does not exclude a group home where unrelated residents function as a relatively permanent family unit in a residential setting. Even if a facially neutral covenant were read to exclude such a group home, enforcement may violate the Fair Housing Act if it has a disparate impact on handicapped persons or if nonenforcement would be a reasonable accommodation necessary to afford equal housing opportunity.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a subdivision outside Santa Fe, a recorded covenant states that each lot may be used only for "single family residence purposes," but it does not define "family." A nonprofit leases a house to five unrelated adults with mobility impairments who have lived there for eighteen months, share meals and expenses, celebrate holidays together, and rely on rotating daytime aides who do not live there.

If neighboring owners sue to enjoin the use, which is the strongest argument that the house does not violate the covenant?

Explanation. The majority held that undefined use of the term "family" in a single-family residence covenant is ambiguous and must be construed in favor of free enjoyment of property and against restrictions. It also focused on whether unrelated residents bear the generic character of a relatively permanent functioning family unit. Here, communal living, shared expenses, stability, and a family-like lifestyle support compliance with the covenant. Nonprofit status does not create an automatic exemption, and outside aides do not automatically transform the home into a medical facility.