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Developers Beware: You May Have To Live With What You Agree To

Alan L. Stefaniak

In a recent Illinois Appellate Court opinion a developer’s predecessor in interest sought and was granted a special use permit for a residential development that required 96 acres of the property be maintained as a golf course or other open space. The ordinance granting the zoning required execution of a restrictive covenant that required maintenance of the open space for 35 years unless the covenant was released by vote of five of the seven members of the Village’s board of trustees. Several years later the developer’s successor in interest approached the Village and requested that it be allowed to amend the zoning to permit the closing of the golf course, reduce the open space from 96 acres to 51 acres and allow the construction of approximately 350 new residential units on the once golf course land. The Village declined to release the covenant and refused to refer the rezoning request to its planning and zoning commission.

The developer’s successor in interest brought a lawsuit seeking to void the restrictive covenant and disconnect the property from the Village or in the alternative to force the Village to allow it to apply for the rezoning. The trial court held the restrictive covenant was valid but allowed the request for disconnection.

On appeal the Appellate Court upheld the trial court’s decision. The Appellate Court reasoned that one cannot agree to conditions in order to obtain a special use permit, take advantage of the special use in developing a portion of the land and then dispute the validity of the conditions. According to the Appellate Court, development of the land by the successor in interest’s predecessor was an acceptance of the benefits of the covenant along with the agreement to be bound for 35 years unless five of the Village’s trustees voted to release the covenant. The Appellate Court held that the trial court was correct in holding that acceptance of the covenant’s benefits prohibits the successor in interest from seeking a release from the burdens of the covenant more that a decade later.

While the covenant regarding the open space was upheld, the Appellate Court also affirmed the trial court’s decision that the covenant did not stop disconnection of the property from the Village. The covenant made no reference to any obligation to keep the property within the Village’s jurisdiction. The parties stipulated that five of the six statutory criteria for disconnection were met. As to the sixth factor, that disconnection will not result in the isolation of any part of the municipality from the remainder of the municipality, the Village argued that an approximately half acre parcel used for a water pumping station would be isolated from the remainder of the Village if disconnection was allowed. The Appellate Court disagreed since the water station parcel was separated by a highway right-of-way owned by the Village and did not touch the disconnected property.

The Village also made a unique argument that in addition to the six criteria in the statute for disconnection that because the statute states “and that the area of land is entitled to disconnection” there has to be a finding that some additional basis exists for disconnection to be ordered. The Appellate Court disagreed and held that the only case where this was held to be a defense to a disconnection petition was where an owner sought disconnection after having voluntarily entered into an annexation agreement that required the land at issue to remain part of the municipality for twenty years. In rendering its decision the Appellate Court reiterated that the disconnection statute is to be liberally interpreted in favor of allowing disconnection.

In this case, it appears that the original developer’s successor in interest may have won the battle but lost the war One has to wonder what benefit flows from disconnection from the Village if the covenant requiring the open space has to be followed in any future development of the land. Further, development of the land as unincorporated property may not be as advantageous without certain municipal services. I wonder if a changed conditions argument may have helped the successor’s cause since it does not appear from the Appellate Court decision that this argument was made. The morale of the story is be careful as to what you agree to since you and your successors in interest may be bound to your agreement for some time to come.

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