Changed circumstances or changed conditions is typically applied when a party argues that modification or termination of a covenant has occurred, and is therefore no longer enforceable, because of changed conditions. It may also be called frustration of purpose, meaning the purpose of the covenant has been frustrated and is now valueless because of changes that have occurred since the covenant was adopted.
- Covenant is Valueless. "[I]n order to render a restrictive covenant unenforceable the change must be so great that it clearly neutralizes the benefits of the restriction to the point of defeating its purpose, or of such a nature that it renders the covenant valueless." Crimmins v. Simonds, 636 P.2d 478, 479 (1981). Thus, the test is stringent: relief is granted only if the purpose of the servitude can no longer be accomplished. When servitudes are terminated under this rule, it is ordinarily clear that the continuance of the servitude would serve no useful purpose and would create unnecessary harm to the owners in the development. See Restatement Third, Property (Servitudes) § 7.10 Com. a.
- The Development Has Fundamentally Changed. "In addition, the existence of several breaches of a restrictive covenant does not justify refusal of enforcement unless the character of the neighborhood has changed." Id. at 480.
- Owners Are Entitled to Rely on Covenants. Courts are very reluctant to find changed circumstances because "[p]ersons who own property in a neighborhood subject to restrictive covenants are entitled to rely on the covenants according to their terms, even if some of their neighbors no longer desire their enforcement." Id. at 481. In fact, of the many changed-conditions cases that have produced appellate decisions,
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(For reference: 57-8 is the Condo Act, 57-8a is the Community Association Act, 16-6a is the Nonprofit Act)