For many years we have struggled in North Carolina with the absence of case law that clearly, unequivocally and succinctly states a common law obligation for a lot owner in a subdivision to contribute the reasonable pro rata cost of road maintenance where the covenants make no provision for such. In this case, membership in the plaintiff Property Owners' Association ("POA") is voluntary. The POA was established in 1985 to maintain Tanglewood's common areas and private streets after the lots within the subdivision were conveyed, and, thus, membership is not compulsory. Following establishment of the POA, the developer of the subdivision deeded all common areas and private roads to the POA. Some areas within the subdivision are reserved for members only, all property owners may use the boat ramp, parking lot, and private streets. Members of the POA are assessed annual dues, which also covers maintenance. The POA appealed trial court rulings determining that the defendant lot owner did not owe it for the owners' pro rata share of the cost of road maintenance.
On appeal, the POA contended that the trial court erred in two respects. First, by finding that the defendants own an easement by necessity, limited solely to the subdivision roads necessary for access to their lot because the POA contended that the defendants own an appurtenant easements in all "streets, ditches, public areas, ICW (Intracoastal Waterway) water access and boat ramp" as their lot had been conveyed by reference to the subdivision plats; and second, by concluding that the defendants' pro rata share of the maintenance cost of their easements could not be calculated.
Much of the factual and procedural history set out in the opinion is unnecessary to understanding the significance of the decision to real property practitioners and we will accordingly limit the summary to the facts essential to that purpose. That said, the Court's recital and footnoted commentary is illuminating and worth reading.
In 2014, the POA filed a declaratory judgment action seeking a declaration of the parties' respective rights and obligations concerning "the streets, ditches, public areas, ICW water access and boat ramp" located in the subdivision pursuant to the recorded subdivision plats. The opinion states that the POA "asserted the following arguments: (1) when property is conveyed by deed, referencing a plat depicting common areas, an easement over the common areas is held by the purchaser; 2) in accordance with the acquired easement rights, the easement holder possesses a duty to maintain their easement, which is irrespective of the easement holder's actual use of the easement; (3) the pro rata share of maintenance is then calculated based upon a per lot basis, with the number of lots determined at the time of conveyance, irrespective of any subsequent lot consolidation; and (4) accordingly, Defendants hold an easement over "the streets, ditches, public areas, intracoastal waterway access, and the boat ramp" pursuant to their deed and possess a duty to maintain their easements based upon ownership of two lots."
The defendants' assertions were stated to be:
"(1) with the exception of the roads necessary to gain access to their property, they do not use the easements depicted on the plat; (2) use of some of the alleged easement areas, including the boat ramp and picnic shelter, is restricted to member use; 3) they are willing to contribute to the maintenance of the roads, but as a result of this dispute have been 'forced to join an association [they] don't want to be a member of'; (4) members are assessed less and afforded greater benefits within the community, with their dues calculated on a per owner basis and not on a per lot basis; and (5) their two lots were combined into one per the 'direction of the Brunswick County Central Permitting[.]'"
The trial court entered judgment and concluded the following:
(1) Defendants do not possess any easement "in the private streets, ditches, boat ramp, ICW water access and parking lots in Tanglewood West" pursuant to their general warranty deed or the Tanglewood West plat;
(2) Defendants possess an easement by necessity over Lake Peggy Circle and West Tanglewood Drive SW to gain access to their property;
(3) Defendants possess "a duty to provide their reasonable pro rata share" for the maintenance of their easement over Lake Peggy Circle and West Tanglewood Drive SW;
(4) Defendants do not possess any easement over "any other private street, ditch, boat ramp, ICW water access, parking lot, pier, gazebo, or any other common area including those shown on the plats of Tanglewood West, Tanglewood East, and Windy Point Park" and are, therefore, not liable for maintenance of those areas;
(5) based on the evidence presented, Defendants' pro rata share for the 2013 maintenance of their easements cannot be determined and Defendants are, therefore, not liable to POA for the 2013 maintenance of their easement; and
(6) Defendants, or their successors in title, shall pay for their "annual, reasonable pro rata share of the maintenance costs," which shall be calculated based upon the two lots initially conveyed to Defendants, for 2014 and "until such time as Lake Peggy Circle and/or West Tanglewood Dr. SW is owned and maintained by the North Carolina Department of Transportation as a public road."
The Court of Appeals agreed with the Power of Attorney's contention that the trial court erred in denying summary judgment holding that the defendants possess easements citing the well-established line of cases holding that
..."appurtenant easements implied by plat are recognized in North Carolina and that "where lots are sold and conveyed by reference to a map or plat which represents a division of a tract of land into streets, lots, parks and playgrounds, a purchaser of a lot or lots acquires the right to have the streets, parks and playgrounds kept open for his reasonable use, and this right is not subject to revocation except by agreement. It is said that such streets, parks and playgrounds are dedicated to the use of lot owners in the development. In a strict sense it is not a dedication, for a dedication must be made to the public and not to a part of the public. It is a right in the nature of an easement appurtenant. Whether it be called an easement or a dedication, the right of the lot owners to the use of the streets, parks and playgrounds may not be extinguished, altered or diminished except by agreement or estoppel. This is true because the existence of the right was an inducement to and a part of the consideration for the purchase of the lots. Thus, a street, par k or playground may not be reduced in size or put to any use which conflicts with the purpose for which it was dedicated." (citations omitted).
The Court stated that the general rule governing easement maintenance is:
"'in the absence of contract stipulation or prescriptive right to the contrary, the owner of an easement is liable for the costs of maintenance and repairs where it exists and is used and enjoyed for the benefit of the dominant estate alone . . . .' ... '[T]he owner of the servient tenement is under no duty to maintain or repair it, in the absence of an agreement therefor.'... This duty of maintenance exists in the context of implied easements, specifically easements implied by plat. Furthermore, an easement holder's share of maintenance may be calculated on a pro rata, per lot basis." (citations omitted)
The POA's asserted according to the Court, that "that an easement holder's duty of maintenance exists completely irrespective of use..." The opinion states that this mischaracterizes the opinion in Lake Toxaway Cmty. Ass'n, 226 N.C. App. at 492 (2013) which discusses an easement holder's duty of maintenance and cites to Lamb v. Lamb, 177 N.C. 150, (1919) which uses the phrase; "and is used and enjoyed". The Court said that this phrase "would be rendered meaningless if an easement holder's duty of maintenance exists completely irrespective of use."
However, although the defendants contended that they only use the roads necessary for ingress and egress, as in Lake Toxaway, "a portion of Defendants' easement is, indeed, used." The opinion states that although the defendants "may not currently use some of the easement areas, as easements appurtenant, Defendants' rights to these areas will run with the land and add value to Defendants' property. ... Thus, Defendants are conferred a benefit, even if they do not currently use all of the easement areas. In accordance with this Court's precedent, we hold Defendants, as property owners in Tanglewood West, possess a duty to maintain their easements ..." (citations omitted)
The pleadings and briefs alleged varying costs and computations for deriving the pro rata cost of maintenance, but the result in the opinion is to apply basic accounting principles. One matter of significance was that although the POA was free to enter into an agreement with the developer whereby lots retained by the developer were not assessed additional maintenance costs, those lots could not be excluded from the total number of lots used to determine the pro rata share of maintenance costs apportioned to the defendants' lots.
In addition, since the defendants "possess easement rights and duties for each lot owned. See Claremont Prop. Owners Ass'n v. Gilboy, 142 N.C. App. 282, 287, 542 S.E.2d 324, 327-28 (2001) (holding a real covenant that 'run[s] with the land' and imposes an affirmative obligation to contribute to road maintenance attaches to both lots owned individually, and consolidation of lots into one lot 'did not alter or negate the real covenants that had previously attached to each lot'). While Claremont was in the context of a real covenant that attached to the land and not an appurtenant easement, the reasoning applies equally in this context, as both attach to or 'run with the land.'" The results in each lot being taxed with maintenance costs irrespective of being combined for building code or ad valorem tax purposes.
The Court of Appeals remanded the case to the trial court to enter an order consistent with the opinion and to determine amount of maintenance costs owed by the defendants to the POA taking additional evidence if it deems necessary.
In a footnote the Court noted that more than twenty years elapsed where the POA maintained the easement areas and did not demand the maintenance contribution. "One might speculate whether such conduct constituted wavier. See Medearis v. Tr. of Meyers Park Baptist Church, 148 N.C. App. 1, 12, 558 S.E.2d 199, 206-07 (2001) ("A waiver is implied when a person dispenses with a right 'by conduct which naturally and justly leads the other party to believe that he has so dispensed with the right.'") (quoting Guerry v. Am. Tr. Co., 234 N.C. 644, 648, 68 S.E.2d 272, 275 (1951)). Since this issue was not raised at trial or on appeal, it is unclear whether Defendants, pursuant to the plat, inquired what maintenance duties they would be charged with prior to acquiring their property. Conceivably, they would have been informed that this duty had been assumed by POA. However, the issue of waiver was not presented to this Court, and, thus, we do not address it."