Can restrictive covenants be terminated through amendment provisions? Swenson v. Erickson Explained

In Swenson v. Erickson, the Utah Court of Appeals addressed whether restrictive covenants allowing changes “in whole or part” include the power to terminate the covenants entirely. The decision provides important guidance on interpreting covenant amendment provisions and timing requirements for covenant modifications.

Background and Facts

The Quail Point Subdivision restrictive covenants provided that they would be “automatically extended for successive periods of 10 years unless by vote of a majority of the then owners of the building sites covered by these covenants it is agreed to change said covenants in whole or part.” On January 1, 2004, at the end of a ten-year period, subdivision lot owners voted between 12:00 p.m. and 2:00 p.m. to terminate the covenants. The Swensons challenged this termination, arguing that the covenants only allowed for amendments, not complete termination, and that the vote occurred too late because the covenants automatically renewed at 12:01 a.m.

Key Legal Issues

The court addressed two primary issues: (1) whether the power to change covenants “in whole or part” includes the power to terminate them entirely; and (2) whether the timing of the vote was effective under the covenant terms and the Utah Supreme Court’s prior decision in Swenson I.

Court’s Analysis and Holding

The court held that the power to change covenants “in whole” includes the power to terminate or extinguish them entirely. Applying principles of contract interpretation, the court looked to the plain language and the parties’ intent. The court also found that nothing in the covenant language or the Utah Supreme Court’s prior decision required a strict 12:01 a.m. deadline. Since the vote occurred on the specified date (January 1, 2004), it was effective to terminate the covenants.

Practice Implications

This decision demonstrates that courts will interpret restrictive covenant amendment provisions broadly to include termination power unless expressly limited. For practitioners, the case highlights the importance of precise drafting when specific timing requirements are intended. The court’s approach favors practical flexibility over technical restrictions, consistent with the principle that restrictive covenants are strictly construed in favor of free use of property.