Declarations of easements covenants and restrictions and reciprocal easement agreements are common tools used by neighboring businesses to define the use and maintenance of shared spaces – from parking lots and roofline heights to snow plowing and lighting. In many cases one party is allowed to incur an expense or make an improvement or repair with the permission of the other parties which permission “is not to be unreasonably withheld.” Since one party’s trademark chartreuse sign color may be another party’s worst nightmare, what’s “unreasonable” may not always be clear.
Many easements covenants and restrictions and reciprocal easement agreements include an arbitration provision in anticipation of such disputes. In the 2001 Maine case, V.I.P. v. First Tree Development, the court decided that an arbitration clause applied to all issues in an REA (not just to maintenance costs as the clause could have been read).
Businesses should consider identifying different dispute resolution techniques for the different types of activity and expense controlled by easement covenants and restrictions and reciprocal easement agreements. There are many alternatives to calling for arbitration to resolve these disputes, including:
Third-party expert opinions
Dollar-range limited arbitration