## Facts

- A mobile home subdivision was subject to a recorded declaration requiring each lot owner to pay a monthly recreation fee to the operator of an adjoining country club for the right to use its facilities.
- The declaration stated the fee obligation and related restrictions ran with the land and bound successive owners for the declaration’s term.
- The duty to pay was not contingent on actual use of the facilities.
- Palm Beach County acquired one lot by eminent domain for a road-widening project and took title subject to the declaration.
- After taking the lot, the County stopped paying the monthly recreation fee attributable to that lot.
- The country club operator sued for inverse condemnation, alleging the County’s taking of the lot destroyed its property interest in the lot’s associated fee stream.
- The trial court found a compensable taking on liability and reserved jurisdiction for a separate valuation proceeding.
- The district court affirmed and certified to the state supreme court whether the country club’s right to the fee stream was a compensable property right upon condemnation of the lot.

## Issues

1. Whether a covenant running with the land requiring monthly recreation-fee payments creates a compensable property interest for the covenant holder when the burdened lot is condemned for public use.
2. Whether condemnation of the burdened lot, coupled with cessation of payments, constitutes a taking of the covenant holder’s property interest remediable by inverse condemnation.

## Decision

- The court answered the certified question in the affirmative and approved the decision below.
- It held that, on these facts, the covenant-created right to receive monthly recreation fees tied to individual lots is a compensable property right in favor of the country club upon governmental condemnation of a burdened lot.
- The trial court’s liability determination for inverse condemnation remained in place, with valuation to be determined in further proceedings.

## Legal Principles

- A recorded covenant running with the land may create a vested, enforceable real property interest in favor of the covenant holder, including a right to future payments attributable to specific parcels.
- When government condemnation of a burdened parcel effectively terminates the covenant holder’s parcel-specific right to receive payments, the loss can constitute a taking of a compensable property interest.
- The characterization of the payment obligation as running with the land and not dependent on actual use supports treatment of the payment right as a property interest rather than a purely personal contract right.
- Inverse condemnation provides a remedy when governmental action results in a taking of a private property interest for public use without just compensation, even where the claimant is a third party holding a servitude-type interest.

## Conclusion

The court recognized that a covenant-based, lot-specific income right that runs with the land can be “property” for takings purposes and that condemnation of the burdened lot may require compensation to the covenant holder for the resulting loss of the associated fee stream.


Palm Beach Cnty. v. Cove Club Invs. Ltd., 734 So. 2d 379 (Fla. 1999)