## Facts

- A developer recorded restrictive covenants governing “Limited Residential” lots in a planned resort subdivision on Hilton Head Island, South Carolina.
- The covenants required prior written approval of building and location plans before any construction and expressly permitted disapproval for “purely aesthetic considerations.”
- The developer created a nine-member Architectural Review Board (ARB) and issued written procedures and guidelines stating the goal of preserving high aesthetic and material standards.
- The guidelines identified aesthetic factors for review, including roof line, neighbors’ views, harmony with the area and natural surroundings, and landscaping.
- George F. Brown bought an unimproved lot subject to the recorded covenants and submitted plans to build a personal residence.
- The ARB twice rejected Brown’s plans on aesthetic grounds, including that the garage front and roof line overpowered the house and the design was not harmonious with the area.
- After discovering steps indicating imminent construction, the developer obtained a temporary restraining order and then a permanent injunction barring construction under the rejected plans.

## Issues

1. Whether a recorded covenant requiring prior written approval of building plans and permitting rejection for “purely aesthetic considerations” is valid and enforceable.
2. Whether the ARB acted reasonably and in good faith, rather than arbitrarily or capriciously, in disapproving Brown’s plans.

## Decision

- The South Carolina Court of Appeals affirmed the permanent injunction.
- The court held the aesthetic-based approval covenant was valid and enforceable when read with the development’s stated purposes and written guidelines.
- The court held the ARB’s disapproval was not arbitrary, capricious, or unreasonable because it relied on criteria identified in the guidelines (including roof line and harmony with surroundings).
- Prior approval of similar plans for other owners did not, by itself, establish unequal or arbitrary treatment on this record.

## Legal Principles

- Restrictive covenants conditioning construction on prior plan approval, including express aesthetic review authority, are enforceable in planned developments when consistent with a stated development plan and accompanying guidelines.
- An architectural review authority must exercise approval power reasonably and in good faith; it may not reject plans arbitrarily or capriciously.
- Aesthetic judgments may be upheld where the governing instruments supply an identifiable framework for review (e.g., harmony with surroundings, roof line, effect on neighbors).
- Equity may enforce valid covenants through injunctive relief to prevent construction that proceeds without required approval.

## Conclusion

The court upheld an architectural-control covenant allowing aesthetic disapproval and affirmed an injunction because the ARB applied the recorded covenants and written guidelines in a reasonable, good-faith manner when rejecting the homeowner’s plans.


Palmetto Dunes Resort v. Brown, 287 S.C. 1, 336 S.E.2d 15 (S.C. Ct. App. 1985)