## Facts

- A residential development was built around a centrally located golf course that was presented as a key amenity intended to benefit surrounding lot purchasers and their successors.
- The developer recorded plats and recorded restrictions on residential lots that repeatedly referred to “golf course property,” including setbacks from the course and limits on fences/walls to protect views.
- No separate recorded instrument expressly restricted the golf-course parcel itself to golf-course use.
- The golf course was marketed to homebuyers as a long-term feature; many buyers testified they relied on the golf course and related assurances in purchasing their homes.
- The golf course was operated continuously for years by an entity formed to maintain and operate it.
- The golf-course parcel was later sold to new owners who intended to develop it for non-golf uses, eliminating or substantially altering the course.
- Homeowners and a homeowners’ association sued to declare and enforce an implied restriction limiting the parcel to golf-course use and to enjoin inconsistent development.
- The trial court found an implied covenant/equitable servitude restricting the parcel to golf-course use for a defined term and found the new owners were on notice; it enjoined non-golf development for the term.
- The new owners appealed, arguing no enforceable restriction existed without a recorded covenant burdening the parcel and claiming bona fide purchaser status without notice.

## Issues

1. Whether a restriction limiting a golf-course parcel to golf-course use may be implied from a subdivision’s common plan, recorded plats, recorded lot restrictions, and buyer reliance, despite the absence of a recorded covenant burdening the parcel.
2. Whether subsequent purchasers of the golf-course parcel took subject to the implied restriction because they had actual, constructive, or inquiry notice, defeating bona fide purchaser status.
3. Whether enforcement of such an implied restriction is barred by the Statute of Frauds or recording statutes.

## Decision

- The appellate court affirmed the injunction enforcing an implied restriction requiring the parcel to remain a golf course for the stated term.
- The court held that the subdivision’s common plan and circumstances supported an implied covenant/equitable servitude benefiting surrounding lot owners.
- The court held the purchasers were not bona fide purchasers without notice because the development’s physical configuration and recorded documents were sufficient to place them on at least inquiry notice.
- The court rejected Statute of Frauds and recording-statute objections where the servitude was implied from a combination of recorded materials and circumstances and was enforced in equity against purchasers with notice.

## Legal Principles

- A restrictive obligation may be implied and enforced as an equitable servitude when a development is created under a common plan in which a parcel is intended to serve as a continuing amenity for the benefit of surrounding lots, and purchasers buy in reliance on that plan.
- The absence of an express recorded restriction on the servient parcel is not dispositive if the common plan and surrounding recorded restrictions and circumstances indicate the intended limitation and the servient owner took with notice.
- Notice sufficient to bind a purchaser may arise from recorded plats and recorded lot restrictions referencing the amenity parcel, from the physical layout and visible use of the property, and from facts that would prompt a reasonable purchaser to investigate further (inquiry notice).
- A purchaser may be charged with notice of use restrictions evident upon inspection of the property and its surrounding development, even if the restriction does not appear as a direct recorded encumbrance on the servient parcel.
- Equitable enforcement may be available to prevent unfairness to purchasers who relied on the common plan when later purchasers acquire the burdened parcel with notice.

## Conclusion

The court upheld an injunction preventing non-golf development because the subdivision’s common plan and recorded lot restrictions implied an equitable servitude limiting the central parcel to golf-course use, and the purchasers took the parcel subject to that restriction due to inquiry and constructive notice.


Shalimar Ass'n v. D.O.C. Enters., Ltd., 142 Ariz. 36, 688 P.2d 682 (Ct. App. 1984)