Petersen v. Beekmeere, Inc.

Glendale Investments Corp. (Glendale) owned a tract of land with a lake that it subdivided into sections. Beekmeere, Inc. (the community association) (defendant) was a corporation formed to develop the subdivision’s land for recreational pursuits, sell merchandise, and operate a club for lot owners in real estate developments. Glendale conveyed the lake and an access lot in one of the sections to the community association, retaining an easement over two lots with access to the lake. Glendale then sold lots to purchasers with copies of a covenant annexed to the deeds. This covenant required each purchaser to purchase one share of the community association’s company stock for up to $100 and pay annual assessment fees. The covenant did not specify how the assessment would be calculated or limit the duration of the covenant. Additionally, the covenant did not specifically require the community association to spend the assessment fees only on the subdivision itself. Some of the original subdivision purchasers sold their lots to other buyers (the subsequent buyers) (plaintiffs), but covenants were not annexed to the deeds in all of these instances. However, the titles to the properties purchased by the subsequent buyers contained references to the covenant. Later, Glendale sold other lots that were not subject to the covenant, though some lots in each of the sections were subject to the covenant. The subsequent purchasers sued to void the covenant.