Contract Interpretation in Texas: Deed Restrictive Covenants

In, Texas, the law concerning contract interpretation is well-settled. When construing a written contract, the primary concern is to give effect to the true intent of the parties as expressed in the instrument. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). If a written contract is worded in such a way that it can be given a definite legal meaning, then the contract is not ambiguous. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). If the contract is unambiguous, the court must enforce the contract as written. Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 (Tex. App.--Houston [1st Dist.] 2000, pet. denied).

This general contract interpretation rule applies to covenants under deed. Restrictive covenants are subject to the same general rules of construction as contracts. Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998). Like a contract, a restrictive covenant is unambiguous if it can be given a certain or definite legal meaning. Id. Whether restrictive covenants are ambiguous is a matter of law for the court to decide. City of Pasadena v. Gennedy, 125 S.W.3d 687, 692 (Tex. App.--Houston [1st Dist.] 2003, pet. denied).

Public Policy on Restrictive Covenants.

At common law, covenants restricting the free use of land are not favored, but will still be enforced when they are confined to a lawful purpose and are clearly worded. Id. at 693. All doubts concerning a restrictive covenant's terms are resolved in favor of the free and unrestricted use of the land, and any ambiguity must be strictly construed against the party seeking to enforce the covenant. Id. The Texas Property Code states that "[a] restrictive covenant shall be liberally construed to give effect to its purposes and intent." Tex. Prop. Code Ann. § 202.003(a) (Vernon 2007).

HOA Declarations and restrictive covenants are a good example. Typically, homeowners, homeowner's associations and vise-a-versa encounter disputes as to deed restrictions. HOA declarations and covenants should be clearly written so as to avoid differing opinions as to its interpretation. When there is a dispute as to an interpretation of a covenant or restriction under a deed or real property right, it is likely that the language in the contract is ambiguous. When this occurs, the proper remedy, or at least one of the legal remedies, is for a declaratory ruling by a court for a proper interpretation under the Texas Declaratory Judgments Act. Consult an attorney if you are a homeowner or homeowner association, should a dispute arise on the proper application of a deed restriction or covenant.