Court Opinion

ID: 8293070
Source: CourtListenerOpinion
Date Created: 2022-10-17 10:52:33.776152+00
Date Added: 2024-06-11T16:43:55.419084
License: Public Domain

Littlejohn, Acting Judge
(dissenting):
Initially I proposed an opinion reversing the order of the trial judge. A majority of the panel assigned to this appeal, now having taken a different view, I submit my original proposal with adaptations as my dissent.
Plaintiff-Respondent, First Federal Savings and Loan Association of Charleston (First Federal), brought this action to foreclose a real estate mortgage executed by Arthur N. Bailey and James Michael Manney (Mortgagors). Treeloft Villa’s Homeowners Association was made a party Defendant to the proceeding by reason of judgments for assessments arising *358after the mortgage was executed and recorded. The trial court issued its order of foreclosure and held that the mortgage of First Federal was superior to the judgments for assessments due the homeowners association. The homeowners association appeals. I would reverse.
FACTS
Heretofore in 1978 Seabrook Island Company owned a tract of land and proceeded to develop it as a residential subdivision. On June 30,1978, prior to sale of the lots, the owner executed a covenant for the benefit and protection of all of the purchasers of lots in the subdivision. Thereafter, Bailey and Manney executed a purchase money mortgage incident to purchase of a lot. Included in the mortgage was a provision as follows: “ ... this conveyance is subject to the provisions contained in the covenants of Treeloft Villa, Seabrook island, and by-laws of Treeloft Villa’s Homeowners Association recorded in the R.M.C. Office for Charleston County in book U 116, page 91.”
First Federal was well aware of the provisions of the covenant. Relevant portions of the covenant declaring the rights and responsibilities of the respective property owners are as follows:
Sea Island Company ‘... agrees on behalf of itself, its successors and assigns, with persons who shall hereafter purchase the lots as shown on the aforesaid plat(s) (or made subject hereto by deed or other written instrument) at Sea Island, their heirs and assigns as follows:
‘Common Properties’ shall refer to those areas of land, together with any improvement thereon which are deeded to the [Treeloft] Association and designated in said deed as ‘common properties’. All common properties are to be maintained, devoted to and intended for the common use and enjoyment of the owners of the lots shown on the plats.
PROPERTY RIGHTS IN THE COMMON PROPERTIES: Subject to the provisions of these covenants and the Rules and Regulations of the Association, every owner shall have a right and easement of enjoyment in *359and to the common properties, and such easement shall be pertinent to and shall pass with the title of every lot. MAINTAINED ASSESSMENTS: Each owner shall by accepting a deed therefor, whether or not it shall be so expressed in, such deed, agrees to all of the terms and provisions of these covenants, and to pay to the [Treeloft] Association; [here assessments involved in this case are enumerated].
DURATION AND AMENDMENTS: These covenants shall run with and bind the land and shall enure to the benefit of and be enforceable by the [Treeloft] Association, the Company or the owner of any lot subject hereto for a period of twenty years.
LAW/ANALYSIS
In deciding the sole issue on appeal, the Court must determine who is bound by the terms of the covenant. All persons who take, by reason of deed, are beyond question bound. In like fashion I would hold that one who takes through a mortgage is bound. I disagree with the contention of First Federal that inasmuch as the debt represented by the judgments arose after the mortgage was recorded, the mortgage lien has priority.
In holding that the mortgage of First Federal was superior to the assessment judgments, I think the trial court overlooked portions of the covenant known to First Federal. The covenant provided benefits and detriments to all lot owners. A purchaser, as well as a mortgagee, comes to have an interest in the common properties, and in turn is burdened by assessment obligations. First Federal can have no stronger position than one who claims through a deed.
Rights in common properties enhance the value of the mortgage, and in turn make the properties more valuable at foreclosure sale. By taking the mortgage with full knowledge of the covenant, First Federal agreed to be bound thereby.
The covenant required that the costs of maintaining the common properties be divided among all the property owners. I find nothing inequitable in saddling the mortgage holder with the costs incident to common properties in which it holds an interest and benefits therefrom. The costs of maintaining *360common properties must be assumed by either First Federal or allocated among all the other lot owners. A mortgagee can protect itself against the possibility of assuming assessments by adjusting the loan to fit the appraisal. Other owners of the common properties have no similar method of protecting themselves.
The facts here involved are not identical with the facts in Council of Co-Owners of Forest Beach Villa Horizontal Properties Regime v. Smith, et al., filed March 7, 1994 and reported in Davis’ ADVANCE SHEET, and with South Carolina Federal Savings Bank v. San-A-Bel Corp., 307 S.C. 76, 413 S.E. (2d) 852 (Ct. App. 1992), but a ruling of reversal is consistent with the spirit of both of these cases.
For reasons herein stated, I would reverse the order of the trial court.