PROPERTY:  Restraint of alienation and construction of a deed to real property
DATE RENDERED: 4/20/2007

COA affirmed partial summary judgment entered finding that a clause in an unrecorded instrument did not constitute an unreasonable restriction on the alienation of property. 

On November 10, 1988, all six children entered into an unrecorded instrument which described the numerous 
tracts of land inherited from their parents, purported to transfer the tracts to themselves and which provided that "None of the Second Parties, nor their heirs or devisees, shall sell or convey said property to anyone, except to one or more of the Parties of the Second Part, or the survivors thereof, for a period of twenty-one (21) years following the death of the first of the Second Parties to die, without the written consent of the Second Parties, or the survivors thereof. Upon the death of the last of the Second Parties to die, this limitation on the right to sell and convey said property shall terminate."

In June 2005, the two appellant siblings and their spouses filed a complaint for the sale of real estate, asserting that the clause “was an unreasonable restraint on the alienation of the land held in fee by the parties, and thus, such clause is void” contending that the trial court erred by finding that the clause did not create an unreasonable restraint on the sale of the property. COA disagreed and affirmed the dismissal.

A question involving the construction of a deed or contract is a question of law that will be decided by the court and, unless there is ambiguity, the parties’ intentions must be discerned from the four corners of the instrument.  The common-law rule against restraint on alienation was designed to prevent the taking from the owner of the power to alienate property, but the prevailing rule in Kentucky is that a restraint on the alienation of property may be imposed and enforced if the restraint is for a reasonable period of time. Robertson v. Simmons, 322 S.W.2d 476 (Ky. 1959).

The determination of reasonableness may turn on whether the restraint permanently prevents the conveyance of property, and the Supreme Court has held that a restraint on alienation was reasonable when it existed only for the lifetime of the grantor.

There was no suggestion that the parties engaged in any wrongful or fraudulent behavior when entering into the unrecorded instrument, and the clause specifically provided for its own termination, either twenty-one years after the first sibling’s death or upon the last sibling’s death. Hence, the restraint on alienation was not permanent, and COA agreed with the trial court’s finding that it was reasonable.

Digested by Michael Stevens

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