An interesting case involving the expanding wine industry in Virginia:
A circuit court decision reported in Virginia Lawyers Weekly focuses on Virginia’s expanding wine industry. The case centers on a 495 acre area of land in Prince William County . In 2004, the land was divided into 49 individual parcels of about 10 acres each known as the Alexander Lakes subdivision. A declaration of covenants was filed by the developer in 2005 and the next year an amendment was filed by the developer that purported to remove the manor house and its property from the restrictive covenants in the declaration.
A vintner from Fauquier County, Chris Pearmund, owns the original manor house and the land immediately surrounding the house. He claims to have already invested $3 million in the house and property in anticipation of producing wine and holding events in the 3,000 square foot ballroom he had built next to the manor house. In order to get to the property, the public would have to travel through the residential development of Alexander Lakes.
Neighbors in Alexander Lakes objected to Mr. Pearmund’s plan. They attempted to fight the opening of the winery at the state ABC agency and then in circuit court. The neighbors claimed that when they purchased the property: they agreed to be subject to the restrictive covenants in the homeowners’ agreement, but that they were not informed that an exemption to the restrictive covenants in the homeowners’ agreement was granted for Mr. Pearmund’s property; that the restrictive covenants are so strict, homeowners wouldn’t even be allowed to give piano lessons out of their homes because of the potential increased traffic; that the amendment exempting the winery was not effective because it was not filed with a certification required by the Virginia Property Owners Association Act; that the road to the winery was constructed for residential traffic, not commercial traffic; that Mr. Pearmund has already been conducting business at the property without proper approvals.
Mr. Pearmund denied that he has been conducting business at the property without proper approvals and that the exemption for his property from the restrictive covenants of the homeowners association agreement was valid.
Circuit Judge Steven S. Smith found for Mr. Pearmund. In his decision, Judge Smith addressed an apparent conflict in Virginia case law about the requirement that an amendment have a statutory certification to be valid and found that the language of the statute which used “may” instead of “shall” meant that the legislature recognized that an alternative way authorizing an amendment could be used. The developer also filed the amendment to the homeowners association agreement within the seven year window allowed for unilateral changes by the developer to correct errors and the developer testified that it was an error and that he always intended to exempt the winery property from the restrictive covenants.