In Lohmeyer v. Bower, 170 Kan. 442, 227 P.2d 102 (1951), the Kansas Supreme Court held that a property’s title is unmarketable when the property actually violates a zoning ordinance or a recorded restrictive covenant, even if the sales contract requires the buyer to take the property subject to restrictions of record. The buyer was entitled to rescind the contract and recover what he had paid.1Justia. Lohmeyer v. Bower
What Happened
Lohmeyer contracted to buy Lot 37 on Berkley Road in the Berkley Hills Addition in Emporia, Kansas. The Bowers agreed to convey by warranty deed with an abstract showing “good merchantable title, free and clear of all encumbrances,” except for “restrictions and easements of record.”1Justia. Lohmeyer v. Bower
After signing, Lohmeyer discovered two problems. The house sat about 18 inches from the north lot line, which violated Section 5-224 of the Emporia Ordinances prohibiting frame buildings within three feet of a side or rear lot line. And the recorded dedication for Berkley Hills Addition required a two-story house on the lot, but the existing house had only one story.1Justia. Lohmeyer v. Bower Both violations predated the contract.
Lohmeyer notified the Bowers, demanded release from the contract, and asked for his money back. They refused. The trial court sided with the sellers and ordered specific performance. Lohmeyer appealed.1Justia. Lohmeyer v. Bower
How the Court Defined Marketable Title
The Kansas Supreme Court began with the seller’s promise to deliver merchantable title. A marketable title, the court said, is one free from reasonable doubt; a title is doubtful and unmarketable when it exposes the holder to the hazard of litigation.1Justia. Lohmeyer v. Bower
The defect has to be substantial. Minor technical issues that do not affect the quantity, quality, or value of the property will not justify rejecting title, and the concern must rest on known facts rather than speculation.1Justia. Lohmeyer v. Bower A setback violation exposing the owner to city enforcement, and a covenant breach exposing the owner to suit by neighboring lot owners, both cleared that threshold.
Existence of a Restriction Is Not the Same as a Violation
This is the distinction the case is remembered for. Zoning ordinances by themselves do not render title unmarketable. Practically every urban parcel is subject to zoning, and treating that as an encumbrance would make almost no title marketable. The court adopted the majority rule that municipal zoning restrictions existing when the contract is signed are not encumbrances that let a buyer walk away.1Justia. Lohmeyer v. Bower
An active violation of the same ordinance is a different matter. The title here was unmarketable “not because of an existing zoning ordinance, but because a building had been constructed upon the lot in violation of that ordinance.”1Justia. Lohmeyer v. Bower A buyer stepping into that situation inherits the risk of enforcement, which is exactly the kind of litigation exposure the marketable title standard exists to prevent.
The same reasoning covered the recorded two-story requirement. A restrictive covenant is an encumbrance, and a property that violates one leaves the owner open to suit by neighboring owners seeking to enforce compliance. Forcing a buyer to accept property in breach of a building restriction, the court said, would “compel the vendee to buy a lawsuit.”1Justia. Lohmeyer v. Bower
Why the “Subject To” Clause Did Not Save the Sellers
The Bowers’ best argument was the contract itself. Because the deed was to be made “subject to all restrictions and easements of record,” they contended Lohmeyer had agreed to take the property with those restrictions and their consequences. The court disagreed.
Taking property subject to a restriction is not the same as taking property that violates one. The contract did not say the buyer would accept non-compliance. In the court’s words, “it is the violation of the restrictions imposed by both the ordinance and the dedication declaration, not the existence of those restrictions, that renders the title unmarketable.”1Justia. Lohmeyer v. Bower Standard “subject to” language does not shield a seller when the property is already in breach of the very restrictions the clause references.
The Ruling
The Kansas Supreme Court reversed the trial court’s order of specific performance. Because the sellers had contracted to deliver good merchantable title free and clear of encumbrances, and the existing violations made that impossible, the proper remedy was rescission.1Justia. Lohmeyer v. Bower The case was remanded with directions to cancel the contract and enter judgment that was equitable and proper on the pleadings, which included refunding what Lohmeyer had paid.2PastPaperHero. Lohmeyer v. Bower, 170 Kan. 442, 227 P.2d 102 Rescission puts both sides back where they were before signing: sellers keep the property, buyer recovers the deposit.
What the Case Means for Buyers and Sellers
Three points from Lohmeyer continue to guide real estate practice.
The existence-versus-violation line still controls. A buyer cannot refuse to close because the property is subject to zoning or recorded covenants. A buyer can refuse to close when the property actually breaches them.
Boilerplate “subject to” language is not a waiver. Unless a buyer specifically agrees to accept known violations, the seller’s duty to deliver marketable title survives the clause. Courts have applied similar reasoning to “as-is” language, generally reading it to disclaim warranties about physical condition rather than to waive the implied duty to convey clean title.3PastPaperHero. Real Estate Contracts – Marketability of Title
The obligation rests on the seller. A seller who promises merchantable title owns the job of making sure the property complies with the ordinances and covenants that govern it. If it does not, the buyer has the right to walk away and recover the money paid. That is why title searches, surveys, and inspections earn their place in the closing process on any property purchase.