Background
NVR contracted with Osprey Point Preserve, LLC to develop and purchase residential lots in the Osprey Point Community. Their agreements contemplated that OPP would retain a waterfront marina parcel and construct a marina and related amenities, subject to regulatory approval. After NVR agreed to a per-lot price increase, OPP also agreed to pursue enhanced amenities, including a private restaurant and 24-slip marina.
Sussex County rejected the proposed commercial restaurant and marina but permitted a less intensive private marina for homeowners. OPP submitted a revised site plan that removed restaurant-related features and made other adjustments. NVR disapproved the plan, demanded further homeowner input, and ultimately asserted that the marina parcel should be conveyed to the homeowners’ association. NVR stopped purchasing lots, sued for declaratory and specific-performance relief, and OPP later purported to terminate the parties’ lot-purchase agreement.
The Court’s Holding
After trial, the Court held that OPP owns the marina parcel. The parties’ agreements, recorded declaration, public offering materials, prior pleadings, and other evidence consistently showed that OPP—not the homeowners’ association—would retain it. The 2020 site plan’s description of the parcel as “Marina Open Space” did not transfer title or override the declaration expressly excluding the parcel from association property.
The Court also held that OPP did not breach NVR’s contractual review and approval rights by submitting the revised site plan before obtaining NVR’s approval. The agreement permitted NVR to review and approve or disapprove changes but did not require approval before submission to the County. NVR received the plan soon after submission and had ample opportunity to review it. Its refusal to approve was unreasonable because the revised plan largely tracked the previously approved plan, removed features rejected by the County, and was withheld as leverage to obtain concessions—principally transfer of OPP’s parcel—to which NVR and the homeowners were not entitled.
Because NVR breached the agreement by unreasonably withholding approval and then failed to purchase lots after OPP satisfied the applicable conditions, OPP validly terminated the agreement. The Court denied NVR’s requested declaratory judgment and specific performance, entered judgment for OPP on Counts I and II of NVR’s complaint and Count VII of OPP’s counterclaims, and held Counts I through IV of the counterclaims moot.
Key Takeaways
- A site plan’s reference to “open space,” without plain language conveying title, did not transfer a privately owned marina parcel to a homeowners’ association.
- A contractual right to review and approve plan changes did not create a right to approve those changes before their submission to regulators where the agreement imposed no such timing requirement.
- Withholding approval to pressure a counterparty into surrendering property outside the parties’ bargain was unreasonable and constituted a breach.
Why It Matters
The decision underscores that Delaware courts will enforce development agreements according to their text and the parties’ documented allocation of property rights. Regulatory changes and homeowner dissatisfaction did not permit NVR to rewrite the bargain or use its approval right to demand ownership concessions.
Developers and homebuilders should expressly specify when approval must occur, what standards govern consent, and how regulatory denials affect planned amenities. Recorded plans should also be read alongside governing declarations and contracts rather than treated as independently transferring title.