I recommend that you seek out a very good real estate lawyer in your area and follow his advice. It will be worth a modest conference fee.
Restrictions on a deed are legitimate limitations on use, but most restrictions expire with a specified time frame. If there is no expiration date on the deed in question, there may be some state statute that provides for an expiration after some given period. It seems to me that the passing of 124 years (and with it the passing away of the community standards that apparently existed at that time) would argue for nullification.
If there is no applicable statute, perhaps there is a basis for obtaining a court order holding that the restriction is now obsolete. Since you no doubt would like to have your property insurable by a reputable title insurance company -- without exception to the restrictions -- your attorney probably should confer with a title company's regional counsel for assistance in resolving the matter.
Answered on Mar 14th, 2012 at 6:41 PM