First, all of us a The Richards Law Office (Richards Law) wish you the very best for 2017. We look forward to assisting your communities this coming year.
Second, as I was thinking of the topics that were frequently dealt with by us last year, several came to mind: (1) the proper timing of turning a matter over to the attorney for collections; (2) Association records, the requirement to keep certain records (having a document retention policy) and the right of owners to inspect records; and (3) strict compliance with your CCRs and Bylaws (though I work with some of the most organized Boards in the state, I’ve also seen a few Boards that “make the rules up as they go.” This last category got me thinking about what I wanted to start this year off addressing: WHEN IS A CCR OR BYLAW PROVISION DEEMED ABANDONED AND NO LONGER ENFORCEABLE?
Let’s analyze this question under the law in Utah (we have some case law guidance on this topic).
I see the following scenario all the time: several new Board members come into office and they want to do things differently than the prior Board. By this, I am specifically referring to enforcement – they want to be more aggressive in following the CCRs and/or Bylaws.
Time and time again, the question that come up is: if the prior Board did not enforce XYZ, can the new Board enforce XYZ?
Please note that the answer to this question is not black and white. It will take an analysis by our office to give you the proper guidance. Nevertheless, the following information will be very useful to your Board.
For this discussion today (which is based on a Utah case Fink v. Miller) assume the following: (A) the CCRs state “wood shingles…shall be required on the exterior roofs of all structures.” (B) the CCRs also required all owners intending to build, improve or alter their homes to “submit all plans and specifications, including exterior colors and materials, to the Design Review Committee.” (C) over time, for various reasons, 23 of 81 homes were allowed to have roof shingles NOT in compliance with the “wood shingle” requirement (note, there are tile shingles, asphalt singles, fiberglass shingles, etc., that an owner might have installed).
(HOWEVER, WHEN THINKING ABOUT THIS ARCHITECTURAL MATERIALS REQUEST, THINK OF HOME BUISNESSES, CONSIDER PETS OR RQEUIREMNTS TO KEEP PATIOS FREE FROM CLUTTER, ETC.)
In Fink v. Miller, the Millers submitted plans showed a proposed “wood shingle” for their roof. However, later, the Miller’s amended their plans requesting approval for a “fiberglass shingle.”
The Design Review Committee rejected the request for a “fiberglass shingle” simply because it wanted to keep to the CCRs’ requirement of “wood shingles.” HOWEVER, AT THAT TIME 23 OUT OF 81 HOMES HAD NON-WOOD SHINGLES.
A lawsuit was filed to stop the use of fiberglass shingles.
- As a general rule, property owners who have purchased land in a subdivision, subject to a recorded set of restrictive covenants, have the right to enforce such restrictions against property owners who do not comply with the stated restrictions.”
- However, as I will explain below, property owners may lose this right if the specific covenant they seek to enforce has been ABANDONED – thereby rendering the covenant unenforceable.
QUESTION AND POINT FOR THIS BLOG ENTRY – what are the factors considered to determine whether or not the covenant (whatever it may be) has been abandoned?
The court talked about two different types of scenarios and articulated two different standards for each situation.
- Covenants that are related to the use of the property (such as using your home for a home business, etc.). In this instance, a restrictive covenant may be deemed unenforceable if the (repeat) violation has caused a change in the neighborhood so great that this change neutralizes the benefits of the restriction to the point of defeating its purpose…. So if a violation does not change the nature or character of the community (because it is not readily apparent, etc.), then it is harder to render the covenant useless.
- Covenants that are related to aesthetic purposes. This is a different analysis. The test that this court imposed was stated as follows: “the violations are so great (numerous) as to lead the mind of the average person to reasonably conclude that the restriction in question has been abandoned.” This test is met when “…the average person, upon inspection of a subdivision and knowing of a certain restriction, will readily observe sufficient violations so the he or she will logically infer that the property owners neither adhere to or enforce the restriction.”
This latter test considers the number, nature and severity of the then existing violations, any prior acts of enforcement of the restriction (or the lack thereof), and whether it is still possible to realize to a substantial degree the benefits intended through the covenants if was still enforced despite violations existing.
As stated above this court found that 23 of 81 homes had non-confirming shingles. And the court found that the violation was sufficiently widespread. That fact, coupled with lack of enforcement efforts over the years, was enough to find the wood shingle covenant abandoned.
As you can see, this is a serious issue. It is fact intensive so no one should panic if they have unenforced covenants in their community because that is precisely what Richards Law is here to help you do – evaluate any such issues and advise the Board accordingly.
We do suggest that Boards conduct and internal “enforcement review” to see if there are provisions of the CCRs and Bylaws that have been unenforced – for whatever reason. Then we can walk through the above analysis with you if a concern arises.
Again, we look forward working with you in 2017 and wish you and your communities the very best.
Sincerely, John Richards PLEASE VISIT: http://www.richardshoalaw.com