Homeowner Associations: Covenant Enforcement
Can my neighbor leave their trash cans outside? Can I build a shed for tools? Can my neighbor install that huge, ugly new fence? Nothing is more uncertain than whether a specific action by a homeowner violates a common interest community covenant running with the land. Homeowner association covenant enforcement is a tricky business. Many homeowner associations avoid covenant enforcement because the loser often pays the other’s legal fees. The best way to avoid covenant enforcement issues is to have a consistent, written policy and to follow that policy.
A restriction on ownership rights in a recorded document is a restrictive covenant. That document is often called the Declaration or CCRs, as in “Covenants, Conditions, and Restrictions”. The dictates of plain English must guide the interpretation of restrictive covenants. Covenants are construed as a whole, keeping in mind their underlying purpose. If the covenant is clear on its face, courts will enforce the covenant as written. A written covenant is ambiguous when it is reasonably susceptible to more than one meaning, or where there is uncertainty as to the meaning of a term. When the covenant is unclear, courts often resolve doubts against the restriction and in favor of free and unrestricted use of property.
Restrictive covenants, especially those found in older documents, can be overly broad. For example, a Declaration may contain a prohibition against creating an annoyance or nuisance on your property because we should all know what is an annoyance or nuisance, right? As the saying goes, one man’s weed is another man’s flower. Newer restrictive covenants tend to be lengthier and more specific calling out by name the prohibited activity; but even then, what appears clearly prohibited may become ambiguous with the passage of time and changes in technology. A good example is a prohibition against simulated wood fences. Many years ago, I handled a dispute over the definition of wood when composite decking was new technology. The Declaration required that all fencing be actual wood. Back then, we lost the argument that our simulated wood was better than or equivalent to actual wood. Today, the situation might be very different because of product improvement. Another example is an older Declaration with a prohibition against mobile homes. There is Colorado case law finding the term “mobile home” in a Declaration ambiguous because, over time, various federal and state regulations have used the terms manufactured homes, trailer homes, and mobile homes interchangeably. Time marches on, and so do definitions.
Fresher Declarations tend to grant homeowner associations broad latitude in drafting restrictions as part of rules and regulations. This (1) avoids having to modify the Declaration and (2) gives the association the power to alter what eventually becomes an obsolete restriction or to address a new technology. However, many homeowners balk at granting associations these types of far-reaching powers. This type of Declaration can be summed up as: the association is always right, any ambiguity is decided in favor of the association, and if you challenge you will pay the association’s legal bill. Your remedy is to change association officers and then have the new officers change the rules and regulations.
There is no one way to avoid covenant enforcement and interpretation issues. However, associations can reduce those issues by: (1) having a written policy, (2) following that policy, (3) being consistent, and (4) once a requested action is approved, not reneging because of a mistake. Courts don’t like it when an association gives a homeowner permission to do something and then changes its mind after the homeowner has reasonably relied on that permission. If an association has a consistent procedure that it publicizes and follows, courts tend to give a little latitude to the association. It is all about notice.
