Can CC&Rs be personalized for each homeowner? YES!

An interesting case was just decided by the Mississippi appellate court that addressed personalized, individual homeowner variations to the CC&Rs. In Long Meadow HOA v. Harlandthe court upheld individualized deeds that modified the subdivision’s CC&Rs that permitted a church to be built within the HOA. Unfortunately, it’s too late for all of us currently living in an HOA regime.

Leaving aside the questions of a contract by constructive notice that permits the surrender of your rights and freedoms as bona fide, and that covenants contrary to public policy are null and void, the adhesion contact nature of the CC&Rs can be pierced. It can be modified by a true exchange, a bargaining, a give and take as is required for a valid. legally binding contract.

From the court records, the persons who owned and sold the lots in the development wrote individualized CC&Rs for each buyer, which were apparently contained or referenced in the individual deed to the property. The court record shows that the owner/declarant included a protective covenant in the deed that specified . . . .“ The record is silent on the existence or recording of a “all for one and one for all” subdivision CC&Rs as we know exist almost everywhere. Apparently such “one for all” is not necessary.

In fact, the Harlands wrote a contingency clause in their purchase contract to protect them in the event they were not permitted to build a church, with a return of their $5,000 escrow payment. (Understand that there are 3 legal documents as part of your purchase: the purchase contract itself, the deed with its standard wording, “subject to CC&Rs,” and the CC&Rs themselves).

Problem is, the lobbyist HOA attorneys tell the developer NO, don’t do it! And the real estate department, and the realtor associations, say nothing to inform the average home buyer, the consumer public, that he can negotiate the purchase contract.

I am sure that this decision will be challenged, especially in other states. It would turn HOA-Land upside down.

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Published in: on April 27, 2011 at 7:58 am  Leave a Comment  
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