Courts will enforce CC&Rs except when . . .

This Alabama appellate decision, Grove Hill HOA v. Rice, sheds light on the reasons CAI insists that the CC&Rs being strictly enforced by the HOA and the courts: the irrational fears of a slippery slope eradication of the HOA. (The HOA was seeking an injunction against the homeowners who had built a driveway not to its liking). One person, the proft-seeking developer, is allowed to set the rules that govern the HOA community for all time to come, regardless of any political consequences with respect to the creation of a private government regime.

 

The trial court held, based on the Willow Lake opinion, emphasis aded,

 

The Association maintained throughout the proceedings that any violation of a restrictive covenant, if allowed over its objection, necessarily dilutes the power of the restrictive covenants and thereby lessens the value of the subdivision property. We agree. In creating the restrictive covenants, the partnership expressly declared that the purpose of the covenants was `to protect the value and desirability of the Property.’”

 

However, as we are finally beginning to see a proper sense of justice for homeowners, the appellate court attempted to reject the Willow Lake precedent and held, “We do not interpret Willow Lake as requiring that an injunction is due to be granted in every case in which a resident has violated a restrictive covenant. Indeed, this court has applied the doctrine of “undue hardship . . . .” That is, emphasis added,

 

enforcement of covenants running with land `”is governed by equitable principles, and will not be decreed if, under the facts of the particular case, it would be inequitable and unjust”‘; specifically, if `”the restrictive covenant has ceased to have any beneficial or substantial value”‘ or `”the defendant will be subject to great hardship or the consequences would be inequitable,”‘ a court of equity will not enforce the covenant.

 

Unforunately, to complicate matters, “undue hardship” requires “clean hands” on the part of the homeowner in that he had no prior knowledge that his act was in violation of the CC&Rs. The court held that the homeowner had prior knowledge and therefore had “unclean hands,”  stating “that a restrictive covenant should be enforced if the defendant had knowledge of it before constructing an improvement contrary to its provisions, even if the harm is disproportionate.” The homeowner lost and had to undo the driveway at a cost of $15,000 to him.

 

 

Grove Hill HOA v. Rice, No. 2100293 (Ala. Civ. App. July 29, 2011).

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Published in: on August 1, 2011 at 11:24 am  Comments (4)  
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4 CommentsLeave a comment

  1. One would think that a cost of $15,000 to undo the driveway would be an undue hardship.

  2. I wrote this brief. Can’t say I was pleased with the ultimate outcome as I felt bad for the homeowner, but Grove Hill HOA was a client of the firm for which I worked at the time.

  3. It’s good to see a court state it will not enforce if undue hardship would result, and that “equitable principals” will prevail. Bear in mind, also, that if fraud is involved in the CC&Rs originally filed or in any amendments subsequently filed, all are rendered null and void. Ask any lawyer! Other adverse factors for the HOA Board or developer are their failure to abide by all CC&R’s, failure to enforce deed restrictions consistently (these become null and void after 18 months of failure to enforce), breach of contract (nulifying all CC&R’s) and breach of fiduciary duty to always act reasonably and in the best interests of the owners/members. These documents are a double-edged sword and the contractual obligation is equal on BOTH sides! Lastly, know that STATE STATUTES and REGULATIONS always cancel out any provisions of CC&Rs inconsistent with those laws!

  4. If a homeowner is aware of a HOA’s governing law and chooses to violate it, he only has himself to blame. To ignore the violation OPENs the door for all kinds of problems.

    By the same token, If a board of directors fail to abide by the Associations Governing rules they too have to face the music and unless the penalty is outlined in the governing rules, the membedshop shoul hold a special meeting to decide what action should be taken. Failure on the part of membership to act also OPENS the door to more board of directors violations.


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