Review Governing Documents for Clarity

September 17, 2015
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Litigation with a disgruntled member can set your association back financially. Even if it wins a lawsuit and is awarded attorney’s fees, the time and effort it has had to expend probably took the focus off helping the community as a whole. Many member-association lawsuits stem from differing interpretations of the bylaws, rules, and regulations that govern the community. For example, a member could argue that improvements he or she made to a unit are permitted under the governing documents. If you disagree, and demand that the improvements be removed or fine the member, it could spark litigation. That’s why it’s so important for governing documents to be crystal clear as to what members are and aren’t permitted to do. Occasionally, an association with vague restrictive covenants might get lucky and get a ruling in its favor. A Tennessee appeals court recently sided with an association and ruled that a homeowner was bound by vague restrictive covenants prohibiting improvements to her property.

In the Tennessee case, homeowners installed landscaping on their property without receiving approval from their association’s architectural review committee (ARC), which was required by restrictive covenants in the community’s governing documents. The homeowners refused to remove the landscaping after they were informed by the association’s manager that it conflicted with the appearance of the community and was prohibited. They argued that the restrictive covenants were vague and ambiguous as to what outdoor improvements could be made by homeowners. A trial court ruled in favor of the association, and the homeowners appealed.

The appeals court upheld the trial court’s decision. The appeals court agreed with the trial court that the association was entitled to enforce its restrictive covenants requiring homeowners in the community to apply for and receive permission to make landscaping changes to their yards. The ARC had acted within its discretion in ordering the homeowners to remove the improvements that it found to be inconsistent with other homes in the neighborhood—despite the fact that it agreed that the restrictive covenants are vague and that their enforcement is very subjective.

The appeals court found that the covenants are enforceable as long as the homeowners are on notice of the board’s general authority and the board then follows its own appropriate procedures in enforcing the covenants.

The appeals court pointed out that, although the covenants were vague in some areas, they also clearly define what an improvement is and state that it specifically includes landscaping. Also, when the homeowners signed and purchased into the community and accepted the part of the deed regarding restrictive covenants, they acknowledged that they may have to get permission for any improvement made that would be incompatible with the rest of the neighborhood [Avalon Sections 4 v. Chaudhuri, June 2014].

The association prevailed in that case, but why take the risk that a similar situation would work in a homeowner’s favor in your community? Instead, periodically review the governing documents and discuss with the board any parts that you think need to be made unambiguous. Remember that consulting the association’s attorney is a good idea if you or the board is uncertain about what you should do.