Court OKs Demolition of Construction That Violated Covenants
When owners go ahead with new construction that’s prohibited by restrictive covenants, boards can be at a loss. Often, they’re skeptical that a court will order the destruction of an offending structure. A recent case out of Michigan proves otherwise (Sgriccia v. Walsh*).
Deconstructing the Case
“Lately, there seemingly is a whole undercurrent of people who take pride in asking for forgiveness, rather than asking for permission,” says Robert Ducharme, a solo practitioner who has represented New Hampshire associations for 20 years. This case could be an example of just that.
It involved a subdivision with 26 lots. The subdivision has a restrictive covenant prohibiting home construction beyond its “timber line.” The declaration also provides that no buildings can be erected until the plans and specifications are approved by the developers or their successors (the development company dissolved in 1999, with no apparent successor).
The plaintiffs’ family had owned Lot 21 since the 1960s. In 2019, the defendants, who purchased Lot 22 in 1994, began to build a home.
The prior year, when surveyors’ stakes first went up, the plaintiffs had sent the defendants a letter stating that they believed the planned home violated the restriction on building location. Specifically, they asserted that it would be too close to the timber line. They sent another letter in May 2019, after they learned the defendants had obtained a building permit.
After construction started in July 2019, the plaintiffs sought a preliminary injunction to block the defendants from continuing to build in the current location (the subdivision didn’t have a community association).
They claimed the restrictive covenants were intended to keep the lots desirable and uniform. The placement of the home was so far forward, they argued, that it wasn’t uniform with nearby houses and blocked lake views and sight lines, making existing homes less desirable.
The trial court didn’t grant the injunction but warned the defendants that they continued to build at their own risk. Sure enough, after a trial, the court found that the restrictions were clearly in place to create, in part, a uniform boundary and preserve views.
Because the location of the new home violated both objectives, the court ordered the defendants to remove the portion outside the timber line. If rebuilt, the defendants were required to obtain the approval of adjacent landowners.
The Court of Appeals agreed. It stressed that a “negative easement” such as the timber line restriction is a valuable property right. While removal of part of the home may seem harsh, the court said, the defendants were aware of the dispute and the possible consequences early in the construction process. Their resulting damages were immaterial to the outcome of the case.
Lessons Learned
“Most judges are somewhat cautious about making people take down construction,” says Kevin Hirzel, managing member of Hirzel Law, PLC, a Michigan-based firm that works with numerous community associations. “But here the only way to get compliance with the restriction was to take it down.”
It probably didn’t help the defendants’ case that they were so brazen. Hirzel says that owners generally will change their course of action after receiving a warning — especially a warning from a court. “These owners decided to take the risk,” he says.
This type of ruling isn’t limited to Michigan courts. Ducharme recalls a case in New Hampshire involving a hotel.“The hotel bought a strip mall and a parking lot to put up the hotel,” he says. “A neighboring property had an easement for a certain amount of parking spaces.
“Rather than get a preliminary ruling from a court to determine whether the easement had expired, the hotel’s attorney told his client that he had determined it had expired and to go ahead and build.”
Not surprisingly, the neighboring property owners sued after the hotel was built and their parking eliminated. “The court ruled in favor of the neighbors, noting the easement had never expired,” Ducharme says. “The remedy, of course, for an obstruction is to remove the obstruction, so the court ordered the hotel to be removed.”
The parties ultimately settled, and the hotel remained intact. The case is another illustration of courts’ willingness to take what might seem like extreme measures when warranted, though.
Hirzel sees two lessons for associations in the Michigan case, beyond the fact that courts will order demolition.
The first lesson relates to restrictive language. “It was debatable as to where the timber line was because the term wasn’t defined in the covenants,” Hirzel says. Indeed, the trial court heard testimony from arborists and foresters and even visited the site to help determine the proper definition.
“If you have old deed restrictions that aren’t a model of clarity with specific restrictions on precisely where you can and can’t build, it’s best to update them,” Hirzel says.
He also emphasizes the importance of plaintiffs’ timely response to the impending violative construction. “If an association doesn’t take action, the owner has a potential defense,” Hirzel says. The defendant owners could, for example, argue that the association waived or unreasonably delayed enforcement of the restriction.