Dissecting Covenant Enforcement Cases

As a community association lawyer, I am routinely called upon for advice on how to address an unresolved vi­olation of the community’s rules and reg­ulations. Often the question arises after the board, or its covenants committee, has already convened a hearing and imposed monetary charges against the lot owner who has an unresolved violation of the communi­ty’s design standards or rules. In other cases, the question prompts actions of an owner who initiates significant modifications to their lot or unit without the prior written approval of the board or its committees. The exceptional cases are those where an owner preempts the association and seeks a court order that the proposed, yet unapproved, lot modification is consistent with the associa­tion’s recorded covenants.

In all covenant enforcement matters, there are three common questions that I ask of the association’s board and management team before we initiate legal action against an owner on a covenant enforcement case:

1. Did the association administer the application for approval or enforcement process without any errors?
As part of the initial assessment of any un­resolved covenant enforcement case, we ask management or the client for copies of all the correspondence that has been exchanged with the affected owner. During this review, we confirm that: a) applications for lot or unit modifications were complete and con­sistent with the current design standards; b) all email correspondence and letters were sent to the correct addresses; c) enforcement letters were sent via certified mail when re­quired by statute (and ideally by regular first class mail as well); d) all enforcement letters accurately described the unresolved viola­tion and the corrective action that would bring the lot or unit into compliance; e) all letters were sent within the required time­lines established in applicable statutes or the association’s documents; and f) the penalties imposed to date, if any, are consistent with the statutes, the recorded covenants, and were applied in a reasonable manner.

In an ideal world, the data that we receive from management or our clients on a cov­enant enforcement matter would always be very well documented and accurate. Unfor­tunately, we live in the real world where it is all too common when neighbors are working in a volunteer capacity, or when managers rely too strongly on formulaic documents, that mistakes happen. As an example, our firm recently litigated a covenant case where the handwritten notes on an application for approval were in dispute. To be helpful, the covenants committee chairperson added handwritten notes to a pending application for approval that was later disputed by the owner. In ruling that the owners were en­titled to keep their unapproved lot modifi­cations, the court held that the burden is on the as­sociation, not the owner, to properly document each of its actions on a pending application for lot modifications.

In your community, if an application is in­complete, is your management team writing a letter to advise the homeowner of the data that is missing from the application? If not, the owner may claim that their application has deemed approved by the association if the recorded covenants provide a finite time­line for the association to review applications for a unit or lot modifications.
Another common area where the enforce­ment process can fail involves the timing of the association’s hearing and outcome of hearing letters. If the hearing notice letter is off by a day or two, the owner may be able to challenge the ultimate hearing result.

2. Are the rules being enforced by the association easy to understand for a non-resident?
One of the best ways to test a rule is to ask someone who is entirely unaffiliated with your board or covenants committee if the rule makes sense to them. If not, then con­sider the difficulties of explaining the rule to a judge in court.

Our firm recently litigated a case against an owner who called in an expert to define where the rear of their lot ended. Thankfully, the client’s de­sign standards defined the term “rear of lot” so that the judge could easily overrule the need for the expert testimony, which resulted in a shorter trial.

3. Are other options outside of court action feasible to resolve the violation?
Litigation of any kind is, by its very nature, uncertain and expensive. For these reasons, I like to explore with my clients what alternatives to litigation may be feasible and consistent with the association’s record­ed covenants. Is the lot or unit modification that was not approved consistent with the design standards? If so, is there a way to work with the owner to complete an application and document the modifica­tions after the fact so that the lot or unit is compliant.

In some instances, using the association’s right-of-access onto a lot is a cost-effective enforcement remedy. However, using this self-help remedy is only to be considered after consultation with legal counsel, as there are numerous pitfalls, particularly, if the owner of the lot or unit has threatened a breach of the peace in the past. Self-help is also out of the question when the work involved is extensive such as roof­ing repairs, replacement of structural components, and deck or siding repairs.

For very challenging covenant enforcement cases, I am also a propo­nent of non-binding mediation of the dispute. In most cases, media­tion requires the agreement of both parties to the dispute, but it can be effective at finding a middle ground and avoiding the expense of court action. Even routine covenant enforcement cases, if contested by the owner, take at least two days to litigate. A full or half day medi­ation may result in a settlement agreement. If not, it will allow both parties to gain valuable insights into the mindset of the other party that may be useful in a trial setting.

By Kimberley M. O’Halloran-Perez, ESQ.
Kim is a community association attorney with Rees Broome, PC in Tysons Corner, Virginia. Her practice is devoted exclusively to the representation of community associations in Maryland, Virginia, and West Virginia. Kim is also a past president of WMCCAI.

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