Why do we need restrictive covenants? And why enforce them? What happens when the covenants aren’t enforced? Drive through a few older neighborhoods in suburban or semi-rural Virginia or Maryland, and you will have the obvious answers to these questions. Dilapidated houses, collapsing fences, and meadow-like lawns are typical signs of a community where covenant enforcement is lacking. So the purpose of covenant enforcement is innately obvious: to preserve and to promote the harmonious and aesthetic image of a community. Appearance aside, are there other reasons for covenant enforcement? What happens when the board delays or suspends enforcement? This article provides some answers to these questions and highlights some of the common consequences of a failure to timely enforce covenants for community associations.
What is a Covenant?
Before discussing covenant enforcement, it is important to understand what a covenant is. Legally, a “covenant” is a contractual arrangement, but the biblical history of the term “covenant” suggests a more “sacred” kind of promise. In modern times, a restrictive covenant is a clause in a recorded document (such as a declaration or bylaws) that limits what the owner of the land can do with the property. It’s a promise that is generally enforceable by an association or the owners individually.
When Covenant’s Aren’t Enforced
Declaration of an association charges a board of directors with an obligation to enforce the restrictive covenants either by issuing demands, assessing monetary penalties against violating owners, performing “self-help,” or by pursuing legal remedies through the courts. What happens when the board does not fulfill its obligation?
Community Appearance and Property Values
As noted above, the immediate impact of a failure to enforce architectural and maintenance guidelines is the neglected appearance of a community. On the surface, this may not seem like a massive deal. What many fail to realize is that properties located in poorly-maintained neighborhoods have much lower resale value than their counterparts located in well-maintained subdivisions. Therefore, lack of covenant enforcement not only impacts the appearance of a community but also adversely affects the property values – a very real consequence.
Practical consequences aside, failure to enforce the governing documents in a timely manner, subjects the association to defenses which could preclude enforcement both on the individual and collective cases. Such defenses include, but are not necessarily limited to the following:
- Laches. In laymen’s terms, the defense of laches (“sitting on one’s rights”) means that simply by the passage of time, the association’s rights may become unenforceable. By way of an example, imagine that a property owner builds a chain link fence in contravention to the association’s declaration, but the association does not initiate enforcement until many years later. Because of the unreasonable delay in bringing an action, the association’s claim could be seen as barred by laches.
- Abandonment or acquiescence of violation. To establish abandonment, the defendant must show that a specific restrictive covenant has become unenforceable as a result of repeated, unopposed violations. For example, a homeowners’ association was found to have effectively abandoned the restrictive covenant prohibiting construction of any building on a lot except private dwelling houses because the association had allowed construction of numerous buildings such as pool houses, gazebos, guest houses, and sheds.
- Waiver. This defense involves intentional relinquishment of a known right, similar to abandonment and laches, where the association has “waived” its rights by the lack of enforcement. The party relying on the waiver defense must show that the previous conduct or violations had affected the architectural scheme of the area so as to render the enforcement of the restriction of no substantial value to the property owners. While many association declarations have a provision stating that a lack of enforcement cannot be deemed as a waiver, judges do not always honor this provision if the homeowner makes a compelling case.
- Adverse possession. In some instances, the association can lose the right of title to the portion of its common area to an encroaching property owner if the proceeding for ejectment is not initiated timely. Consider this scenario: a property owner builds a fence that encroaches on the association’s common area by several feet without permission from the association. He openly maintains physical possession of the portion of the common area to the exclusion of other members of the community for 15 years (the required period in many jurisdictions). If the association does nothing to remove the trespasser, his possession can ripen into the owner taking legal title to the association’s common area.
In conclusion, associations need to guard their rights closely and to implement the requisite covenant enforcement procedures to avoid the defenses noted above. Failure to do so not only affects property values and the overall appearance of communities but may also give rise to significant defenses in individual and future cases.
By Olga Tseliak, ESQ.
Olga is an associate attorney with the law firm of Chadwick, Washington, Moriarty, Elmore & Bunn P.C. Her practice is devoted to community association representation, including such matters of covenant interpretation and enforcement, contract law, and collections. She is an active member of WMCCAI’s Quorum Committee.