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Covenant Enforcement in Common Interest Communities

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Restrictive Covenants

Definition.  Restrictive covenants are deed restrictions typically found in a Declaration of Covenants, Conditions and Restrictions or a Declaration of Condominium for a community.  Declarations including restrictive covenants are normally drafted and put in place by the original developer.  Restrictions may vary in type and scope from community to community. 

When restrictive covenants are recorded in a declaration, they bind all property owners.  Even though a purchaser may not read the declaration, the purchaser is bound by the covenants because they are in his “chain of title” and attach to the property.  As a result, each owner has constructive knowledge of the restrictive covenants and actual knowledge becomes irrelevant. 

Purpose of Restrictive Covenants.  The stated intention of many restrictive covenants is to “preserve, protect, and enhance property values.”  This goal may be achieved as follows:

  • Architectural and maintenance restrictions give a development a more standard appearance because they control some of the activities that take place within its boundaries.
  • Use restrictions limit use of property for defined purposes and in accordance with defined standards.  Use restrictions are generally intended to enhance the peaceful enjoyment of residents’ use of their properties.

Types of Restrictive Covenants.  Although restrictive covenants include affirmative covenants such as an obligation to pay assessments, maintenance obligations, and insurance obligations, this article focuses on use restrictions. These types of restrictions fall within two general categories. 

Architectural and Building Restrictions.  For many types of changes to the exterior appearance of property, these restrictions require approval of the Board of  Directors of the Association or Architectural Review Committee.

Typical restrictions may include:

  • Size of dwelling
  • Set back requirements
  • Conditions on additions to dwellings (e.g., patios, enclosing porches, adding a second story, installing satellite dishes or solar panels)
  • Modifications to exterior appearance of dwellings (e.g., paint color, materials (such as siding, brick, or stone), windows and doors)
  • Interior modifications that may affect other owners (e.g., installing hard surface flooring in stacked units, connecting to common element utilities for items such as washing machines, structural changes)
  • Exterior appearance of lots (e.g., landscaping, yard art, flags)  

Use Restrictions.  Although this is not an exhaustive list, it highlights some of the most common use restrictions:

  • Residential use of dwelling units (scope of home occupations)
  • Occupancy (e.g., number of residents in a dwelling)
  • Leasing
  • Pets
  • Parking
  • Use of other limited common elements and garages (what can be placed on patio, garages used for other than parking vehicles)
  • Nuisance and noise
  • Signs
  • Trash
  • Satellite dishes
  • Age restrictions in communities qualifying under Housing for Older Persons Act 

Common Violations

Architectural Violations.  The most common violation of architectural restrictions is failure to obtain approval for a change before the change is made.  The best approach to architectural violations is to take action as quickly as is reasonable under the circumstances.  Although the statute of limitations on a building restriction may allow the association to take legal action within one year, prompt action is prudent. 

The initial steps of notice to cease work or take other required action may allow the owner and the association to address the issue short of litigation.  For example, if the board becomes aware that an owner is pouring a foundation for an addition that has not been approved, the board should immediately contact the owner verbally (if possible) and in writing and request that the owner ceases work until plans are submitted and approved. 

If the owner continues work, a court is more likely to assume that the owner proceeded at his own risk and rule that the improvement has to be removed, even if the owner has expended substantial sums on the improvement.

Use Restrictions/Violations.

  • Pets.  There are a number of common pet restrictions.  Typical violations range from having a pet in a community that prohibits pets, having a dog that is too big in a community that restricts the size of dogs, allowing a dog to remain outside in an enclosed area barking for long periods of time, allowing pets to urinate on balconies with the waste dripping to balconies below, and failing to pick up pet feces from common areas.
  • Parking.  Many declarations include parking restrictions.  Even if not included in the declaration, they are typically found enforceable if enacted by rule as a reasonable means to regulate use of the common areas.  Common parking restrictions address prohibited vehicles such as RV’s and commercial vehicles, guest parking, disabled and abandoned vehicles.  Towing is commonly identified as a remedy to address parking violations.
  • Leasing.  Leasing restrictions are more often adopted by amendment than found in original developer documents.  Restrictions may include limitations on the right to lease or may simply include third party beneficiary provisions for the association (e.g., minimum lease terms, owner liable for tenant violations, authority to evict subject to defined standards).
  • Nuisance.  Frequently nuisance restrictions in governing documents are very subjective and, therefore, difficult to enforce.  More recent documents sometimes define behavior considered to be a nuisance (such as barking dogs, music that can be heard in another unit, construction activity during specified hours).  If the nuisance restriction is broad, the board should adopt rules defining what constitutes a nuisance for the community. 
  • Smoking.  This is a controversial issue, but at least one trial court in Colorado has held that if an association properly amends its declaration with the requisite owner vote, the association may restrict smoking within units. 

Obligation of Association to Enforce Covenants - The Business Judgment Rule 

Colorado Courts have addressed the issue of an association’s duty to its members to enforce covenants and the standard of care to which the association will be held in Colorado Homes, Ltd. v. Loerch-Wilson, 43 P.3d 718 (2001). 

Creation date: Jun 15, 2018 1:04pm     Last modified date: Jun 15, 2018 1:04pm   Last visit date: May 11, 2020 1:05pm
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