INTRODUCTION
 
The Larimer County District Court recently ruled in favor of an association in a matter that Orten & Hindman tried. A homeowner filed a lawsuit against the association because the architectural review committee denied the homeowner’s request to build a two-story, 10 foot addition to the back of his townhome residence. The homeowner claimed that the reasons used by the committee to deny the request were invalid and that the committee acted arbitrarily and capriciously in denying his request. The Court ruled the reasons used by the committee were valid and legitimate criteria to use in considering improvement requests and that the committee did not act arbitrarily or capriciously in denying the homeowner’s request.
 
BACKGROUND
           
The association is made up of 28 townhome units. The declaration of the association, like most, requires homeowners to obtain the approval of the architectural review committee for any improvements to their property. The homeowner submitted a request to the committee, via plans, for the proposed addition. The committee reviewed the plans and visited the residence to determine the location of the addition in relation to the neighboring properties. The committee voted to deny the application and advised the homeowner in writing of its denial and the reasons for the denial, which were that the proposed addition would “encroach on the livability of the northern neighbor’s residence.”
 
The homeowner attended several committee meetings after receiving the denial letter and reiterated the same request. The committee continued to deny the request and further explained the reasons for the denial, including that the proposed addition would negatively impact the neighboring properties when considering such factors as sunlight, open space and property value. These factors are not in the Declaration. The criteria in the Declaration for the committee to consider for improvement requests was “harmony of location in relation to surrounding structures,” etc. As the homeowner believed the reasons given were invalid and as there were two other two-story, rear additions that were approved in the association, one prior to, and one subsequent to, his request, he filed a lawsuit against the association.
 
LAWSUIT
 
The lawsuit sought a Court Order requiring the association to approve the proposed addition. The homeowner argued that the association acted in bad faith when using the language of “livability,” “negative impact on the neighbor,” “property value,” “robbing sunlight” and “view.” The overall thrust of homeowner’s argument was that he didn’t feel his addition had a negative impact on his neighbors and, if his addition had a negative impact on the neighbors, then the other two approved additions, had a negative impact on their neighbors. Moreover, the homeowner argued that the requirements imposed upon him for his request were not imposed on other owners for the same or similar requests.
 
The association argued that the reasons for denial were valid and were derived from the intent and criteria set forth in the Declaration. The association argued that the criteria considered related to the location of the proposed addition in relation to the neighboring property and thus was directly derived from the “harmony of location in relation to surrounding structures” language in the Declaration. Further, the association argued that the very intent of the Declaration was to protect the “values” and amenities of the association so clearly “property value” was to be considered by the committee for improvement requests.
 
Although the association did not use architectural forms for improvement requests, the witnesses testified and the association argued, that the requirements imposed on applicants and the factors considered by the committee were consistent for all applications, no matter whether the application was for a small planting or a large addition.
 
The association also argued that the other two additions were different from the homeowner’s in the impact the addition would have on the neighbors. The homeowner’s townhome, even without the addition, went further to the rear than any other home along that row of units. Therefore, with the additional 10 foot addition to the rear, the neighbors would be greatly affected, losing views of open space, trees, lake, sky and losing sunlight.
 
COURT DECISION
 
The Court ruled in favor of the association, finding the reasons used by the Board to deny the homeowner’s request were valid and legitimate concerns of an architectural review committee and that the reasons were derived from the Declaration. In so finding, the Court recognized the law in Colorado that architectural review committees of associations are vested with the broad authority and discretion to consider improvement requests based on very subjective criteria and that, as long as the committee’s decision was reasonable, in good faith and not arbitrary or capricious, it must be upheld. The Court recognized that it could not substitute its judgment for that of the committee in this type of decision.
 
The Court further ruled that the association acted in good faith and did not act arbitrarily or capriciously in denying the homeowner’s request. The Court found that the factors considered by the committee for improvement requests were consistent for all applications, even though the committee did not utilize architectural forms.
 
The Court performed a site visit of the property and took judicial notice of the location of the subject unit in relation to the neighbors. The Court also took judicial notice of the location of the other two additions in relation to their neighbors. Based upon that visit and the evidence at trial, the Court found that the homeowner’s unit and proposed addition is, and would be, situated differently in relation to the neighbors than the other two additions. The Court thus found that the committee’s denial was reasonable.
 
PRACTICE POINTERS
 
So, what does this mean for associations? As this was a trial level case, even though it was in District Court, it has limited precedential value for associations but it is insightful how judges view these cases. The Judge correctly stated the standard that the decision of the committee was to be upheld absent a finding of bad faith, unreasonableness or that the decision was arbitrary or capricious.

It is important that the Judge found that the criteria used by the association, even though not found within the four corners of the Declaration, was legitimate criteria to be considered by architectural review committees. We do recommend, however, that committees incorporate the exact language of the Declaration when denying or even approving improvement requests. As the language is sometimes vague, it is okay and even encouraged, that the committee further explain the reasons for denial. In this case, the lawsuit may have been avoided had the committee used the exact language from the Declaration in denying the request. It is also important that the Judge found that the committee was consistent in its criteria it considered for improvement requests, even though it did not use architectural forms. Again, we strongly recommend that architectural committees use these consistent forms. In this case, we happened to have credible witnesses with good memories who testified that the committee considered the same criteria and acted the same way for all improvement requests for the past ten years. That is not always the case and therefore, written evidence is the best, i.e., architectural forms used in every application, showing the same criteria considered by the committee.