The Boulder County Court recently ruled in favor of an association in a covenant enforcement matter tried by Orten & Hindman. The association sought injunctive relief requiring the homeowners to remove or modify the structure (a shed) which the owners constructed without approval or submission of plans required by the declaration. The homeowner counterclaimed against the association for breach of duty and recording a “spurious” lien. The Court ruled that the association was entitled to injunctive relief and denied the homeowner's counterclaim. The Court also awarded the association attorneys fees and costs as the prevailing party.
BACKGROUND
The declaration for the association required that all proposed “structures” must be approved by the ARC prior to being built. Rather than submitting a request, the homeowner constructed a 13 ½ foot shed on the side of his property, which was visible from the street, obstructed the neighbor’s view and stood higher than the fence and roof lines in the community. The shed was left in an unfinished condition. The association, through its manager, began sending letters to the homeowners requesting they remove the shed and submit the required plans for approval. When the homeowner refused, Orten & Hindman sent additional letters to the homeowner, including notice the association recorded a Notice of Covenant Violation lien against the property. The homeowner finally submitted plans for the shed but would not agree to reduce the height to an acceptable level. In response, the association provided the homeowners with a drawing of the shed which, if modified to conform to the drawing, would comply with the declaration. Despite the many letters and concessions made by the association, the homeowner refused to reduce the height of or make any other modification to the shed.
LAWSUIT
The association filed a lawsuit against the homeowner for injunctive relief seeking an Order requiring the homeowner to either remove the shed or modify it in accordance with the drawing previously provided. The homeowner retained counsel and filed an answer and counterclaim. The homeowners alleged the association breached its duty by selectively enforcing the declaration and filing a “spurious” lien.
COURT DECISION
The Court ruled in favor of the association, finding that the homeowner had violated the declaration by constructing a shed without approval. The Court further held that the association demonstrated good faith in complying with the enforcement of the declaration and was entitled to record the Notice of Covenant Violation lien. The Court specifically found that the whole course of dealing between the parties demonstrated good faith on the part of the association and bad faith on the part of the homeowners. The Court concluded that the association’s actions were “totally appropriate” given the history of the conflict and there was no evidence of selective or inconsistent enforcement of the covenants.
The Court denied the homeowner’s counterclaims against the association and ordered them to completely remove the shed or modify it in accordance with the drawing previously provided. The Court also ruled that the Notice of Covenant Violation lien was not required to be removed until the homeowner complied with the Court’s order.
PRACTICE POINTER
What does this case mean for associations? Because this is a county court case, it has limited precedential value for associations. Nevertheless, the case supplies insights for how judges view covenant enforcement matters. Judges like seeing associations act reasonably in trying to enforce covenants. The association should make numerous reasonable attempts at gaining compliance from a homeowner before resorting to court action. An association will have a greater chance of prevailing and will recover a greater amount of attorneys’ fees if it can show it made reasonable and substantial efforts to resolve the matter before bringing its case to the court.
[PRINTER FRIENDLY VERSION]
