IT’S GOOD TO BE KING

(MAKING UP THE RULES AS YOU GO ALONG)

An Opinion By Jean Winters, Esq.

Published March 6, 2008

Purpose of Covenants

The purpose of most modern covenants is to maintain the community’s general plan or scheme of development — to preserve the character of the neighborhood.  For example, if houses were designed by Mies van der Rohe with an eye to minimalism —a “less is more” focus on functionality over form-- it might look out of place for a homeowner to build an addition with Gothic Revival flying buttresses.  So the purpose is to maintain some sort of consistency (not uniformity).   Unfortunately, this purpose has been increasingly obscured by an overly broad interpretation of overly broad language of the covenants.  It has further been obscured by the failure of many boards to even read the covenants.

Board Rules

Boards are empowered to enact rules to further the purposes of the association and enforce the restrictive covenants.  The scope of that authority should be defined in the covenants.  Not surprisingly, courts have held that board-enacted rules must be consistent with those covenants (usually called the Declaration of Condominium or Declaration of Restrictions in an HOA).  While courts treat covenants as presumptively valid, board-enacted rules are not “cloaked with the same presumption of validity.”  However, this has not stopped boards from making up the rules as they go along.  Too many boards interpret the power to create rules as carte blanche authority to remake the community in their own image. 

This phenomenon is best illustrated by this interaction between board member and homeowner:

Homeowner:   “Vinnie, why don’t you read the covenants you are so insistent on enforcing?”

Vinnie:    “I can’t read all that legal mumbo jumbo.” 

Homeowner:  “Then why are you on the board?”

Vinnie:  “Because I know what is good for the community.”

South Florida Examples

Suppose an association’s covenants contained broad language about maintaining the general character of the community.  Although the homes were not all the same, they did share a commonality of the Spanish architecture so common here in Florida — from red tile roofs and stucco construction to various styles of red, white or neutral clay or tile mailboxes.

Mailboxes

The covenants contained the usual requirement that architectural changes must be approved by the board.  This included changes to mailboxes.

• A duly unelected Board — so common here in Florida — decided after 20 years that they were going to “crack down” on the miscreants in the neighborhood, and enforce the covenants to “preserve the property value” of their homes.

• The Association Secretary found a Green Victorian mailbox he really liked. To “preserve the value” of their homes, the Board decided to mandate homeowners remove their mailboxes, and install the Green Victorian mailboxes to go with their Spanish style architecture.

Roofs

In this example association’s covenants, shingles were expressly prohibited.  The bylaws required an architectural review board (ARB) of no less than three homeowners. 

• In this example association, the ARB is a single homeowner who is friendly with the board.  He had a couple of friends that wanted to install the flat, tin neoclassical style roof.  No problem.  The “ARB” readily granted approval for these roofs.

Basketball Hoops

The covenants contained an express prohibition against free-standing basketball hoops.

• Since most of the board members had young children, the board decided to enact a rule to allow basketball hoops.

Storm Shutters on the Back Windows

The covenants had a general requirement that a homeowner obtain ARC approval for improvements.  Additionally, the covenants had very specific restrictions about everything from the style of roofs, cars left in the drive instead of garage, paint color of the home — a laundry list of about 20 specific restrictions.  What it did not have is anything remotely related to hurricane shutters.

• A homeowner had obtained the approval of the board in 1999, through a letter of the Board President, to buy and install hurricane shutters, and to leave the back shutters closed when the homeowner left town, for security purposes and storm protection in the event of a storm.

• A few years later, a new board enacted a “rule” prohibiting the closure of shutters on the front or back windows, longer than 24 hours before and after the “threat of the storm.”

• The homeowner complained, and left his back shutters closed when he left town (in hurricane season).

• The homeowner was fined $1,000.

• The property manager sued him in small claims court.

WHAT IS WRONG WITH THIS PICTURE?

1. VIOLATION OF COVENANTS — A board cannot enact rules that violate the covenants, as in the example above about Basketball Hoops.

2. AUTHORITY NOT REASONABLY INFERRED from the governing documents.

3. SELECTIVE ENFORCEMENT – When the board makes up the rules as it goes along, selective enforcement is a “given.”

4.  NO BASIS FOR RULE, other than personal preference.

5.  NO COST BENEFIT ANALYSIS.  No investigation whatsoever into the benefits or effect on “property value.”  Boards seem to think that what they believe “looks good” will necessarily increase property value. 

5. LAW BY INTIMIDATION -- Circumvention of Fine Due Process - HO Gets ATTORNEY LETTER without ever being fined, or being told that he has a right to a hearing for a fine.

6. LAW BY INTIMIDATION: 2.  Attorney charges homeowner who is not the client — Lawyers send “warning” letter to homeowner, threatening him with further legal action if the offending conduct – whatever that is -- does not cease.  Demands homeowner pay for attorneys’ fees for sending the letter -- $200-$250. No provision in governing documents that allows association to charge the homeowner for the attorneys’ fees it incurs, prior to determination of prevailing party.

7.  LAWYER REWRITING STATUTES -- Homeowner realizes that it could cost him $20,000 or more to fight a lawsuit.  He also does not have legal counsel, knows the deck is stacked and the board is using OPM, and believes the association lawyer.  He signs letter by association attorney and, therefore,

• Must waive his rights to pretrial mediation;

• Unconditionally agrees to “comply” with board rules;

• Pays attorneys’ fees (now $1,000);

• Must do whatever the board says, even if the board demand is illegal and not reasonably inferred from covenants.

THE LAW