Enforcement of Restrictive Covenants

Question 1

What is the statute of limitations to enforce restrictive covenants?

Answer 1

4 years.

Question 2

What if there is a lapse in time when the offensive activity does not occur? Does the statute of limitations toll?

Answer 2

The statute of limitations does not toll, it begins again.

Question 3

Does the discovery rule apply to breach of restrictive covenant cases?

Answer 3

Yes. However, the Plaintiff’s lack of knowledge could not be the result of the lack of reasonable diligence to discover the breach.

Question 4

Are violations of restrictive covenants cases treated as breach of contract cases?

Answer 4

yes.

Question 5

If an association fails to enforce a restriction and the four year statute of limitations has passed, will an associatin prevail in a suit to enforce the restriction?

Answer 5

No. The suit will be dismissed based upon the statute of limitations defense.

Question 6

What is “laches”

Answer 6

It is an affirmative defense that “because of the staleness of the demand the defendant would be unconsionably prejudiced if the claim were not cut off.”

The party asserting the defense must assert:

1) There was an unreasonable delay in asserting the right; and
2) There was a harmful change in position in reliance on the delay.

Question 7

In light of the statute of limitations, is the defense of laches applicable?

Answer 7

Not generally. Barring extraordinary circumstance, the defense of laches is inapplicable if the statute of limitations has not run.

Question 8

Who has standing to enforce restrictive covenants?

Answer 8

All homeowners subject to the declaration have standing to enforce the declaration.

However, homeowners almost always look to the association to enforce the restrictive covenants.

Courts have found that an owner may not bring an action against another owner for breach of contract under the covenants.

Question 9

What does TPC 202.004(a) state?

Answer 9

An exercise of discretionary authority by a property owners association concerning a restrictive covenant is presumed reasonable unless the court determines by a preponderance of the evidence that the exercise discretionary authority is:

1) Arbitrary;
2) Capricious; or
3) Discriminatory.

Question 10

In light of TPC 202.004(a), does a homeowner have a burden of proof to rebut the presumption that the association acted reasonably?

Answer 10

Yes.

Question 11

Can an owner assert the defense of waiver?

Answer 11

Yes.

Question 12

What is the affirmative defense of waiver?

Answer 12

The association has lost the benefit to enforce restrictions by failure to enforce them resulting in the claim being waived.

It requires proving one of two elements:

1) Homeowners have acquiesced to such substantial violations as to amount to an abandonment of the covenant or wavier of the right to enforce; or
2) There has been a substantial change in conditions such that it is no longer possible to secure any substantial degree of benefit sought to be realized through the covenants.

Question 13

Does the affirmative defense of waiver require a showing that the association voluntarily and intentionally relinquished its right to enforce the restrictive covenants?

Answer 13

Yes.

The owner must show that the association became inactive or complacent in enforcing its dedicatory instruments.

Question 14

What is the test to establish whether the right to enforce deed restrictions has been waived?

Answer 14

Violations were so great as to lead the mind of the average man to reasonably conclude that the restrictions have been abandoned.

Question 15

What is the test to estblish whether deed restrictions had been abandoned?

Answer 15

1) The number, nature, and severity of the existing violations.
2) Any prior acts of enforcement; and
3) Whether it is possible to realize to a substantial degree the benefits intended through the dedicatory instruments.

Question 16

Who has the burden of proof to prove the affirmative defenses of waiver or abandonment?

Answer 16

The defendant who asserts the defenses.

Question 17

What is the “average man” test?

Answer 17

It is the test applied by courts in when defendants seek the affirmative defenses of waiver or abandonment.

The court must determine whether the “average man” would conclude from looking at the community that the restriction had been abandoned.

Courts have held that if only 11 out of 2,460 lots had violations, it would not lead the average man to believe the restrictions had been abandoned or waived.

Question 18

What is the affirmative defense of “ratification.”

Answer 18

It is where an action is “deemed to be approved”. It can be express or implied.

It can be asserted by the association or owner to show that an action was deemed to be approved.

The owner/association has to show:

1) Approval by act, word, or conduct; and
2) With full knowledge of facts.

Question 19

Is an owner entitled to bring suit against an association to enjoin collection of past due assessments until certain offisets had been satisfied?

Answer 19

No.

So long as a board has acted reasonably in the exercise of its duties the owner is not entited to damages or avoid assessments because of disagreement by actions taken or not taken by the board.

Question 20

If a declaration limits a property to “residential use only” what court caselaw exists which will allow the association to prohibit?

Answer 20

1) Home day care operation;
2) Home swimming lessons;
3) Florist Shop in garage;
4) Home music school.
5) Beauty Shop’
6) Animal Clinic

Rental property is allowed under this restriction per Tarr vs. Timberwood.

Question 21

How must we look to the “residential use only” test?

Answer 21

We must see:

1) If the business use is incidental to the operation as a residence.

To see if it is incidental, look to the percentage of income that an owner derives from the business use.

2) The extent to which the activity is taking place.

Question 22

If a declarant turns over the operation of the association, may the declarant subsequently grant easements within the association?

Answer 22

No.

The right to grant easements was extinguished by a transfer of the land from the developer to the homeowner.

Question 23

How have courts interpreted deed restrictions prohibiting mobile and modular homes?

Answer 23

They have upheld them.

They have found that a modular or mobile home is one that is previously made as opposed to being erected from scratch.

Question 24

May legislative action invalidate a portion of deed restrictions?

Answer 24

Yes.

As an example:

1) Restrictions on the ability of a board member to vote is voide;
2) Deed restrictions may not require an owner to havea wood shingle roof.

Question 25

How must courts interpret restrictive covenants?

Answer 25

Per TPC 202.003, a restrictive covenant must be liberally construed to give effect to its purpose and intent.

Look to:

1) Purpose; and
2) INTENT

At common law, restrictions were to be strictly construed in favor of free and unrestricted use of the premises. However, statutory law now requires a liberal construction to give effect to their purpose and intent.

If there is any ambiguity, the courts must apply the common law standard of free and unrestricted use of the premises.

If a restrictive covenant is ambiguous is a question of law for the court to decide.

1) Ambiguous- Susceptible to more than one reasonable interpretation
2) Unambiguous- Can be given definite legal meaning.

Question 26

Per Tarr v. Timberwood, if a property is restricted to residential use only, what does that restrict?

Answer 26

It merely limits the structure that can be erected upon Tarr’s tract and not the activities that can permissivly take place in the structure.

Question 27

What is the maximum that an owner may be fined for a violation of a restrictive covenant in:

1) HOA; and
2) Condominium

Answer 27

1) HOA- $200/day per TPC 202.004

2) Condominium- “Reasonable Fines” per TPC 82.102

Question 28

If a POA is seeking injunctive relief, what courts have jurisdiction?

Answer 28

Only district courts or county courts, not JP courts.

Question 29

What must a POA prove in order to obtain injunctive relief?

Answer 29

1) Existence of a wrongful act;
2) Imminent harm;
3) Irreperable injury; and
4) Absence of an adequete remedy at law.

Question 30

If a TRO is granted, but a court impose a bond?

Answer 30

Yes.

Question 31

If negotiations the precede the execution of a contract are primarily in a foreign language, must the seller provide a copy of all written documents in that language as well?

Answer 31

Yes. Per TPC 5.068.

Question 32

How may a prevailing party recover attorneys fees in an action based upon the breach of a restrictive covenant?

Answer 32

1) Look to dedicatory instruments;
2) Per section 5.006 of the TPC, in an action based on breach of a restritive covenant the court shall allow to the prevailing party who asserted the action reasoanble attorneys fees and costs.

Question 33

Must the court award attorney’s fees under TPC 5.006?

Answer 33

Yes. The court shall award reasonable attorney’s fees to the prevailing party who asserted the action.

Question 34

What does the court look to in determining reasonable attorney’s fees?

Answer 34

1) Time and labor involved;
2) Novelty and difficulty of the questions;
3) Expertise, reputation, adn ability of the attorney;
4) any other factor.

Question 35

Does Section 82 allow for the award of attorney’s fees?

Answer 35

Yes. TPC 82.161.

“The prevailing party in an action to enforce the declaration, bylaws, or rules is entitled to reasonable attorney’s fees and costs of litigation from the nonprevailing party.”

Question 36

What must a TUCA condominium association do before levying a fine?

Answer 36

Send the owner a written notice that:

1) Describes violation
2) States amount of Fine
3) Right to request a hearing w/in 30 days of the notice;
4) Reasonable time to cure violation and avoid fine unless owner was sent written notice to cure similar violation within previous 12 months.

Question 37

Must a pre-TUCA condominium association send notice and opportunity to cure letters?

Answer 37

No.

Not unless required by their dedicatory instruments.

Question 38

May a TUCA association give a copy of the notice of violation to the occupant?

Answer 38

Yes.

Question 39

If a TUCA association fines an owner, how must the notify the owner?

Answer 39

In writing w/in 30 days.

Question 40

Must a condominium association send written notice before:

1) Suspending right to use common area;
2) Enforce compliance with restrictive covenants; or
3) Filing a lawsuit?

Answer 40

No. Only 209 association are required to send written notice for such.

TUCA condos have to send written notice prior to fining.

Question 41

If a TUCA condominium is going to charge an owner attorney’s fees, must it send written notice?

Answer 41

No.

There is no “209.008” letter required for TUCA condos.

Question 42

Are there any requirements for postponement of a hearing or time limitations for when a TUCA fine hearing must be held?

Answer 42

No.

There are only limitations/rules for postponement and time limits for hearing for 209 associations.

Question 43

Is there an inherent right to self help to cure violations by Associations?

Answer 43

No.

Any right to self help to cure a violation must be located in the dedicatory instruments.

The association has no right to take self help action unless it it is contained in the dedicatory instruments.

Question 44

Do Associations have an inherent right to fine owners?

Answer 44

1) HOAs- no. It must be contained in their dedicatory instruments.
2) Condominiums- Yes. 82.102 allows all condominiums to assess fines for violations of the governing documents.

Question 45

Are fines and attorney’s fees secured by the Statutory Assessment Lien in condos?

Answer 45

Yes. Per the definition of Assessment under TUCA. That includes fines, attorney’s fees, and any other amount owed teh Assocation.

Question 46

Are attorney’s fees and fines secured by the assessment lien in an HOAs governing documents?

Answer 46

It depends. You have to look specifically to the governing documents to see if they were secured.

Question 47

In a suit to enforce restrictive covenants, what are the ways that a residential subdivision may recover attorney’s fees?

Answer 47

1) Dedicatory Instruments
2) TPC 5.006- suit to enforce restrictive covenants.
3) CPRC 37.001- Suit for declaratory judment
4) CPRC 38.001- Suit on breach of contract

Note- all of these statutory provisions first require suit to be filed in order to recover attorney’s fees.

Question 48

Of these methods to obtain attorney’s fees in a suit to enforce dedicatory instruments, what are mandatory/discretionary?

Answer 48

1) Dedicatory Instruments
Answer- Depends look to documents.

2) TPC 5.006- suit to enforce restrictive covenants.
Answer- Mandatory
Only party who files suit is entitled to recovery.

3) CPRC 37.001- Suit for declaratory judment
Answer- Not Mandatory

4) CPRC 38.001- Suit on breach of contract
Answer- Not mandatory. Attorney must first send 38.002 written notice and give 30 days to cure.

Question 49

What is a declaratory judgment action and where is it found?

Answer 49

It is found in CPRC Chapter 37.

It is a suit that asks a court to resolve a dispute concerning the interpretation of the dedicatory instruments of an association.

The proper parties to a declaratory judgment action is all parties to affected- e.g. all owners within the association.

Attorney’s fees MAY be awarded to the prevailing party in a declaratory judgment action.

Question 50

Where under TUCA may TUCA condominiums recover attorney’s fees when enforcing dedicatory instruments?

Answer 50

1) 82.117- Owner is responsible for costs to obtain compliance with dedicatory instruments, including attorney’s fees.

Does not require filing lawsuit.

Question 51

May non TUCA condominiums recover attorney’s fees in when enforcing dedicatory instruments?

Answer 51

1) Yes. See 82.161- But only when filing suit.

If a person subject to the dedicatory instruments violates TUCA or the dedicatory instruments, then the adversely affected person has a claim for relief.

The prevailing party may recover atttorney’s fees and costs.

Question 52

If an association obtains a monetary award against an owner, including attorney’s fees, what action should it always take?

Answer 52

Abstract the judgment in the county clerk’s office.

The Abstract is not forecloseable against homestead, but it gives notice to all parties.

Question 53

What does the Fair Housing Act prevent?

Answer 53

It makes it illegal to discriminate against a protected class:

1) Sex
2) Race
3) Color;
4) Religion;
5) National Origin;
6) Disability; and
7) Familial Status

You may not discriminate against a protected person in the terms or conditions of sale, rental, or use of a property in connection with their protected class.

Question 54

What is the carve out in the FHA that allows discrimination based upon Family Status?

Answer 54

The FHA exempts “housing for older persons” from its prohibitions on discrimination based upon familial status.

The age cut off if 80% of units being occupied by people who are 55 and older.

Question 55

Does Family Status protection under the FHA apply to pregnant women?

Answer 55

yes.

Question 56

What are the two most common scenarios where HOA violations of FHA Family Status protections arise?

Answer 56

1) Restricting the number of occupants that may live in a dwelling. You may not put a quota on the unit that would discriminate against the children’s familial status.
2) Treating children different than adults. Limiting access to facilities (pools) based upon familial status.

Limitations placed must be the least restrictive possible and be motivated solely by health and safety.

Question 57

Must a HOA allow a disabled person to make a modification to their property?

Answer 57

Yes. Under the FHA the HOA must make reasonable accomodations for the handicapped person in regards to its policies and practicies.

Question 58

What is a “Handicap” under the FHA?

Answer 58

1) Physical or mental impairment that substantially limits one or more of the persons major life activities.
2) Anyone who is regarded as having a handicap; or
3) Anyone who is treated by others as having a handicap.

Question 59

How do HOAs most commonly violate FHA handicap protections?

Answer 59

1) Refusal to allow “reasonable accomodations” of HOA policies/rules for person with handicap;
2) Refusal to allow “reasonable modifications” of existing premises for person with handicap.

Question 60

What is a “reasonable modification” under the FHA?

Answer 60

A structural change made to a property by a person with a handicap that is ncessary to afford them the full enjoyment of the dwelling.

This includes modification of exterior or exterior.

There must be a nexus between the handicap and the modification. And the modification must allow the owner to

Question 61

What are the requirements for a request for reasonable modification?

Answer 61

No requirement they be in writing.

Just have to be made to the association.

They can be made by owner or another party speaking on their behalf.

Question 62

If a person requests reasonable modifications or reasonable accomodations may the HOA make inquiries into their handicap?

Answer 62

Yes. However, an HOA may generally not make inquiries into an owners handicap status.

If modifications or accomodations are requested, an HOA may request information so that they may:

1) Verify persons handicap status under FHA;
2) Ask them to describe modification/accomodation requested.
3) Ask them to show nexus between modification and handicap

If an answer to one of the above is readily apparent, then the HOA may not request the information.

This information must be kept confidential and only dissemendated to people necessary to make the decision for the HOA.

Question 63

Who is responsible for paying for the reasonable modification under the FHA?

Answer 63

Always the handicap person requesting the modification.

Question 64

Must the handicapped owner requesting reasonable modification request HOA approval prior to making the modification?

Answer 64

Yes

Question 65

Will an undue delay by the association in responding to a request for reasonable modification be seen as a denial?

Answer 65

Yes.

Question 66

May an HOA insist on alternative modifications proposed by a handicap person under the FHA?

Answer 66

1) Interior modifications- No
2) Exterior modifications- Yes.

However, they may not impose additional costs upon the handicap person.

If they do impose additional costs and they are for aesthetic purposes, then the HOA must bear the difference in cost and the handicap person must agree.

Question 67

What is a request for reasonable accommodation under the FHA?

Answer 67

A change in policies or praties that is necessary to afford a handicap person an equal opportunity to use and enjoy a dwelling, including common spaces.

A person must request the reasonable accomodation. If none is requested, none has to be made.

Question 68

What are some examples of requests for reasonable accomodations that must be made by HOAs?

Answer 68

1) Service dogs;
2) Window ACs
3) Handicap parking spaces;
4) Sidewalk Ramps

Question 69

Must there be a nexus between the handicap and the reasonable accomodation requested?

Answer 69

Yes.

Question 70

Under what circumstances may a request for reasoanable accomodation be denied?

Answer 70

It is not reasonable because:

1) Undue financial or administrative burden; or
2) Fundamentally alter the nature of the HOA operations.