Reasonable Enforcement of Deed Restrictions - Dallas … · · 2017-07-146 One purpose of deed restrictions is to protect property values. Violations of deed restrictions most directly
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Marc D. MarkelMarc D. Markel Roberts Markel P.C.Roberts Markel P.C. Attorneys and Counselors at LawAttorneys and Counselors at Law
Houston Houston ♦♦
Dallas Dallas ♦♦
San Antonio San Antonio ♦♦
Sugar Land Sugar Land ♦♦
BeaumontBeaumont
Dallas Bar AssociationDallas Bar Association Real Estate SectionReal Estate Section
Reasonable Enforcement of Deed Reasonable Enforcement of Deed RestrictionsRestrictionsSeptember 13, 2010September 13, 2010
One purpose of deed restrictions is to protect property values. Violations of deed restrictions most directly affect the value of adjoining lots. Cox v. Melson-Fulsom, 956 S.W. 2nd 791, (Tex App. Austin 1997, no writ).
An Owner burdens his own land with restrictions because of the fact that a like burden will be imposed on his neighbor’s lot and this will be beneficial to both lots. Curlee v. Walker, 244 S.W. 2 497, (Tex 1922).
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
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Sec. 202.001. Definitions. In this chapter:(4) “Restrictive Covenants”
– Covenant, Condition or Restriction contained within a Dedicatory Instrument
(1) “Dedicatory Instrument”– Governing Documents covering the Establishment,
Maintenance and Operation of an Association– Includes:
• Restrictive Covenants• Bylaws• Rules and Regulations• All lawful Amendments
Origin of Deed Restrictions Origin of Deed Restrictions
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
Before assessing property damage or fines the Association must provide notice:
– Of the violation or property damage– The amount of fine or damage charge– Opportunity for hearing if timely requested– Opportunity to cure by a specified date – unless
a similar notice was provided within the last 12 months
– Notice of the levy of a fine sent to owner within 30 days of the fine
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
15
Source of Authority to Enforce Deed Restrictions(Planned Unit Development “PUD”)
§204.010 Texas Property Code*Unless otherwise provided by the governing documents the association may:
(10) If notice and an opportunity to be heard are given, collect reimbursement of actual attorney’s fees and other costs incurred by the property owners’ association relating to violations of the subdivision’s restrictions or the property owners’ association’s bylaws and rules;
* §204 of the Texas Property Code only applies in limited areas
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
16
Source of Authority to Enforce Deed Restrictions
§209.006 Texas Property Code
The Association or its agent must give proper notice to an owner:
–Before an association may suspend an owner's right to use a common area–File a suit against an owner
•other than a suit to collect an assessment or •foreclose under an association's lien
– Charge an owner for property damage– Levy a fine for a violation of the governing documents
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
19
§209.007 Texas Property Code– Hearing not later than the 30th day after the date the
board receives the owner's request for a hearing– Notification required to owner as to hearing specifics at
least 10 days before the hearing date• Date – time – location –etc.
– One postponement each is permitted for a period of not more than 10 days.
– Additional postponements may be granted by agreement of the parties.
– The owner or the association may make an audio recording of the meeting.
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
20
§209.007 Texas Property Code
– Notice and hearing provisions are not applicable:– If a suit is filed seeking a temporary restraining order or
temporary injunctive relief– If a suit is filed that includes foreclosure as a cause of
action– Either party may file a motion to compel mediation– to a temporary suspension of a person's right to use
common areas– if the temporary suspension is the result of a violation that
occurred in a common area and involved a significant and immediate risk of harm to others in the subdivision.
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
21
Enforcement Enforcement ––
Community AssociationsCommunity Associations
The Board
Ultimate responsibility for the enforcement of the Association’s deed restrictions lies with the Board of Directors
Failure to act can have legal consequences– Attractive Nuisance– Foreseeable Crime
1. Directors may be liable for not acting - e.g. Attractive Nuisance, security measures relating to foreseeable crime. 2. Directors can contract for Manager to enforce rules, but cannot delegate responsibility. 3. Manager's responsibility to keep Board informed, and obtain Continuing Education. 4. MaxTrac, Unit Folders, Minutes of Meetings, Book of Resolutions.
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The Manager’s RoleManager is an agent – and its authority can not exceed that of its principalManager’s authority is found in the management agreement and Board directivesManager’s role is to guide and assist the Board with the enforcement of the dedicatory instruments
Manager should refuse to act if directed to act in illegal, immoral, or unethical manner, outside the scope of the deed restrictions or management agreement
1. Directors may be liable for not acting - e.g. Attractive Nuisance, security measures relating to foreseeable crime. 2. Directors can contract for Manager to enforce rules, but cannot delegate responsibility. 3. Manager's responsibility to keep Board informed, and obtain Continuing Education. 4. MaxTrac, Unit Folders, Minutes of Meetings, Book of Resolutions.
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Enforcement by Municipal Utility Districts
– Standing to enforce dependent upon value of the property being in issue
– If non-enforcement effects property values of lot with restriction or others in the area
Enforcement Enforcement ––
Municipal Utility DistrictsMunicipal Utility Districts
1. Directors may be liable for not acting - e.g. Attractive Nuisance, security measures relating to foreseeable crime. 2. Directors can contract for Manager to enforce rules, but cannot delegate responsibility. 3. Manager's responsibility to keep Board informed, and obtain Continuing Education. 4. MaxTrac, Unit Folders, Minutes of Meetings, Book of Resolutions.
Sec. 203.003 Texas Property CodeCounty attorney authorized to enforce restrictions.
– (a) The county attorney may sue in a court of competent jurisdiction to enjoin or abate violations of a restriction contained or incorporated by reference in a properly recorded plan, plat, replat, or other instrument affecting a real property subdivision located in the county, regardless of the date on which the instrument was recorded.
1. Directors may be liable for not acting - e.g. Attractive Nuisance, security measures relating to foreseeable crime. 2. Directors can contract for Manager to enforce rules, but cannot delegate responsibility. 3. Manager's responsibility to keep Board informed, and obtain Continuing Education. 4. MaxTrac, Unit Folders, Minutes of Meetings, Book of Resolutions.
The person/entity that brings an action to enforce restrictive covenants and prevails in that action shall be entitled to reasonable attorney’s fees (5.006 Property Code)
With a condominium the person/entity that prevails shall be entitled to reasonable attorney’s fees (chapter 82 Property Code)
Authority to Enforce Deed RestrictionsAuthority to Enforce Deed Restrictions
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
31
Authority to Enforce Deed RestrictionsAuthority to Enforce Deed Restrictions
(Planned Unit Development)§ 209.008. Attorney’s Fees
(c) All attorney's fees, costs, and other amounts collected from an owner shall be deposited into an account maintained at a financial institution in the name of the association or its managing agent. Only members of the association's board or its managing agent or employees of its managing agent may be signatories on the account.
(d) On written request from the owner, the association shall provide copies of invoices for attorney's fees and other costs relating only to the matter for which the association seeks reimbursement of fees and costs.
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
32
The Lawsuit The Lawsuit --
The Temporary Restraining Order
Issued by Court without testimony
Not favored
Should not be requested without a proper reason
Must have something to show the court to establish necessity
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
33
The Lawsuit The Lawsuit --
The Temporary Injunction
MINI TRIAL -Issued by Court with testimony and after:
Determination that money damages will not be sufficient
The applicant is determined to more than likely prevail at time of trial
Bond is set and postedCase is set for trial
Irreparable harm required?
Indian Beach v. Linden – required showing of irreparable injury
Most decisions state no burden of proving any actual harm
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
The Texas Uniform Condominium Act provides that these sections are applicable to all condominiums, even those created before the Act. Declaration Articles of Incorporation By-Laws
35
Free use of land
Liberal Interpretation
Reasonableness
Interpretation of Restrictive CovenantsInterpretation of Restrictive Covenants
– For many years the law as to enforcement of deed restrictions was (and still may be) to favor free use of the land and against those who seek to restrict the use of the property in cases of ambiguity.
Interpretation of Restrictive CovenantsInterpretation of Restrictive Covenants
Covenants should be liberally construed to determine the framer’s intent, and if there is any ambiguity as to that intent, the covenant should then be strictly construed in favor of the free and unrestricted use of the premises.
Interpretation of Restrictive CovenantsInterpretation of Restrictive Covenants
within the restricted area as to amount to an abandonment of the covenant
– Change in conditions in the restricted area or surrounding area --- no longer possible to secure any substantial degree of benefits to be realized through the covenants.
Interpretation of Restrictive CovenantsInterpretation of Restrictive Covenants
– The fairness to a lot owner must be weighed against the fairness to their lot owners who have acquired their property on the strength of the restrictions.
Interpretation of Restrictive CovenantsInterpretation of Restrictive Covenants
– The ARC may grant a variance to as to any provision in these restrictions as a result of hardship, natural obstruction, topography, environmental considerations or aesthetics
“A physical or mental impairment which substantially limits one or more of such person’s major life activities, a record of having such an impairment, or being regarded as having such an impairment”
Gittleman v. Woodhaven Condominium Ass’n, Inc., and Maintenance Management, Inc., 972 F. Supp 894 (U.S. Dist. Ct. New Jersey, 1997).As condominium associations assume more powers traditionally associated with the state, it is only fair that they assume more of the obligations for ensuring that the rights of the unit owners they represent are protected.