So, the young man living at 202 Lazy Loop Lane hasn’t mowed his lawn in over a month. The couple just down the street has two maltese that take off on a nightly duet with the moon. Another neighbor has been camping in their motor home for the past month…in their front yard. What about the bank owned ranch sitting vacant on the corner? The rest of the community is completely up in arms and is demanding action.

 

What is a conscientious Board to do?

 

 

Covenant enforcement is one of the most unpleasant tasks faced by the Homeowners Association. It is never an easy task to tell your neighbor they must mow their lawn or muzzle their pets. While most owners realize that there are certain rules that they must abide by when moving into a covenant controlled community, some do not; and others simply choose to ignore the rules all together.

 

In these situations, it is up to the Board to exercise its authority to ensure compliance with the covenants. Here you will find an introduction to some of the options a Board may consider when pursuing covenant violations. Please keep in mind that information is being made available for the purposes of helping you understand what the homeowners board may or may not choose to do and is for discussion purposes only.  This is not meant to offer a remedy of any kind.  The Homeowners Board of Directors along with Association members will determine what actions work best to remedy any issues said community may have.  The Association should contact legal counsel to discuss their options before moving forward with an enforcement action.

 

 

Some Basics First.

 

 

Q: Must the Board do anything to enforce the covenants?

 

A: YES.

 

In general, it is the Board’s fiduciary duty to enforce the covenants in its community. However, this doesn’t mean that they must file a lawsuit against every owner who hasn’t taken down their holiday decorations yet. It does mean they should consider the evidence in each situation and decide whether or not, in its business judgment, it is worth pursuing an alleged violation, and if so, what action they should take. An owner’s complaint of a barking dog may not be worth pursuing if it’s unclear who owns the dog in question. On the other hand, it is likely worthwhile to pursue an Owner who has painted her home neon green in violation of architectural standards.

 

When considering the various options available to an Association, the first thing a Board should do is consult their governing documents. Typically the Association’s Declaration will specifically state what options are available to enforce the covenants. If not, Colorado law provides basic rights for most Associations, such as imposing fines or instituting a lawsuit. Importantly, we do not suggest some remedies, such as self-help or filing a covenant violation lien, without specific authority in the Association’s Declaration.

 

 

 

What can the Association do?

 

 

 

·        Impose a fine. This is the most typical form of covenant enforcement. Most Associations have the power to impose reasonable fines for violations of the declaration, bylaws, or rules and regulations of the association. However, an owner must be given notice of an alleged violation and an opportunity to be heard regarding the violation before a fine can be imposed.

 

 

Pros: Inexpensive to the Association; typically effective is the fines are high enough (but they must be reasonable); quicker results then most other remedies.

 

 

Cons: Ineffective if the fines are too low (just a cost of doing business); does not remedy the underlying violation.

 

·        Small Claims Court. An Association has the power to institute a lawsuit on behalf of its members. In small claims court the Association represents itself (typically a Board member or two) in an informal legal setting without an attorney. A small claims court can issue a money judgment or issue an injunction requiring an Owner to remedy the violation (or allowing the Association to remedy the violation at the Owner’s expense).  Small claims courts can address violations that cost less than $7,500 to remedy.

 

 

Pros: Inexpensive for the Association; effective at remedying the underlying violation.

 

 

Cons: Association must represent itself.

 

·        County Court. Similar to small claims court, but the Association can (but doesn’t have to be) presented by an attorney. County courts can address violations costing less than $15,000 to remedy. Attorney fees may be awarded to the prevailing party, so this option should not be entered into lightly.

 

 

Pros: Very effective at remedying the underlying violation; attorney fees available if successful.

 

 

Cons: Can be costly to the Association if the lawsuit is not successful.

 

·        Liens. If provided for in the declaration, an Association may file a lien with the County evidencing the violation.   This gives everybody, including potential purchasers or mortgage companies, notice of the violation.

 

 

Pros: Inexpensive.

 

 

Cons: Typically does not remedy the underlying violation until the property is sold or refinanced.

 

·        Self Help. If provided for in the declaration, an Association may enter onto an owner’s property and remedy a violation, charging the costs to the owner. If this option is chosen, the Association should take great care to document, by video or photograph, the actions it took.

 

 

Pros: Quick and effective remedy for the underlying violation; inexpensive if the costs can be collected from the owner.

 

 

Cons: Can be expensive if the costs cannot be collected; opens the Association up to potential liability for trespass, damage to property, or personal injury.

 

·        Suspension of Services/Privileges. If provided for in the Declaration, an Association, after notice and hearing, may suspend the membership privileges of an Owner. Generally, this should not include the suspension of basic services necessary for the health and safety of an owner, such as water or heat.

 

 

Pros: Inexpensive.

 

 

Cons: Ineffective if there are no substantive privileges (like use of a pool) or if an Owner does not utilize the privileges.

 

·        Mediation/ Arbitration. Some Association’s governing documents require mediation/ arbitration instead of pursuing a lawsuit. Generally this is in front of a third party mediator who makes a decision after both sides have had a chance to state their case. This can be non-binding or binding, depending on the documents and what the parties agree too. Non-binding mediation is typically informal, while a binding arbitration can resemble a complex lawsuit.

 

 

Pros: Mediation is more neighborly and less confrontational than a lawsuit; effective if you have a good mediator.

 

 

Cons: Can be expensive (for both attorney and mediator time); not effective in situations where there is no middle ground (the green house must be repainted).

 

·        CALL THE POLICE or Code Enforcement. Most counties, cities or towns have ordinances that address things such as on-street parking, storage of unsightly objects, or the construction of unauthorized improvements. Loud noises or threatening behavior may also be a criminal violation.

 

 

Pros: Inexpensive; can be effective in the right circumstances.

 

 

Cons: City code may not address the underlying violation; law enforcement may be unresponsive.