Friday, December 9, 2011

Does your board have to enforce your community's governing documents?

How many times have you wondered if your board was going to get around to pursuing the blatant parking violator next door or the nightly nuisance across the street? Most folks living in a common interest ownership community assume that the board must take action to enforce the documents, but is this assumption legally supportable?

The Fourth District Court of Appeal issued a decision this week in the case of Robert Heath v. Bear Island Homeowners Association, Inc.

Heath, a parcel owner, sought an injunction to require his HOA to enforce the community's Declaration of Covenants against other owners who allegedly undertook changes, modifications and improvements to their residences without first obtaining the association's approval.

The trial court held:

The Association, however, had no legal obligation to take legal action to enforce the Declaration. Article XII, entitled “Enforcement of Declaration,” states, in pertinent part:

The enforcement of this Declaration may be by proceeding at law for damages or in equity to compel compliance with its terms or to prevent violation or breach of any of the covenants or terms herein. The Developer, the Association, or any individual may, but shall not be required to, seek enforcement of the Declaration.

Quite simply, because this plain language explicitly makes enforcement of the Declaration a purely discretionary decision on the part of the Association, Heath had no clear legal right to an injunction to compel the Association to enforce the terms of the Declaration.

Does this decision create potential issues as to whether a Board has any fiduciary duty to enforce its covenants when the language is permissive as it is in the Bear Island example above?

It certainly does make sense for boards to make strategic decisions when it comes to enforcement of the covenants. Not all rules and battles are created equal and some may be moot before a legal decision would be obtained. For example, in the case of a nuisance tenant with only 2 months left on his or her lease, the better option might be to advise the owner that the lease will not be approved for renewal as opposed to going to court to seek an injunction against the nuisance when it is likely that the lease will expire and the tenant will be removed before the injunction is granted.

The danger with a decision like Bear Island, however, is the uncertainty as to whether a board can look the other way on some violations it chooses not to fight, while pointing at the covenants and saying, "it only says may, not shall enforce". Would an association be more willing to enforce the documents on behalf of some owners and not others? The ripple effects from this case bear watching closely.

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