Attorney talks about best ways to deal with ARC violations

Today, I have asked attorney John E. Leach with local law firm, Leach Johnson Song & Gruchow, to take over the column and talk about dealing with architectural violations in our communities.

When are architectural violations more difficult to enforce?

The enforceability of an architectural review committee violation against an existing or new homeowner with homes that have ARC violations is dependent on several factors including, the length of time the home has been in violation. If the violation has knowingly existed for more than one year, case law supports the association could not successfully enforce the violation.

If the violation has knowingly existed for less than one year, then the issue is whether the time between when the violation became known and the attempted enforcement was reasonable. This would apply equally to the owners creating the violation and any subsequent owners inheriting it. There is the additional issue whether a new owner received notice of the violation before the close of escrow.

Most associations have covenants, conditions and restrictions or guidelines, which govern the ARC process, including the committee’s failure to approve or disapprove of the location, plans and specifications. Many covenants state that if the ARC fails to approve or disapprove an application within some period of time, often 30 days, the application is deemed to be approved under the condition that the architectural request is consistent with the set guidelines of the association. However, many of the more recently drafted CC&R’s provide that if the ARC application is not addressed within the stated time period, the ARC application is deemed denied.

With regard to unenforced ARC violations, the longer an unapproved modification has been allowed to remain, without some form of enforcement action, the more affirmative defenses a homeowner has to object.

There are a number of court cases to support these affirmative defenses by a homeowner.

Laches is an equitable doctrine that may be invoked when one party’s delay in enforcing its rights works to the disadvantage of the other (Home Sav. Ass’n v. Bigelow, Nevada, 1989).

For example, if a homeowner constructed a second floor on their home or constructed a casita on their property, their argument for laches would be stronger than if the ARC violation was for landscaping due to the cost involved in restoring the property to its original condition.

Wavier is the voluntary and intentional relinquishment of a known right, with full knowledge of all the material facts. (Thompson v. City of N. Las Vegas, Nevada 1992). Whether an association has waived its rights to enforce its restrictive covenant regarding an unapproved modification or improvement to a home is a fact-based inquiry into what could be observed and what was done, or better said, not done when the violation became known. A defense of waiver would be stronger if the facts indicated the association had cited a homeowner for other architectural violations but ignored the unapproved installation of some improvement.

Abandonment of a restrictive covenant is the defense that violations of a specific covenant have become so general and pervasive that the original purpose of the covenant is now frustrated and any perceived benefit of the restrictive covenant no longer exists. Therefore, the provision should not be enforced against any owner. (Gladstone v. Gregory, Nevada, 1979). However, abandonment “must be established by clear and unequivocal evidence of acts of a decisive nature.”

A court might consider how pervasive violations of the landscaping standards were throughout the community, but generally, courts are reluctant to declare a covenant abandoned, absent significantly charged circumstances.

Where the association has failed to take any enforcement action based upon these defenses, the association’s likelihood of success would probably not succeed in an enforcement action is substantially reduced if challenged. This is particularly true if the violation is visible and the association has knowledge of it or should know of it. If the violation has been knowingly in existence for less than one year, the association may make a business decision whether or not to pursue fines, removal or modification of the ARC violation based upon other factors, such as the cost of modification or removal, or the length of time the violation has been in place, among other factors.

Nevada Revised Statute 116.31031 (4) must be considered in any decision and whether the violation is being enforced within a “reasonable time after the discovery of the alleged violation.”

As to new homeowners, if the previous board took no enforcement action on an ARC violation by a previous homeowner and now a new homeowner has purchased the property, the association may not be able to enforce the violation. If the violation has been in place for one year or more, the defenses by the new and prior homeowner are enhanced. If the association had knowledge of the violation, chose not to take any action, did not give the buyer notice of the violation then the buyer may assert the association has waived its rights to take action.

If the violation has been in existence for less than one year, the factors of reasonable time, notice, cost of removal or modification and the visibility of the violation must be taken into account in determining whether an enforcement action against a new homeowner is a viable option. If the buyer had no knowledge and there was no disclosure by the association, the new homeowner’s argument for waiver and laches are stronger than if the new homeowner had knowledge.

Associations should weigh these factors on a case-by- case basis and determine what is fair and equitable for violations that existed for less than one year.