In two recent rulings, state trial court judges have rejected homeowner claims against homeowners associations (HOAs) for failing to enforce covenants against a neighbor. These rulings raise the question of whether HOA’s can enforce neighborhood covenants selectively as they see fit.
In Sugarloaf Residential Property Owners Association, Inc. v. Greenwald, the homeowners sued the HOA for arbitrarily enforcing landscaping and other property improvement covenants against them and not against their neighbors. In ruling against the homeowners, Gwinnett Superior Court Judge Michael Clark held that the HOA had the right to enforce covenants, but not an affirmative duty to do so. He interpreted the HOA’s governing documents as providing that right but not making it an obligation. Thus, the court effectively ruled that the HOA could enforce covenants as it saw fit.
Judge David Dickinson reached a similar conclusion in the Forsyth County Superior Court case of Lake Astoria Community Association, Inc. v. Ingmire v. Furr where the homeowner sued the HOA for failing to enforce neighborhood covenants consistently. Similar to the declarations in the Gwinnett County case, Lake Astoria’s Declarations provided that the HOA could not “be held liable for any injury, damages or loss arising out of the manner or quality of approved construction on or modifications to any lot.” Judge Dickenson ruled that this provision precluded Mrs. Ingmire from arguing that the HOA had a legal duty to enforce its architectural standards or design guidelines. Again, the implication with this ruling is that the HOA is free to enforce its covenants when it sees fit to do so.
Of note is that neither court specifically addressed the “arbitrary and capricious” enforcement of covenants argument advanced by the homeowners. While some would argue that such rulings negate the purpose of having an HOA and neighborhood covenants, homeowners are not without recourse. For example, in both the Gwinnett County and Forsyth County cases described above, the homeowner did sue the neighbor who allegedly caused excess surface water runoff. A question remains as to whether a homeowner would have standing to sue a neighbor for violation of a covenant when that violation did not cause direct damage to the homeowner. In other words, it is clear that a homeowner could sue his next door neighbor for directing excess surface water onto his property and flooding his basement, but it is not as clear that the homeowner could sue the neighbor down the street for putting an addition on a house without HOA approval. Additionally, homeowners always have the option of getting involved on their HOA boards in order to push the enforcement of covenants.
Nonetheless, these rulings do provide some relief to HOAs and their board members (as well as their insurers) who dread getting dragged into the middle of disputes between neighbors. These rulings cast a broad measure of protection even if enforcement is in fact selective.