Recent HOA Case a Good Reminder in North Carolina & South Carolina

At Black, Slaughter & Black we keep track of legal trends and recent case law that impacts our HOA and condo clients.  Although it is a case out of Virginia, the decision in Sainani v. Belmont Glen Homeowners Association, Inc. highlights three important themes that HOAs in North Carolina and South Carolina should be aware of:  (1) there is a difference between rules and regulations and restrictive covenants, (2) the specific wording in covenants matters, and (3) HOA and condo boards must create restrictions that are clear and unambiguous.

First, there is a distinct difference between rules and regulations that govern common area and restrictive covenants that govern individual owners’ property.  In general, any HOA or condo may regulate activities upon the common area by creating reasonable rules and regulations.  Things such as pool rules would be a good example.  Any board of directors may create reasonable rules to govern what happens at the pool.  However, to control what happens on an owner’s property would require specific authority in the community’s covenants in order to do so.  

Second, the specific wording of restrictive covenants is important.  In Sainani v. Belmont Glen, the HOA created rules and regulations that attempted to prohibit seasonal decorations on individual homeowner property by regulating the dates and time of day during which owners could display decorative lighting.  There was no similar restriction in the HOA’s covenants.  The only relevant restrictive covenant the HOA had provided that “[n]o exterior lighting on a Lot shall be directed outside the boundaries of the Lot” and that exterior lighting “which results in an adverse visual impact to adjacent Lots, whether by location, wattage or other features, is prohibited.” 

The Court found that this
restrictive covenant was inapplicable because it merely prohibited directing
exterior lighting outside the boundaries of the lot and causing any “adverse
visual impact to adjacent Lots, whether by location, wattage or other features.”
 In addition, the rules and regulations
that the HOA developed to control seasonal decorations didn’t mention “adverse
visual impact” at all nor did they regulate the “location, wattage or other
features,” of the decorations.  Instead,
the seasonal guidelines attempted to regulate the dates and the time of day
during which residents could display decorative lighting. The guidelines thus went
beyond the scope of the exterior-lighting covenant and the court would not
enforce them.   

Third, to be enforceable,
restrictions must be clear and unambiguous. 
If they are, then courts will construe them according to their plain and
ordinary meaning.  Ambiguity occurs when
a restrictive covenant is reasonably susceptible of more than one
interpretation.  Where that is the case,
the legal presumption is that any doubts are to be resolved in favor of the
free use of the property.  To make sure
that restrictive covenants are well-drafted, we always recommend asking an
attorney familiar with drafting restrictive covenants to assist in the process.

This case is a good example of
how HOA and condo boards must be aware of the differences between restricting
common area versus individual owner property. 
It is also a good reminder of the importance of drafting good covenant
language in order to ensure that they are later determined to be
enforceable. 

The community association
attorneys with Black, Slaughter & Black are experienced HOA and condo attorneys
and happy to assist your community in drafting and enforcing your covenants and
other rules and regulations.  Contact a
community association attorney in one of our Charlotte, Greensboro, Triangle,
or Coastal offices today to find out how we can help your community.   

Author: David Wilson
Articles have been Reprinted with permission from Black, Slaughter, Black.

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