Private covenants requiring improvements to be harmonious with surrounding structures are not per se ambiguous

by Hannah Dankbar

Curtis Acres Association v Stephan Hosman
Nebraska Court of Appeals, January 13, 2015

Hosman began construction of a boathouse in Douglas County, Nebraska. Curtis Acres Association manages the properties where Hosman’s property is located. The Association filed suit against Hosman asking the court to make Hosman stop construction and remove the boathouse because he was violating multiple restrictive covenants.

Before Hosman bought his property in the Curtis Acres subdivision in 1990 the Association had filed a “Declaration of Covenants, Conditions, Restrictions and Easements” (CCR). Part of this document requires residents to get pre-approval of any improvements on their lots. Hosman submitted three sets of plans for his residence before being approved. The Association’s CCRs were amended four times subsequent to this. One of the amendments required residents to submit two plans in order to get approved and if approval was not granted within thirty days the plans were deemed disapproved. This amendment was added to ensure that future projects were in alignment with Nebraska law and with the master plan for the subdivision.

Three years after the amendment was added Hosman began construction of a boathouse on his lot, approximately 15 feet from the edge of the lake. The Association sent Hosman a letter telling him sought approval of his plans before beginning construction. Hosman submitted a one-page hand drawn picture of his boathouse. Hosman included dimensions, color and materials on the page, noting that the siding would be the same as on his residence and the roof was to be blue in color. The Association informed him that his drawing was insufficient, and that “a blue standing seam roof is not acceptable.”  The Association further informed him that “structures will be set back from the shoreline so as not to impede one’s neighbor’s views.  We suggest 100′.”  Hosman continued construction and in October 2010 the Association filed a complaint against him. In summary judgment the court found that the Association can enforce their covenants and required Hosman to stop construction.  Hosman appealed that ruling.

Hosman claiming that the court was wrong in deciding, “(1) that the covenants provide a clear, articulable standard for approval of building projects; (2) that the enforcement of the covenants against Hosman was reasonable; (3) that the Association did not have unclean hands in the administration of its covenants.” Hosman does not fight the fact that he is not obeying the covenant.

As for Hosman’s first argument, the Nebraska Court of Appeals decided that the relevant covenants were not ambiguous and gave a ‘sufficient’ standard for approval. In Normandy Square Assn. v. Ells the Nebraska Supreme Court held that “restrictive covenants that permit a homeowners association to approve or disapprove improvements based on a standard of whether such improvements conform to the harmony of external design and location in relation to surrounding structures are not per se ambiguous; rather, such covenants are enforceable provided that the authority is exercised reasonable within the framework of the covenants’ stated purposes.” Following the ruling in Ells the court found that in this case the covenants are enforceable because the stated purpose is to “protect the value, character and residential quality of all lots.”  According to the court this statement does not create ambiguity and the Association had the power to disapprove the boathouse.

Next is the question of whether the authority was reasonable exercised. The Association decided that the blue roof did not meet the standards of the neighborhood, and the boathouse was too close to the shore. Hosman argued that there are other boathouses within 100 feet of the shore, so he should be allowed to have his that close as well. The Association allowed the houses to be that close before changing the rule. Since the rule changed no new boathouses have been built that close to the shore, and Hosman did not show that any of the other boathouses have blue roofs. The Association properly changed the rule, and properly enforced the rule once it had been changed.

Third, Hosman argued that the Association inconsistently enforced the covenants. The Association admitted that under extenuating circumstances there were two incidences where residents were given extensions on timeframes set forth in the covenants; however, the covenants themselves allowed for such a deviation.  The court found no merit to Hosman’s argument.

Lastly, Hosman argued that the Association treats him differently because they do not like him. There was evidence to this effect, including a letter one member of the Association sent to Hosman’s home containing derogatory comments and insinuations about Hosman’s character.  Hosman failed to demonstrate, however, any link between the actions of individual members of the Association expressing their dislike towards him and the decision making process of the Association as a whole.

The Court of Appeals affirmed the decision of the trial court to order Hosman to remove his boathouse from his property.

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