January 1, 1900

Andrew T. McDonald

One of the main reasons people decide to purchase and live in a property administered by an Association is the concept of "uniform appearance." The interests of the individual owners in Common Interest Communities in maintaining uniformity is apparent, as it pertains both to his or her home and to the surrounding homes.

Similarly, the Association representing the group of owners also has an interest parallel to the individual homeowners in the desire for long- term, widespread uniformity and quality. At the same time, the Association, as an enforcement agent, also has an interest in ensuring a procedurally appropriate and judicially understood system for design review. Over the years, the Association's design or architectural control committees have become significant parties in this process. This article discusses generally the role that Architectural Control Committees play in enforcing a common scheme and the interpretative questions that courts have grappled with regarding rules and procedures adopted by such committees.

Timeliness and Consistency Are Key

An important step in developing a procedure for dealing with architectural and environmental issues that often arise in Common Interest Communities is to adopt a policy that contains guidelines for the Association, its Board and its Committees. The developer partially administers this process during construction by creating a detailed and concise Public Offering Statement. Architectural guidelines of the Association should mirror the intentions of the developer, not only to contribute to organizing the process but also as a means of enhancing its validity and enforceability. As a general rule of thumb, the architectural guidelines should discuss the legal basis of the restriction, the objectives of the restriction, what must have approval of the Architectural Control Committee and what has been pre-approved by the Committee. Likewise, the guidelines should explain the procedures and the standards or criteria for approval. Applications made to the Architectural Control Committee should be processed fairly, consistently, in a timely manner, and in full compliance with the procedures set forth in the association manual.

One important consideration in testing the validity of a committee’s action on an architectural control decision is whether the committee acted in a timely manner. In Plaza Del Prado Condominium Association, Inc. v. Richman, the association sued to require a unit owner to comply with certain architectural control provisions. The board sought the removal of porch railings that the defendant unit owners had constructed, which differed in color and material from the railings on other units. The defendants argued that they had the permission of the sales representative who had been on the site during the marketing period and her supervisor and, moreover, that one year had elapsed from the time that the defendants had erected the railing until the board had raised its objections. This delay, they argued, estopped the association from requiring removal.

The Florida Appeals Court determined that there was no uniformity in the exteriors of all units, and that other unit owners had made exterior changes. Moreover, based on authority originally granted by the developer, the sales representative’s supervisor had the authority to approve architectural changes. Even were this not so, the court held that the board was under a duty to assert itself sooner, and that it was estopped from objecting to the railings after a year had passed.

However, in Heritage Heights Home Owners Association v. Esser and Chattel Shipping and Investment, Inc. v. Brickell Place Condominium Association, the Arizona Appellate Court illustrated that subsequent actions to cure previously ignored violations are not prohibited, particularly when the enforcement body has changed, such as when control is transferred from the developer to the owners. The problem boils down to consistency, which can be affected by the developer’s needs and market changes. Consistency can also be affected by lesser motives, such as inattention, unit owner control, the election of a different slate of directors, who seek consistently to enforce in the future all regulations that have been ignored in the past, or other such major alterations in the enforcement body.

The difficulty arises when a board seeks to enforce previously-existing violations against a particular owner or to enforce for the first time covenants or restrictions that were previously ignored. Both instances have found judicial support, however, a board should not automatically assume that it is too late to require observance of the regulations. An architectural or environmental decision will be upheld unless the decision is unreasonable, arbitrary, or capricious. This rule applies to after-the-fact enforcement as well as to initial denials or enforcement. All of the facts and circumstances, including consistency and time delays, contribute to whether a decision is reasonable, arbitrary, or capricious.

Judicial Review of Architectural Committee Actions

What is the scope of judicial review? If the property owner is aggrieved by a decision of the design review body, the matter could wind up in court. Which rules should the court apply in testing the design committee’s decision? May the court substitute its own judgment for the committee’s? Does the court have sufficient information or are there intangible factors to support traditional deference to the committee? Should the court afford to the committee the degree of deference that is given to an administrative agency? If so, what process must the committee follow to justify such treatment?

In Ironwood Owners Association IX v. Solomon, owners of a unit appealed a judgment in favor of their Community Association, which granted an injunction to compel the removal of eight date palms from the owners’ property. The trial court found that the owners had violated the governing documents of the association because they planted date palms without previously filing a plan with and receiving the approval of the association's design committee. Documents that set forth a detailed procedure for application and approval required the owners to obtain approval before making changes on their individually owned property.

The governing documents also contained specific standards for the appropriate committee to disapprove submitted plans. The court held that the governing documents required submission of landscape plans, and it interpreted the language broadly to include any substantial change in the structure or appearance of the buildings and the landscapes. Because there was no factual evidence bearing on the interpretation of the provisions of the governing documents, the appellate court held that interpreting the provisions was a question of law and upheld the trial court’s decision on that point. However, the request for an injunction was "in effect, a request to enforce an administrative decision on its part," which presented matters of fact for the court to review.

The Ironwood Owners case is interesting because it reviews in some detail the administrative review procedure and the process that an association must afford an owner when reviewing submitted plans and specifications. The appellate court pointed out that "despite the Association’s being correct in its contention that [the defendants] violated the governing documents while failing to submit a plan, more was required to establish its right to enforce the governing documents by mandatory injunction." The court held that the association must satisfy three steps: (1) the association must show that it had followed its own standards and procedures before pursuing the injunction; (2) the procedures must be shown to be fair and reasonable; and; (3) the association’s substantive decision must have been made in good faith and reasonable, not arbitrary or capricious. The court pointed out that the governing documents "carefully and thoroughly provided for the establishment" of the committee and imposed on it "specifically defined duties, procedures and standards" to be followed in discharging its duties. The court was persuaded by the fact that the record disclosed that the committee had exhibited a "manifest disregard" for these procedures.

In a more recent case, Bolandz v. 1230-1250 Twenty-Third Street Condominium Unit Owners Association, Inc., the District of Columbia Court of Appeals made it clear that court review of architectural approvals would be based on a "reasonableness" standard, not the more deferential "business judgment rule." Of particular interest in the Bolandz case is the court’s observation that a decision of an association board is not unreasonable simply because a judge disagrees with it. Based on all the substantive and procedural facts, a court must decide the reasonableness of a decision. Architectural standards that are enforced "reasonably, uniformly, consistently, and in good faith," are most likely to survive judicial scrutiny.

Conclusion

It is clear from recent case law that in order for architectural regulations to be valid, they must (1) have been adopted in a good faith effort to further a community purpose, as evidenced by the documents and applicable statutes; (2) represent a reasonable means ofadvancing that purpose; (3) not run counter to superior documents; and (4) be enforced reasonably and consistent with public policy. Courts have repeatedly upheld the validity of architectural controls that have followed these guidelines. Precise standards and a uniform application of architectural controls can further assist a reviewing court. Associations seeking to enforce a common scheme must seek proper counsel to educate themselves in order to ensure that the architectural guidelines adopted have a legal basis, that they properly explain the objectives of the restrictions, and to provide an efficient review procedure. As always, the attorneys at Hill Wallack stand ready to assist condominium and homeowners associations facing these issues.

Andrew T. McDonald is an associate in the General Litigation and Community Association Law Practice Groups.