Colorado Homeowner Associations: Covenant Disputes (Part 3 of 4)

Note: This article is part of a series. Click here to read the entire series.

Most Colorado residential developments have covenants that establish the obligations of the homeowners. Disputes arise over just what a homeowner can and cannot do on his real property. When those disputes arise, the courts must interpret the covenant in dispute.

The recorded documents of a homeowner association contain covenants. A covenant is a promise by the homeowner to limit his conduct. For example, the homeowner may agree not to build a fence, park a motor home in his driveway or post billboards in his front yard.

The promise is not explicit. The homeowner does not have to sign a document promising to limit his conduct. The covenant is part the governing documents recorded in the real property records. Since the covenant is part of a recorded document, recorded prior to the homeowner taking title to the home, simply taking title to the home completes the promise.

When a dispute arises, interpreting covenants can be difficult. There may not be a clear answer to the dispute. However, there are certain principles that guide the court in coming to a decision. Covenants are narrowly construed in favor of the unrestricted use of real property.

That sounds great, doesn’t it? Well, there is another general principle. When interpreting covenants, courts must follow the dictates of plain English. The court will enforce covenants that are clear on their face.

This second principle can negate the first principle. For example, the covenants say no ¾ ton pickup trucks or larger on the real property. What about a one-ton work van on the same chassis as a one-ton pickup truck? Narrowly construing the covenant would limit the restriction to pickup trucks. However, the restriction appears pretty clear – no large vehicles. To allow one-ton vans but disallow one-ton pickup trucks may not be enforcing a covenant that is clear on its face.

Here is another example. The covenants prohibit offensive or obnoxious odors. A person has 4 horses and the resulting manure. Is that an obnoxious odor? Some would say yes. Horse lovers might disagree and call it … aroma therapy.

Some will argue words are never clear on their face. Every lawyer remembers the law school contracts case arguing about the meaning of the word “chicken”. Is it a broiling chicken or is it a stewing chicken? In a commercial setting, it makes a difference. And just to make things interesting, the meanings of words change over time.

Arguing over covenants can be very expensive. The losing party in a covenant dispute usually pays the winner’s legal fees. So what is a person to do? We suggest reading all the covenants, all the governing documents and applying a little common sense. Judges are regular people. If the conduct complained of is disturbing others or if the offending person is obnoxious, the court will probably look for a way to enforce the covenant. However, just because others do not like the person or their conduct, that is not enough. There must be a written prohibition in the governing documents used as a basis for stopping the offensive conduct.

As an upshot of covenant disputes, law firms specializing in updating governing documents tend to write those documents very broadly. The homeowner association is given great latitude in interpreting the covenants and writing policy and procedure. While this tends to limit covenant disputes, it places quite a bit of power in the hands of the association.