Case Study- Harrison vs. Land’s End of Emerald Isle Association, Inc.
692 S.E.2d 487 (North Carolina 2009)
By Tim Sellers
NOTE: We originally reported on this case in 2010. Questions we have been asked over the past few months lead us to believe that many would benefit from a refresher on the case and its implications.
We regularly remind our clients of the potential problems if they rely on broad and general provisions contained in their restrictions (such as “nuisance” clauses) to support enforcement actions. North Carolina cases in recent years have upheld the authority of an association to enforce covenants through both administrative fines and service suspension proceedings, as well as civil actions for injunctive relief. All of those cases focused on the acts of the association and the owners and whether or not a violation had actually occurred. No recent North Carolina case has focused on the enforceability of the restriction itself . . . until now.
In Harrison vs. Lands End of Emerald Isle Association, Inc., Mr. and Mrs. Harrison asserted that their neighbors, the Keadeys, had violated Article 13, Section Z of the community’s restrictive covenants which provided, in part, as follows:
The owner of each Lot shall maintain his lot and all structures thereon in a clean and sightly condition and shall cause such lot to be mowed, all structures to be painted and cared for so as to maintain a compatible aesthetic appearance with other well-maintained lots and structures. Failure to comply may result in declaring such property a “continuing nuisance” until such time as the condition is rectified. . . . (Emphasis added)
There was an “area” on the Keadeys’ lot that was densely vegetated with live oaks, wax myrtle trees and other vegetation and drained relatively quickly, prior to the construction of their home. During construction on the lot, the area was stripped of its native vegetation and a retaining wall approximately four feet tall was built on the western border. This created conditions in the area that the court described as follows:
Presently, the area is swampy and filled with cattails and storm water in excess of three feet deep is sometimes retained in the area of concern. Storm water has remained stagnant in the area for as long as 10 months before finally evaporating or soaking into the swampy soil.
The condition of the area was certainly objectionable. The Keadeys, however, contended that the restrictive covenants providing that lot owners must maintain their lots “in a clean and sightly condition . . . so as to maintain a compatible aesthetic appearance with other well-maintained lots and structures” was void for vagueness and unenforceable. The trial court agreed with the Keadeys and refused to enforce the restriction. The Harrisons appealed and the Court of Appeals agreed, never reaching any analysis or evaluation of the condition itself.
The Court’s Reasoning
In reaching its decision, the court relied on the well settled principles of law as to the enforceability of restrictive covenants. These are principles with which every association should be familiar as they may be applied in a variety of different situations and circumstances where the association seeks to enforce the provisions of its Declaration of Covenants, Conditions and Restrictions. Specifically, the court said:
The word covenant means a binding agreement or compact benefiting both covenanting parties. Covenants accompanying the purchase of real property are contracts which create private incorporeal rights, meaning non-possessory rights held by the seller, a third party, or a group of people to use or limit the use of the purchased property. Judicial enforcement of a covenant will occur as it would in an action for enforcement of “any other valid contractual relationship.” Thus, in accordance with the general principles of contract law that the terms of a contract must be sufficiently definite for a court to enforce them, a covenant is void for vagueness where there is no “clear and unambiguous” standard contained in the covenant by which the court can “objectively determine” if a party’s conduct conforms to the standards set forth therein.
Based on this statement of the law, the court found that the restriction requiring lots of be kept in a “clean and sightly” condition was ambiguous and susceptible to various conflicting interpretations. Likewise, the court found that the covenant requiring a “compatible aesthetic appearance to other well-maintained lots” to be subject to individual subjective interpretation based on personal preference. Finding no “ascertainable standard” contained in the covenants by which the court could “objectively determine” whether the Keadeys’ conduct conformed with the covenant, the court held that enforcement of the covenant would be arbitrary and that the covenant at issue was “void for vagueness.”
The Take Away
Associations often turn to general subjective standards and prohibitions contained in their restrictions and rules to pursue enforcement actions against individual owners. The Harrison case underscores the risk in doing so. Wherever possible, the association should rely on and apply specific objective standards contained in their governing documents and should avoid reliance on broad general standards like those the Harrisons sought to enforce against the Keadeys. We see this most frequently when associations see and attempt to apply a general prohibition against “nuisances” to specific owner conduct or lot conditions. The clear message from the court in the Harrison case is that reliance on broad subjective standards is risky and will likely not be enforced by the courts.
The Good News
For some reason, the Court of Appeals decided not to officially “publish” this opinion. The following notation appears at the beginning of the case report:
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Because the court did not publish this decision, it does not constitute binding authority and is confined to the facts of the case involving the Harrisons, the Keadeys and Lands End of Emerald Isle Association, Inc. It does, however, give a clear indication as to how the court (or at least the three judges who heard the case on the court) views restrictive covenants and the enforceability of broad general restrictions which are subject to individual subjective interpretation and personal preference.
Please feel free to call or email Tim Sellers with any questions about this post.