Comments on Covenants

Division Three of the Washington Court of Appeals recently circulated an unpublished decision in the case of Mitschke v Nielsen in which several legal concepts regarding land use covenants, conditions, and restrictions (CCR's) were addressed. Many people think of CCR's as the tool of homeowner associations to enforce neighborhood rules such as house color, architectural standards, use restrictions, and such that some people like to have, but are considered to be outside the power of government to enforce (or trivial from the public point of view).

CCR's are basically contracts which run with the land. When a property is sold, the new owner is obligated to accept the terms of the contract as a condition of the sale.

While the specifics of the case aren't important (except, clearly, to the individuals involved), the ruling of the court was that the purported covenant was unenforceable. That, for those who live in neighborhoods with CCR's, might be important to you. So, what happened?

The court concluded that the specific covenant was not acknowledged by each property owner when it was sold to them. That is, in order to be subject to a covenant, the new property owner must be aware of it and agree to it. Of course, agreeing to it must also be a condition of the sale of the property.

Also, there were irregularities in the documentation itself, some glaringly bizarre: the name of the subdivision was that of a different neighborhood and the name of the neighborhood the litigants lived in was handwritten at the top of the page, also, there was no reference to the location of the properties.

The covenant had several articles to which property owners were purportedly required to adhere. Number 4 limits garages to two cars. Number 6 forbade loud animals. Number 9 required that all alterations be approved by the architectural control committee (ACC). The covenant also forbade commercial enterprises without the permission of the ACC.

The trial court found as a matter of fact that each of these articles had been violated multiple times by multiple residents. Indeed, even the Mitschke family had violated the commercial enterprise requirement. It concluded that because of the frequency of violations, the neighborhood had abandoned the CCR's, even if they had been enforceable.

(The phrase that's used regarding the Mitschke family's violation of the CCR's is interesting. It's best for you all to remember that if you're going to attempt to enforce questionable CCR's, "a person must come into a court of equity with clean hands." Pierce County v. State, 144 Wn. App. 783, 832, 185 P.3d 594 (2008) (citing Income Investors, Inc. v. Shelton, 3 Wn.2d 599, 602, 101 P.2d 973 (1940)). In other words, don't violate the CCR's, then complain that someone else is, too.)

Outside this particular case, it's also important to remember that government agencies will not enforce CCR's. They are private party contracts, and need to be enforced by the people of the neighborhood. Failure to enforce your CCR's will invalidate them, so 1) make sure you're enthusiastic about doing so, and 2) make sure that when your neighborhood no longer wishes to enforce particular sections that you alter the CCR's or your failure to enforce one portion may invalidate your ability to enforce the rest.

Another thing of which you must be aware: covenants cannot be contrary to the public good. Even if your neighborhood wants to have rules which violate the law, and everyone agrees to violate the law, you still are not wise to come to a court and convince it to force someone who moves in to violate the law. So, for those neighborhoods which have limitations on the number of residential units on a lot (i.e. single family homes), if city or county law says that it's a public good that accessory dwelling units (ADU, i.e. granny flats or apartments over garages) be allowed, then the covenant will not be valid on that point, and people will be able to add the ADU.

Covenants can be useful for homeowner's associations, and homeowners associations can provide useful services to a neighborhood (such as maintaining common property like the roads, trails, and pocket parks). As a source of social control, they do leave a great deal to be desired. However, if this is your preferred method of limiting the freedoms of your neighbors, then make sure you're doing it vigorously.