30
Jun

How to Enforce Real Estate Covenants

One of the major factors that can substantially affect the use and value of real estate is the existence of covenants. Remarkably, there are many homeowners that either failed to read covenants at the time the real estate was purchased, or read them and have since forgotten about the content. There are many reasons why this commonly occurs but first, it is important to understand what exactly a covenant is.

A property covenant is when a real estate purchaser agrees to either do something (affirmative covenants) or the buyer agrees not to do something (restrictive covenant). In almost all cases, the agreement is binding to anyone the original buyer grants, leases, bequests, etc. the property to. For instance, the property may have a restrictive covenant that binds the owner, and all of the subsequent owners, from operating a business on the property. The property may also have an affirmative covenant on it, requiring the owner, and all subsequent owners, to pay association fees that go to the maintenance of common areas, even if the owner of the land does use that area. Regardless of whether the covenant is affirmative or restrictive, disputes regarding the enforcement of such covenants have been a hot-button issue for more than half a century and is often litigated through the court systems.

How the covenant is enforced depends on the type of community the property is located in. If the property is located in a condominium complex or planned community (i.e. sub-division) it is likely that a homeowner’s association exists. In that case, the homeowner’s association is vested with the authority to enforce covenants, and in extreme cases, bring a lawsuit against a homeowner on the behalf of the other homeowners. If there is not a homeowner’s association, and a homeowner wishes to prevent his neighbor from breaching a covenant, he must enforce it himself or better yet, come together with fellow neighbors who also wish to enforce the covenant.

One defense the homeowner looking to enforce a covenant needs to take into account is laches. Laches is an equitable defense that prospective/current property owners can raise that may prevent the disgruntled homeowners from enforcing the covenant. Laches applies when the party asserting the defense demonstrates that, because of delay or lapse of time, they are injured or have changed position in reliance on the other party’s inaction(s). Jerger v. Rubin, 106 Ariz. 114, 117, 471 P.2d 726, 729 (1970). It is extremely important that the ones wanting to enforce a covenant not wait around and continuously allow the homeowner to be in breach of the covenant without trying to enforce it. There a number of factors to take into account but Arizona courts tend to be less sympathetic to homeowners who are trying to enforce a covenant, and have sat on their rights for years.

If you have an issue regarding CC&R’s and want advice from an attorney experienced in real estate law, do not hesitate to contact me at my office.