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Condominiums & Homeowners Associations

Bank with actual knowledge of intent to create homeowners association bound by covenants even though the mortgage was recorded before the homeowners assocation declaration

An appellate court in New Jersey held that a bank that received a mortgage on a piece of property was bound by a later-recorded homeowners association covenants because it had actual knowledge that the developer planned to subject the property to the declaration. Fulton Bank of N.J. v. Casa Eleganza, 473 N.J. Super. 387, 281 A.3d 252 (N.J. App. Div. 2022). This was the case even though New Jersey...

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Scope of easement to operate a neighboring golf course determines whether intrusion of dozens of golf balls a year to victims’ property constitutes a trespass

A couple that bought a home next to a golf course sued the golf course for trespass because of all the golf balls that landed on their property. Although the golf course attempted to take remedial measures to stop golf balls from landing on the couple’s property, roughly 90 balls would land on the property each year, a dozen of which struck the house. The couple won in the trial court which awarded them $100,000 in compensatory damages for property damage and $3.4...

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Short-term rentals do not violate “residential use only” covenant

The Mississippi Supreme Court has held that short term rental of property is not a commercial use that would violate a covenant limiting land to residential purposes. Lake Serene Prop. Owners Ass’n v. Esplin, 334 So.3d 1139 (Miss. 2022). There has been some disagreement among state courts on this question because the use of property as an Airbnb or other short term...

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Homeowners Association architecture regulations must be reasonable and authorized by governing documents

The Nevada Supreme Court adopted §6.7 and §6.9 of the Restatement (Third) of Property (Servitudes) and held that restrictions on construction (including architectural review committees) are only valid if owners are on notice of them and they exercise their powers “reasonably.” Moretto Trustee of the Jerome F. Moretto 2006 Trust, v. ELK Point Country Club...

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Nearby changes do not satisfy the changed conditions doctrine so restrictive covenants remain in effect

The Alabama Supreme Court has reaffirmed the traditional rule that changes nearby but outside a restricted neighborhood are not sufficient to come within the changed conditions doctrine that would make existing restrictive covenants unenforceable. Capitol Farmers Market, Inc. v. Ingram, 2021 WL 5752352 (Ala. 2021). Covenants remain enforceable unless changes inside the neighbhorhood subject to the... Read more about Nearby changes do not satisfy the changed conditions doctrine so restrictive covenants remain in effect

Courts split on whether short term rentals are a nonresidential use

With continued disagreement among courts in the U.S., the Kentucky Supreme Court has weighed in on the side of finding short term rentals of property to be more like hotels than home ownership or residential leasing and so does not qualify as a "residential" use prohibited by a covenant that prohibits nonresidential uses of the land.. Hensley v. Gadd, 560 S.W.3d...

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Short-term rentals consistent with covenant limiting land to “residence purposes” and prohibiting motels and hotels

The Arkansas Supreme Court has held that short-term rentals (like Airbnb) are residential uses and are neither “commercial” uses nor “hotels.” Vera Lee Angel Revocable Trust v. Jim O'Bryant Joint Revocable Trust, 537 S.W.3d 254 (Ark. 2018)

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Condominium's policy of segregating pool hours by gender violates fair housing laws

The Third Circuit held that a condo association that adopted sex-segregated pool hours to accommodate its Orthodox Jewish residents in an "over-55" age-restricted condominum violated the Fair Housing Act both by denying access to the common area based on sex and by giving women only 3.5 hours to swim on weeknights compared to 16.5...

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Short term rental use held not to violate covenant prohibiting "commercial activity"

The courts continue to split on this question with the majority holding use of property for short-term rental (such as vacation rental or Airbnb use) is a residential rather than a commercial use. The Wisconsin Supreme Court has joined the courts that have found short-term home rentals to be consistent with a covenant prohibiting "commercial activity."...

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Airbnb use held to be consistent with covenant restricting property to residential use

Courts have divided on the question of whether short-term rentals violate restrictive covenants limiting land to residential purposes. The Texas Supreme Court just joined the majority that hold that use of property for Airbnb and similar short term rentals is residential use consistent with the covenant. Tarr v. Timberwood Park Owners Ass'n, 2018 Tex. LEXIS 442 (Tex 2018). But see ... Read more about Airbnb use held to be consistent with covenant restricting property to residential use