Unenforceable Rules and Regulations
In late 2011, the South Carolina Court of Appeals handed down a decision denying a homeowners’ association relief based on unenforceable rules and regulations. In Rawlinson Road Homeowners Association, Inc. v. Jackson, 395 S.C. 25, 716 S.E.2d 337 (S.C. App. 2011), the Court of Appeals determined that keeping a boat on a lot in the subdivision - an activity prohibited by the unrecorded rules of the association - was not an activity prohibited by the recorded restrictive covenants.
In this case, the association’s restrictive covenants required lot owners to prevent their lots from becoming “unkempt, unsightly or unclean.” The restrictive covenants also gave the association the power to enact rules and regulations regarding the amenities and the common areas of the subdivision. However, the restrictive covenants did not specifically prohibit the storing of boats on lots, nor did they give the association the power to enact rules and regulations affecting the lots themselves.
Subsequent to the recording of the restrictive covenants, the association adopted a set of rules and regulations prohibiting the parking of boats on lots. The defendant Jackson, who was a boat owner, purchased his lot prior to the imposition of the “no boat” rule. After the rule was passed, the association began imposing fines on Jackson for each week his boat remained on the lot. The fines accumulated over time, and then the association filed a notice of lien on the lot and commenced an action to foreclose the lien and to enforce the rule prohibiting boats.
Jackson counterclaimed against the association, claiming that the rule against boats was unenforceable and that the association did not have the power or authority to impose fines or a lien against his lot. The association then filed a motion for an injunction seeking removal of the boat, and Jackson filed a motion for summary judgment. The trial court granted summary judgment in favor of Jackson on the grounds that (1) the restrictive covenants did not prohibit boats on lots, (2) the restrictive covenants did not give the association the power to impose rules and regulations on lots, and (3) that the restrictive covenants did not give the association the power to impose fines against owners based on their use of their lots.
The Court of Appeals upheld the trial court’s grant of summary judgment based on the fact that there were no issues of fact that needed to be decided by a jury. The Court focused on the fact that though the association argued at the motion hearing that the boat made Jackson’s lot “unkempt, unsightly and unclean,” that issue was not properly before the court, because the association did not allege a breach of the restrictive covenants in its complaint, nor did the association file an affidavit in support of their position in response to Jackson’s motion for summary judgment. Instead, the association’s complaint only alleged that Jackson was in violation of the unrecorded rules. The Court held that since the restrictive covenants did not authorize the imposition of additional rules on lots, the unrecorded rules were unenforceable as a matter of law.
This case highlights the importance of clear, precise drafting of restrictive covenants and amendments, and the importance of ensuring that unrecorded rules comply with the authority granted by the restrictive covenants. Community associations should always be very careful and seek legal advice when attempting to create new rules and regulations and also when deciding whether to impose fines or prohibit certain activities.
This blog post is not, and should not be considered, legal advice, and is for general informational purposes only. Always consult an attorney for legal advice regarding specific situations.