New Case Law Analysis: College Book Center v. Carefree Foothills HOA

In a new case, College Book Centers v. Carefree Foothills Homeowners Association, 225 Ariz. 533, P.3d 897 (App. 2010), the Arizona Court of Appeals tackled the issue of whether an association waives its right to enforce a covenant restriction by allowing similar violations.  Waiver is typically a defense raised in a homeowner association’s action to enforce its restrictions.  Essentially, it is the “my neighbor has one so I get to have one” defense.

In College Book Centers, a property owner brought an action against a homeowners association seeking an order from the Court declaring that the association waived its restriction prohibiting non-residential structures on a lot.  The owner argued that by allowing two similar violations, one in 1984 and the other in 1987, the association had waived its right to enforce this provision. The Court of Appeals disagreed.

The Court of Appeals held that in order for an owner to establish waiver, the owner must prove that there were “frequent violations” of that particular restriction.  The Court defined “frequent” as “happening or appearing often or at close intervals”.  The Court concluded that two violations over a thirty year period did not constitute “frequent violations”.  Thus, the association had not waived its right to enforce its restriction prohibiting non-residential structures on a lot.  (Note: the Court of Appeals provided examples of other cases around the nation where “frequent violations” had not occurred, including: four violations out of sixty-two lots did not constitute waiver; fourteen similar violations out of 800 lots did not waive the association’s right to enforce its restrictions regarding mobile homes; five violations in a fifty-six lot subdivision were insufficient to find waiver; two similar violations were not sufficient to constitute waiver; and a court in Wyoming declined to find a waiver of the right to enforce restrictions in a case of twenty out of 157 lots that had violated a front-yard fence restriction.)

In addition, the Court of Appeals upheld the enforceability of a non-waiver provision in a homeowner association’s restrictions.  The Court held, “When declarations of covenants, conditions, and restrictions contain a non-waiver provision, a restriction remains enforceable, despite prior violations, so long as the violations do not constitute a “complete abandonment” of the restrictions.”   A “complete abandonment” of deed restrictions occurs when an association has thoroughly disregarded the restrictions, which results in change that destroys the effectiveness of the restrictions and defeats the purposes for which they were imposed.

The Court of Appeals did clarify that the existence of a non-waiver clause does not grant an association the right to periodically ignore its restrictions.  The Court of Appeals, citing Johnson v. Pointe Cmty. Ass’n, 205 Ariz. 485, 73 P.3d 616 (App. 2003), reaffirmed that if an association fails to take appropriate action to reasonably enforce its restrictive covenants, it may subject the association to liability.

So what does College Book Centers mean for your association?  It means that if your previous board failed to enforce a restriction, it is never too late for your association to begin enforcing that restriction. Infrequent past violations of a particular restriction do not limit an association’s ability to enforce that restriction, and, the existence of a “non-waiver clause” in an association’s restrictions further preserves an association’s right to actively enforce its restrictions regardless of prior violations.

If you have any questions about waiver or enforcement of covenants and restrictions, contact Josh Bolen or another attorney in our office.