No HOA? Restrictions May Still Apply...

By Mark J. Bainbridge

By now, most Arizonans have become accustomed to HOAs and their role in residential subdivisions. Some people love HOAs, some hate them. Some people purposely seek out properties that are not in an HOA. The idea is that, without an HOA, the homeowner will only have to answer to the City. However, that is not always the case.

It is not enough to ask whether a particular community "has an HOA". That is because, regardless of whether there is a functioning board of directors for the HOA, there may still be covenants, conditions, and restrictions (CC&Rs) that apply. Many of the older subdivisions in the Valley once had a functioning board of directors and, thus, a functioning HOA. For a variety of reason, often apathy, no one serves on the board now and there are no elections, no fine letters, no real enforcement efforts occurring in the community.

Nevertheless, assuming the original CC&Rs were recorded with the county recorder, they may still apply. Often these older CC&Rs contain restrictions on building setbacks, pets & animals, land uses and many others. Because recorded CC&Rs are a contract, any homeowner may enforce the terms of that contract against another homeowner. So if there is no functioning HOA, it may still be possible for any homeowner in the community to enforce the restrictions in court.

I have seen this play out several times. Usually, the homeowner that is accused of violating the restrictions has no idea that they exist or assumed that they were unenforceable since there was no board of directors. Of course, there are defenses that can be raised. Depending on the circumstances, one could argue that the CC&Rs have been abandoned or waived based on a lengthy absence of enforcement or a significant change in the circumstances of the community. These are technical and legal defenses and one should consult a licensed attorney to determine if they apply.

Where you stand usually depends on where you sit. Some homeowners may find comfort in the fact that old restrictions still apply to protect their property values. Others may recoil at the idea and want to see them go away. In any event, it is important to investigate this issue when buying property. Duly recorded CC&Rs will typically show up in the title report when you purchase the property. If you plan to remodel the home, you should check for any such restrictions before deciding on the purchase.

Our firm handles issues involving old restrictions frequently. And they often play a major role in property rights. Mark J. Bainbridge is the founder of The Bainbridge Law Firm, L.L.C., a real estate and business litigation firm in Phoenix. Ph: 602-274-6369.