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Conditions, Covenants and Restrictions
hat are CC&Rs and where did they come from?
A CC&R is the governing laws that apply to what is called a subdivision.
These are common laws that apply equally to all. These laws define architecture and structural appearance of the subdivision as well as provide the ability to govern, make change, and collect fees to provide maintenance for common property. It also provides limited judicial authority to sue, fine or attach liens to force compliance. In short these laws define the governing authority of the subdivision. CC&Rs are basically subdivision-zoning laws, which evolved from county and or city zoning requirements.
One must first understand some basic concepts. A law is defined as being made up of conditions and restrictions (C&Rs). The purpose of a law is to provide control and to regulate. Laws, which are created or changed by the majority representatives or population, are common laws. Common laws apply equally to all. A common law is not a private agreement. A private agreement can only be changed by consent of the original signers or by court action.
The CC&R didn't just pop into existence, it evolved over time. CC&Rs, if required, are part of the developer's building plan. Zoning boards require an approved building plan before a home can be constructed. Developers use the building plan to have property zoned or buy property that is already zoned for that purpose. Once the plan is approved by the board construction can commence. Contractors had little need for C&Rs when subdivisions didn't exist. As the requirement for homes grew, developers submitted plans to the zoning board that included multipliable builders. Conditions and Restrictions (C&Rs) were created as part of the plan and approved by the zoning board. The purpose of the C&R was to restrict multiple builders to a common approved plan, design and appearance of the development. As the size and complexity of the developments grew, the developers wanted subdivision pools and tennis courts to attract prospective buyers. Some developments required drainage ponds and roadside maintenance. These subdivisions needed to posses the ability to be self-reliant as well as comply with zoning codes. This created a requirement for a governing body to take care of the community needs. This governing body, called a homeowners association, created by the C&R has the authority to collect money to maintain the parks, swimming pools, tennis courts and common areas once the development reached a specified parameter.
The developer needs to retain the power of government until which time the homeowners associations has reached the agreed parameter to take control. This transfer of power is made possible by the covenant. The covenant is the promise, agreement and means by which a developer, at a certain percentage of home sales or time period, passes the responsibility and control of government to the homeowners' association. The Covenant added to the C&R became what today is known as the CC&R. The CC&R fulfills the zoning board building plan requirement and enables the subdivision to govern, make change, and collect money to maintain facilities. As CC&Rs were part of the original building plan, many zoning boards required a statement from the developer that they researched and no known laws had been violated in the making of the CC&R. This requirement is very seldom practiced today.
There is no commonality between operating structures of zoning boards across the United States. Requirements vary from county to county and from state to state. With most of the early-day planners no longer in office, there is confusion as to what level of involvement the zoning board should have. Part of this is the result of the county and city governments not having the resources to maintain control over the CC&R due to budget and personnel restraints.
When CC&Rs were first created, a Real Estate Attorney researched laws and wrote the CC&R. Today real estate brokers and laypersons write these documents. This new practice has permitted writers of the CC&Rs to be influenced by outside sources. Such things as eliminating outside antennas and poles were influenced by underground utilities that provided kickbacks to the writers and developers. This provided a captive audience for TV and Internet service. These utilities became members of various league of municipalities. They provide money to protect their interest with lobbyists at the state and national level.
Boilerplate CC&Rs were written by the league and were provided as guidelines for developers to follow. These boilerplate documents plus the whims of the writer have corrupted the original intent and purpose of the CC&R. One example of this is an instance where the association has the right to search and seize undesirable home accessories at the homeowner's expense.
CC&R abuse doesn't stop here. The maintenance contracts of common areas have become quite lucrative. By controlling the maintenance contracts and the collection of fees, some developers have found themselves with a profitable venture. To maintain control of these properties, they have replaced the percent of population with a time compliance requirement for transfer of government. Many of these time compliance requirements have an automatic renewal clause. If the transfer of government isn't filed on a certain day, the governing authority automatically reverts back to the developer.
When the CC&R was first conceived, its intended use was to assure that all homes in a common development had similar construction and appearance. When dealing with residential property, improvements are either Primary or Secondary. Primary improvements are main structures such as homes and garages. Secondary improvements are considered be normal accessories. Such edifices as fencing, swimming pools, tennis courts, antenna/towers and tool sheds are considered to be normal accessory structures on residential property. The CC&R was never intended to place a restriction on any improvement other than Primary. Secondary improvements are considered personal rights and had always been left up to the individual homeowner to possess or not.
As long as the C&R or CC&R deals only with primary structures the seller has no requirement to give notice to the buyer as no personal rights are involved. But when restrictions are placed on secondary improvements, then the buyer must be made aware. At the time the deed is signed, a statement is attached which states that a CC&R may exist. This is to make the buyer aware that there are additional zoning laws other than the county or city that govern the property which is being sold. This is not an agreement but a notice. Like any law, you may not agree, but there may be penalties for non-compliance. The only recourse for the homeowner who loses his or her personal rights is to either sell or comply. The court cost associated with any legal action would bankrupt the average homeowner. Those who write CC&Rs that limit personal rights and freedoms do so knowing that there is little recourse for the homeowner. There are still many good developers out there today. One must read the CC&R in order to pick and choose.
-Kerry Steffens, WØON
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