In an interesting case from Arizona, Price v Kravitz, 2012 WL 1380269 (Ariz App April 19, 2012), property owners began construction on a two-story home the subdivision with restrictive covenants which limited the height of any home to one story. The neighbors cautioned the property owners concerning the restrictive covenants, and then sent a legal notice once it became clear that the new structure was going to have to stories. Ultimately, the neighbors file suit.the trial court found that the property owners had intentionally and knowingly violated the deed restriction and were ordered to remove the second story from the home.
The property owners appealed arguing that the restrictions were ambiguous and unenforceable but the Court of Appeals concluded that the plain language of the restriction, the proximity of the development to Camelback Mountain,and the fact that all the other homes in the vicinity were one-story, all indicated that the restriction was designed to protect the neighbors' enjoyment of the property. the order of the lower court requiring that the second story be removed was upheld.
Ordinarily I might not mention this case from a foreign jurisdiction, but given its similarities with the case that I tried six or seven years ago, I thought it was worthy of comparison. In my case, Trundle v Park, 210 S.W. 3d 575 (Tenn. App. 2006), my client, Ed Park, bought a lot in a similarly restricted subdivision and began construction. The neighbors give him notice of the potential violation and then ultimately sued. Ed had another attorney in the trial court, but ultimately lost, with the trial court requiring the demolition of the entire home. After that order was entered, Ed retained my old law firm to represent him on appeal.
I should note that in Ed's case, the restriction did not seem to make a lot of sense. The subdivision was in and around a small mountain/hillside in Chattanooga, Tennessee, but Ed's lot was essentially carved into the side of the mountain. That is, there was no one on either side or behind him whose view would be obstructed by a two-story home as opposed to a one-story home. I take it that the restriction permitting only one-story homes was to preserve the beautiful views from the mountain. But in fact, the second story on Ed's did not really obstruct anyone's view. To some extent, certainly, that's why Ed proceeded in the face of the restrictions.
After the trial court entered its demolition order, we immediately filed a motion to alter or amend the final order in the trial court, asking for permission to modify the newly constructed home so as to make it impossible to live in the second story. The plan was to alter the pitch of the roof, and remove any ductwork or air conditioning and heating which might have been available in that area home. The trial court in essence suspended the previously entered final order, granted the motion to alter or amend, and require that we file within three weeks the plans which I had generally described in the oral argument before the court.
We did file the plans but unfortunately the court did not rule on the validity of the plans for almost a year. When the case finally did come back up, the trial court thought that there was still an existing violation based on those plans, denied the motion to alter or amend, and reiterated its order that the property be demolished entirely.
At that point we file an appeal, and the Tennessee Court of Appeals reversed the decision of the trial court, finding an abuse of discretion in requiring demolition of the entire home, when clearly our submitted plans to modify the existing second-story into something like a glorified attic would bring the property into compliance. Ultimately, the modifications were made and as far as I know, Ed Park still lives in the home.
It is interesting to me that in both of these cases, the owners of the lots well knew of the existing restrictions and chose to go forward with construction in any event. In both cases, it turned out to be rather costly, although in my case, if the trial court's decision ordering demolition had been upheld, the economic impact would've been terrible.
When you review the case law regarding restrictive covenants, there is usually a good deal of language indicating that the restrictions are in derogation of the common law and the right of the property owner to use his property as he wishes, and are as a result looked upon skeptically by the courts. But in my experience, having tried several these cases over the years, usually the restrictions are upheld, and even if they don't seem to make a great deal of sense, the courts will support the restrictive language.