Hold that paintbrush! A glimpse into design-control in planned communities

You are choosing a new paint color for the outside of your house, and you think, “Since all the other houses are beige, I’ll do mine purple.” Not so fast – you better check your community’s governing documents before brushing on that first coat of paint.

If you live in a planned community, you’ve probably seen a Declaration of Covenants, Conditions, and Restrictions (or similarly-titled document) (CC&Rs), which established the community and a homeowners’ association to govern it. Among other things, CC&Rs often allow for the creation of a design-review or architectural committee to act on behalf of the association, giving the committee members broad discretion to review and approve homeowners’ plans to modify their properties.

If a homeowner doesn’t seek required advance approval, the association or a neighbor might file a lawsuit asking the court to prevent the homeowner from making the modifications, or worse, if the modifications were already made, to return the property to its original condition. To avoid this disruptive and costly result, before making changes, homeowners should check their CC&Rs and any other rules relating to architecture or design to see if approval is required.

So, if a homeowner seeks approval from the architectural committee, can the committee deny approval at its whim if the CC&Rs give the committee broad discretion over design-control? No.

Homeowners associations have a duty to treat homeowners fairly, and must act reasonably when exercising discretionary powers, such as design-control. If a homeowner sues to challenge an association’s decision, the homeowner must prove that the association acted unfairly or unreasonably, and if the association’s action was discretionary, the homeowner must also prove that the association’s decision has caused, or threatens to cause, injury to the homeowner or the interests of the common-interest community. See, e.g. Tierra Ranchos Homeowners Assoc. v. Kitchukov, 216 Ariz. 195 (App. 2007) (adopting Restatement (Third) of Property: Servitudes § 6.13 (2000)).

To fulfill its duty, an architectural committee must use a fair procedure and meaningfully consider a homeowner’s request. While every property owner’s circumstances will be different, it is helpful for the committee to issue general design guidelines and to enforce them similarly against different homeowners.  When a homeowner requests approval of modifications, the committee should first determine whether the modifications are covered by the CC&Rs, the design rules, or any other governing documents.  If the modifications are not addressed in the governing documents, or if the homeowner requests a variance from the documents, the committee should consider all the facts, such as the property’s location or unique circumstances, whether other homeowners have been permitted to make similar modifications, and the likely impact of the modifications on other homeowners and the community as a whole.