November 20, 2023
Many homeowners experience frustration with their community associations when they sense they are going around in circles. For example, they receive notice that something must be applied for or removed because of the architectural guidelines. The homeowner determines that it is not a violation, and board members agree in a conversation. Later, the homeowner receives another notice from the HOA, again asking for the same “violation” to be corrected. Architectural disputes with HOAs go beyond mere “aesthetic” issues such as statuary, plant pots or flag displays. Most architectural applications involve major financial commitments. The architectural control committee has substantial power over the property and lives of the residents. Understanding the limits of those powers can help owners exercise greater control over their own lives.
Recorded covenants and architectural guidelines contain detailed standards and procedures that can be difficult to interpret. Often, the declaration of covenants limits the time the committee or board may take to consider an architectural application, usually 30 or 45 days. Deadlines, if properly contrived, can allow for property-related disputes to be timely resolved. What happens when a HOA fails to timely approve or deny an architectural application? Such rules say that if the HOA does not deny the application within the time allotted, it is deemed approved. Such deadlines prevent associations from desk-drawering (“sitting on”) an application to prevent it from being approved.
Not all HOAs or condominiums have such provisions in their documents. No Virginia statute imposes a 30- or 45-day limit where it is not expressed in the instruments. Without such provisions, the parties look to the doctrines of waiver or estoppel to determine if the association abandoned their right to deny. When things drag out, the homeowner and the committee often disagree as to whether the passage of time barred a denial of a particular application. For example, what if the association responds to an application with a request for additional information, or announces that a hearing will convene only a few days outside of the allotted 45? Is the 30 day or 45-day time limit more flexible than its language would suggest?
The Court of Special Appeals of Maryland (now called the Court of Appeals of Maryland) considered such a case, Raj Yadav vs. Pindell Woods Homeowners Association, Inc., in a December 26, 2017 opinion. Howard County residents, Rita and Raj Yadav planted a row of trees along their property line to enhance privacy screening between their “street front” lot and a “flag lot” behind theirs, owned by the Olaniran family. “Pipestem” driveways connecting flag lots to the right-of-way allow developers to add more lots into a subdivision. Lots using or burdened by driveway easements tend to have more legal disputes than ordinary lots. https://cowherdplc.com/problems-with-pipestems/ The Yadavs wanted to screen a line of sight between their house and the Olaniran’s driveway. The Olanirans complained about the trees. On April 28, 2014, the Yadavs applied for approval of the trees. The HOA asked the Yadavs to resubmit their application, which they did in May 2014. The HOA denied their applications. The Yadavs removed two trees and submitted a third application for the thirteen remaining trees. After the Yadavs refused to remove all but seven trees, the HOA denied the application. The HOA said that when the trees matured, they would block motorists’ sight lines. In court, the Yadavs argued that the covenants did not allow the HOA to prohibit them from planting trees wheresoever on their property. They argued that even if the HOA may regulate trees, it erroneously determined that the trees constituted a hazard. A sentence in the covenants read, “No trees or shrubs shall be located on any lot which block the view of operators of motor vehicles so as to create a traffic hazard.” Not all recorded covenants give the HOA design-control power over plants on owners’ lots. Maryland courts defer to internal decisions of organizations by applying the business judgment rule (BJR). In Maryland, exceptions to the BJR concern (1) whether the board’s decision was one they were authorized to make, i.e., “ultra vires” action, or were the result of (2) fraud or (3) bad faith. In evaluating a HOA dispute, one must first determine if the board has the authority to make a particular decision at all. Ultra vires is an important doctrine for homeowners. The Court of Appeals ruled that the BJR applied to Pindell Woods HOA’s tree decisions. In Virginia, there is another approach, that of reasonableness, which sometimes presents an intermediate standard between the strict ultra vires and deferential BJR. In my opinion, the BJR is not appropriate for design control powers of parcels of land not owned by the Association, unless it is a condominium, or the recorded instruments expressly adopt the BJR. Control over another person’s land is not properly within the “internal” functions of a corporation; it looks outward to the affairs of its members. In the Yadav case, the HOA did not determine that the trees currently presented a traffic hazard. They concluded that if the trees grew, eventually they would obstruct a line of sight. The court opinion does not discuss if this could be resolved by a condition to keep the trees trimmed. Pindell Woods’ covenants said that any application not decided by the Architectural Committee within 30 days is deemed approved:
Unless the architectural committee, by written notice to the applicant, disapproves any plans submitted or approves them only upon the satisfaction of any specified condition, as aforesaid, within thirty (30) days after such … plans are submitted the architectural committee shall conclusively be deemed for all purposes of this Declaration to have approved such plans unconditionally for each lot for which they were so submitted.
The Yadavs called for this provision to be applied by its plain meaning. The HOA wanted it to be viewed flexibly, to accommodate negotiations between the homeowner and the committee. The declaration was silent as to whether the 30-day “clock” could be paused or restarted. The Court of Appeals concluded that because the committee has the power to condition its approval, that shows a general purpose to, “create a cooperative, interactive process by which the Architectural Committee and the application negotiate a mutually acceptable resolution.” The Court of Appeals ruled that the HOA had the power to pause and restart the 30-day clock when it is trying to resolve matters cooperatively. To require the HOA to deny all applications that it is not yet prepared to accept to prevent itself from forfeiting its design-control powers would have the adverse effect of homeowners receiving mysterious denials where re-application on different terms is suggested or implicit. If the homeowner submits a clarification within 30 days, does that re-start the clock or have no significance for the question of waiver?
The Yadavs’ and Pendell Woods HOA’s negotiations continued from April to December 2014 regarding trees that had already been planted. The Yadavs did not rely upon silence to add trees. The Court of Appeals ruled that the HOA’s request for supplemental information “operated to pause the 30-day clock.” The HOA’s later denial of the application was not erroneous.
The court’s Yadav ruling reflects a desire for the HOA and homeowner to work out the details of architectural applications in earnest. Yet, the approach adopted gives the HOA leverage in such negotiations. A homeowner may find herself trapped in a salad of notices and applications. The Yadav decision assumes that HOAs will “pause” the 30- or 45-day clocks with requests or demands for additional information in a thoughtful way that does not render the deadline meaningless. The court also affirmed the award of attorney’s fees in favor of the HOA and against the Yadavs.
Contrast the Yadav outcome with the Circuit Court of Fairfax County’s approach in a 2007 unpublished decision by Judge Jonathan Thatcher. South Run Regency HOA sued Catherine K. Crosby, seeking removal of a fence she erected on her property. The declaration stated that, “all applications not acted upon within forty-five (45) days shall be deemed approved.” The architectural standards and guidelines provided that, “any time the ARB requires additional information for proper evaluation of an application, the application shall be disapproved and returned requesting more specific information.” After erecting the fence, Ms. Crosby applied on August 25, 2005 for the ARB to retroactively approve it. On September 12, 2005, the ARB sent Ms. Crosby a letter stating that the ARB needed additional information to consider the application. This letter did not deny the application, nor did it return it to her. Ms. Crosby did not respond to this letter. On October 11, 2005, the ARB voted to disapprove the application. This fell outside the 45-day time limit. Judge Thatcher found that the instruments unambiguously required the ARB to deny or return the application if additional information was required. The court entered an order in Ms. Crosby’s favor, deeming the application approved by the passage of the 45 days.
These two courts took different approaches on similar (but not identical) situations. Virginia and Maryland courts tend to apply different standards and points of emphasis in HOA architectural control matters. When a homeowner applies to her HOA for architectural approval, she ought to give careful attention to the wording of the declaration of covenants, bylaws, and the architectural guidelines.
In Virginia, there are provisions in the Property Owners Association Act and the Condominium Act that require boards and committees to conduct business in properly noticed, open meetings. Boards and committees cannot conduct business in unnoticed meetings or “work sessions.” For the board or committee to make a binding business decision on an owner’s architectural application, the vote must comport with the open meeting statutes. This means that some HOA denials of architectural decisions may be void on account of the informality by which they were made.
If a homeowner believes that the HOA is barred from denying an application because of the passage of time, it is best to consult with qualified legal counsel before embarking on a project pursuant to that applied for design, particularly where the cost to later change things could involve financial waste. Many architectural control matters involve a major addition to the house, construction of retaining walls, a swimming pool, or other expensive commitments. There are things that homeowners can do to prevent their association from leading them around in circles or allowing them to remain trapped in “limbo” where a NOV ought to be removed or an application ought to be treated as approved. The homeowner’s right to have the 30- or 45-day “clock” can easily be waived in the course of negotiations. It’s not always best to proceed with a project in the face of uncertainly, particularly if the application is incomplete or inadequately describes what is desired.
For Further Reading:
South Run Regency v. Crosby, No. CL-2006-1582, 2007 Va. Cir. Lexis 156 (Fairfax Co. 2007).