Homeowners Associations (HOAs)
Homeowners Associations (HOAs) aim to ensure aesthetic and architectural harmony among the properties that are considered part of their “building scheme”. A building scheme has been described as a “community of interests” by the courts, which means that there is reciprocity between homeowners within the building scheme. For example, many building schemes require that homeowners receive approval from the HOA before they can make changes to the exteriors of their homes. This restriction aims to maintain design features that were integral to the creation of the building scheme.
Recently, Walker Law asked the Court to order an interim injunction to stop a homeowner from making alterations to his house that violated the terms of the building scheme, until an application regarding the alterations could be heard in court. Walker Law’s experienced litigation lawyers were successful, and the Court ordered the injunction.
What is a valid building scheme?
The courts have developed a test to answer the question of whether a building scheme is valid. A valid building scheme requires that:
- the properties at issue derive their title from a common vendor;
- the common vendor, before selling the lands, placed restrictions on all lots for sale (or a defined portion of the lands for sale), which are consistent with a general scheme of development;
- the restrictions were intended to be and were for the benefit of all the lots; and
- the parties to a dispute, or those who owned the land before them, purchased the land with full knowledge that the restrictions were for the benefit of the other lots included in the building scheme.
Building schemes are built on reciprocity; each property benefits the other and benefits from the other. Some examples of these benefits relate to property value, open-concept landscape architecture, ensuring certain landmarks are in view of all the properties, and other similar benefits. Crucially, under building schemes, all property owners have the same or similar burdens and enjoy the same or similar benefits relating to the limitations on their use of the property.
What can an HOA do in response to violations of the building scheme?
If a homeowner who owns property subject to the building scheme violates the building scheme by, for example, failing to get the approval of the HOA, and then continues with actions that violate the building scheme, then the HOA can bring a court Application to force the homeowner to reverse the changes made to the property, and, in the meantime, an interim injunction to stop the property owner from continuing.
For the Application, the HOA must convince the court that the building scheme, also referred to as “restrictive covenants” registered on title, is legally binding under the law of contracts and that it is not ambiguous or vague. It is helpful in these instances if the HOA has made similar rulings against alterations or has had its building scheme upheld in court before.
An injunction will be granted where:
- there is a serious issue to be tried;
- if the court does not give the requested relief, the applicant will suffer irreparable harm; and
- the balance of convenience favours the applicant.
Whether there is a serious issue to be tried is a low bar threshold, which requires the court to use common sense and a limited review of the case on the merits. Typically, if the case is not frivolous or vexatious, the court will move on to the second and third steps.
Irreparable harm refers to the nature of the harm, not to its magnitude. That is, irreparable harm is harm which either can’t be put in monetary terms or can’t be fixed. This can include harm to reputation and impact on a community.
The balance of convenience should favour the applicant in an HOA case like the one described above, because the homeowner is breaching an agreement that the homeowner agreed to when they purchased the property.
Conclusion
If an HOA finds that a homeowner who owns property that is subject to the building scheme that the HOA was created to enforce, and the homeowner refuses to cooperate and follow the terms of the building scheme, then it is important to act quickly to bring an Application to the court to enforce the terms of the building scheme, and to bring an injunction to stop the homeowner from continuing, if they are refusing to stop.
If you have any questions about Homeowners Associations, building schemes, restrictive covenants, interim injunctions, Applications, or any other areas of law, please do not hesitate to reach out to one of Walker Law’s experienced litigation lawyers.
Tags: Injunctions, Contract Disputes, Residential Real Estate Disputes