Anyone who has actively served on a board of directors for their homeowners association (HOA) can probably tell you just how important it is to be familiar with your HOA’s governing documents, and just how important the precise wording of those documents can be. Provisions regarding the governmental procedure of the HOA are usually set forth in the “bylaws,” but it is typically the declaration of restrictive covenants that sets forth the substantive standards and restrictions of the community which the HOA will serve to uphold. In other words, the covenants generally set forth what residents can and cannot do with their property. When the exact meaning of a covenant in the HOA’s document is unclear, it not only gives rise to practical difficulties in enforcing that covenant, but also presents particular legal concerns in light of South Carolina case law. This article is intended to bring awareness to some of these concerns which HOAs may want to keep in mind when handling matters involving ambiguous restrictive covenants.
For the purposes of this article as well as South Carolina case law, a restrictive covenant is “ambiguous” if its terms are “reasonably susceptible of more than one interpretation.”[1] Now, it is unsurprisingly common for a homeowner to propose a wildly farfetched “alternative” interpretation to a restrictive covenant when told by their HOA they are violating the restriction, but if the plain and ordinary meaning of the covenant from its time of execution is unmistakable, then the HOA is likely on solid ground to enforce the covenant.[2] However, it is also often the case that restrictive covenants genuinely are susceptible to more than one interpretation, and HOAs should proceed carefully when that is the case.
In court, ambiguity is not the HOA’s friend.
In South Carolina, while not intended to defeat the plain and obvious purpose of a restrictive covenant, courts are supposed to interpret restrictive covenants “with all doubts resolved in favor of the free use of the property.”[3] In other words, if the HOA is seeking to enforce a restrictive covenant prohibiting a homeowner from doing something, and that covenant is ambiguous, the court is likely going to rule for the homeowner. This concept is prevalent in South Carolina property law and is often dispositive in the outcome of cases regarding restrictive covenants. This is something for an HOA to carefully consider before initiating or prompting litigation when there is a plausible differing interpretation to the covenant at issue. In such cases, the HOA may be best served by seeking an alternative solution to the problem or instead focusing efforts on eliminating such ambiguity in the future.
Even ignoring the legal ramifications of ambiguity in governing documents, communities benefit from the HOA and all residents sharing a clear understanding of what is required and what is prohibited.
The benefits of clear drafting of covenants and even HOA regulations, architectural guidelines, etc. are obvious, and avoiding ambiguity in these documents can spare HOAs a lot of time and conflict. That said, most currently existing HOAs are bound by numerous documents that have already been drafted and recorded. When ambiguity is identified in preexisting documents, your HOA might consider amending those provisions to more clearly articulate the intent of the document. While these documents often require homeowner votes in order to amend, homeowners may be inclined to do so if it means everyone having a clear understanding of what is expected in their community. As to those documents containing ambiguous covenants that cannot be amended, then it would be prudent for the HOA to keep in mind the South Carolina case law regarding ambiguity in determining its approach when there are arguable violations. In any event, it is better to be aware of the risks associated with ambiguous restrictive covenants sooner than later!
This article is not intended to be an exhaustive discussion of the legal implications of ambiguity in HOA restrictive covenants, nor any guarantee regarding the outcome of litigation regarding the same. Our attorneys at McCabe, Trotter & Beverly, P.C. are experienced and well-equipped to answer questions you may have regarding this topic. Please contact us at 803-724-5000 for further information.
This article written by Ashley Green.
McCabe, Trotter & Beverly, P.C. blogs and other content are for educational and informational purposes only. This is not legal advice and does not create an attorney/client relationship between McCabe, Trotter & Beverly, P.C. and readers. Readers should consult an attorney to understand how this information relates to their personal situation and circumstances. You should not use McCabe, Trotter & Beverly, P.C. blogs or content as a substitute for legal advice from a licensed attorney.
[1] Hardy v. Aiken, 369 S.C. 160, 165, 631 S.E.2d 539, 541 (2006) (citing South Carolina Dep’t of Natural Resources v. Town of McClellanville, 345 S.C. 617, 550 S.E.2d 299 (2001)).
[2] See Seabrook Island Property Owners Ass’n v. Marshland Trust, Inc., 358 S.C. 655, 661, 596 S.E.2d 380, 383 (Ct. App. 2004) (“The language of a restrictive covenant is to be construed according to the plain and ordinary meaning attributed to it at the time of execution.”)
[3] Id. at 662.