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Real Estate & Property Law

: a View from the property line

When in Doubt... PUT IT IN WRITING!

By William G. Gammon

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Seasons' Greetings dear readers! A few moons have passed since my last blog entry -- partly due to a chronic malady known as the "human condition" -- it seems that as long as people are people, a lawyer's work is never done. Although life can get hectic at times, the holiday season always provides a measure of respite to reflect on the year that was and, also to catch up on my journal reading (so that I can impart any wisdom gleaned from such articles to my loyal readership). Be that as it may, the following cautionary tale comes to us from our friends to the southeast in Galveston, from a Texas Court of Appeals case, Indian Beach Property Owners' Association v. Linden, No. 01-05-01116-CV (March 22, 2007).

In this case, a homeowner (Linden) endeavored to erect a chain-link fence, that most gaudiest of deed restriction "of-fences," on the perimeter of his non-commercial, residential property. Like all good homeowners should, Linden submitted an ACC application for review and was summarily denied. However, one of the Board members intervened and orally told the Lindens that their denial was due in part to a setback provision that the Lindens thought was inapplicable to their property. The Board member also orally asserted to the Lindens that a letter explaining the inapplicability of the setback would be sufficient as a reapplication to the ACC for reconsideration. Thus, the Lindens followed suit and submitted a letter explaining the setback and didn't hear anything from the ACC during the subsequent 45-day reapplication period. The ACC didn't consider this letter a proper reapplication and therefore didn't issue a reply. Unfortunately, the Indian Beach POA's deed restrictions contained a "silent affirmation" provision (as do most Associations) that deems approval for any ACC application not acted upon by the ACC within the prescribed approval period (provided that the improvement sought conforms with the harmony and general aesthetic of the Subdivision). At trial, the Court found that the letter did constitute a legitimate reapplication based on principles of reliance and notice to the ACC attributable to the Board member's intervention in the application process. Hence, the Lindens got their fence and the Association lost twice in court (once at trial and once on appeal).

The real lesson here is not to be wary of board member intervention in the ACC process (which ultimately led to the Lindens' success) but to put ACC decisions in WRITING. I understand the purpose of these "silent affirmation" clauses is to promote efficiency by the ACC, so that those overworked and underpaid (read: UNPAID) ACC committee members can perform their duties without the hassle of so much paperwork if the improvement is to be approved. However, these provisions are double-edged swords: if the ACC fails to express its decision in writing, good or bad, then that decision is automatically ratified as approved for the homeowner and will most likely be upheld in a court of law, as it did in the Indian Beach case. Better to err on the side of caution and address all correspondence received by the ACC with some type of written response. The ACC can generate a form library of sorts that can deal with certain repeatable issues, like "Linden letters" that may or may not conform to the standards of a formal ACC application. These simple form responses, while marginally more expensive than doing nothing, could provide insulation from a bigger Association expense down the road: litigation over unwanted improvements in the Subdivision. Don't leave it in the hands of the courts, put it in writing next time.

Full post as published by a View from the property line on December 26, 2007 (boomark / email).