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Home Built in Violation of Restrictive Covenants Must Be Partially Demolished

Building a new home can be an exciting proposition, but it is important to review any declarations, deed restrictions, restrictive covenants, HOA Bylaws and HOA rules before having your plans drafted.  It is common for platted subdivisions with homeowners associations to have some form of building restrictions.  Common building restrictions in platted subdivisions often relate to items such as obtaining approvals from the architectural control committees, minimum square footage requirements, meeting setback requirements, restrictions on building materials, limitations on sightline requirements, and landscaping specifications.  Accordingly, during the planning stage, it is important that the architect, builder, and homeowners review all the applicable deed restrictions to ensure that the design plans are appropriate.  In a recent case, Sgriccia v Welsh, unpublished opinion of the Court of Appeals, issued March 24, 2022 (Docket No. 355074), the Michigan Court of Appeals upheld an injunction that required part of a home to be demolished as it was constructed in violation of the restrictive covenants related to sightline requirements.

 

Facts Relating to the Violation of the Restrictive Covenants

Plaintiffs, David, Paul, and Philip Sgriccia sued the Defendants, James and Jean Walsh, for constructing a portion of their home in in violation of a restrictive covenant that prohibits building a home beyond the “timber line” in the Woodcreek subdivision that is located along the Grand Traverse Bay.  Plaintiffs’ family has owned lot 21 in the subdivision since the 1960s. Defendants own lot 22, which is directly north of plaintiffs’ lot. Defendants purchased their lot in 1994, but they did not begin to build a home on the property until the summer of 2019. Grand Bay, Inc. served as the developer of the Woodcreek subdivision. In 1966, the developer recorded a declaration that restricted lots in the Woodcreek subdivision and contained the following covenants:

No buildings shall be constructed closer to the shore than the timber line along Grand Traverse Bay and not closer to Joe Marks Trail than fifty feet. Further, no building shall be constructed closer to the side lot than fifteen feet.

No buildings shall be erected until the plans and specifications with the proposed site thereof identified have been submitted to and approved by Grand Bay, Inc., or their successors.

In 2018, the defendants finalized plans to build a home on lot 22. After a survey crew staked the footprint for the new house, plaintiffs sent the defendants a letter expressing their concerns in regard to the placement of the house. Specifically, plaintiffs believed that the planned home was too close to the Grand Traverse Bay, in violation of the restrictive covenants. Plaintiffs sent another letter expressing concern in regard to the home’s placement in May 2019, after defendants obtained a building permit.

After construction started in July 2019, plaintiffs filed a complaint seeking a preliminary injunction to prohibit defendants from continuing to build their home in its current location. Plaintiffs alleged that defendants were building their new house 70 feet in front of the timber line along Grand Traverse Bay, which was prohibited by the restrictive covenants. Moreover, plaintiffs claimed that the purpose of the restrictive covenants was to keep the lots desirable and uniform, and that by defendants placing their house so far forward, it was not uniform with nearby houses and blocked the lake views and site lines of the existing homes, thereby making them less desirable. The trial court initially granted the preliminary injunction, stopping construction of the house on lot 22. However, the court agreed to dissolve the injunction, after warning defendants that they continued to build at their own risk.

The trial court held a bench trial, in which the parties presented the testimony of several witnesses, including expert arborists and foresters, and several photo exhibits. The trial court concluded that the term “timber line” was not defined in the restrictive covenants. Therefore, the court found that the term was ambiguous and that it was necessary to determine the intent of the drafter in regard to the location of the line. The trial court found that the deed restrictions, taken as a whole, were clearly in place to create, in part, a uniform western boundary and to preserve lot views, and that the location of the defendants’ home violated both of these clear objectives. The trial court ruled that defendants were required to remove the portion of the home that was outside the timber line. If it was rebuilt, in the absence of a successor developer to Grand Bay, defendants were required to obtain the approval of the adjacent landowners.

 

The Court of Appeals Interpretation of the Restrictive Covenants

In interpreting the restrictive covenants in this case, the Michigan Court of Appeals started with defining the disputed meaning of the term “timber line”, which was not expressly defined in the deed restrictions. After discussing the expert testimony provided by arborists, the Court of Appeals stated that the proper manner of interpreting the restrictive covenants was as follows:

…. the developer used the two-word phrase “timber line,” which may have been intended to be interpreted differently than the recognized definitions for the single word “timberline.” See Thiel, 504 Mich at 496; Bloomfield Estates Improvement Ass’n, 479 Mich at 215. The Merriam-Webster dictionary defines “timber” as “growing trees or their wood” or “wood suitable for building or carpentry.” Merriam-Webster’s Collegiate Dictionary (11th ed.). As a result, “timber line” could mean a line of timber, such as a line of growing trees or a line of trees with wood suitable for building or carpentry.

In any event, the technical definition of “timber line,” “timberline,” or “tree line” is not automatically dispositive of the claims raised in this case and cannot be read in a vacuum. In other words, although the parties disagree on the definition of “timber line,” resolution of the case requires determining what the developer meant by “timber line” and locating where the timber line is on the property.

The Court of Appeals then considered other provisions of the restrictive covenants in defining the term “timber line” and noted as follows with respect to Paragraph 4 of the restrictive covenants:

Aside from the timber line boundary, the rest of ¶ 4 establishes eastern, northern, and southern boundaries for a home built on a lot. Indeed, a home cannot be constructed within 50 feet of Joe Marks Trail or 15 feet of the property line. There is also no dispute that a home cannot be built directly on the shore, or that there is some kind of western boundary. As a result, the language of ¶ 4 is evidence of the developer’s intent to maintain the uniformity of the lots by mandating where a house could be built.

After reviewing various other provisions of the declaration, and noting that the declaration must be read as a whole, the Court of Appeals held as follows:

Considering the entire declaration and various covenants, it is apparent that the location of buildings and conformity were important to the developer. This is evidenced by the requirement that the site of building plans be submitted to and approved by Grand Bay. As a result, it was not erroneous for the trial court to determine that there was a “line” in which houses were meant to be built behind, or at the very least, an area in each lot in which houses could be built.

 

Injunctive Relief to Demolish the Portion of the Home That Violated the Restrictive Covenants

While the remedy of tearing down a portion of the house that was built in violation of the restrictive covenants may seem harsh, the Court of Appeals upheld the trial court’s injunction.  The Court of Appeals held as follows:

“[A] negative easement is a valuable property right.” Webb v Smith (After Remand), 224 Mich App 203, 210; 568 NW2d 378 (1997). Further, “[t]he judiciary’s policy is to protect property owners who have complied with the deed restrictions.” Id. at 210-211. Michigan courts generally enforce valid restrictions by injunction. Moreover, courts typically do not consider the parties’ respective damages …. Owners may enforce negative easements regardless of the extent of the owners’ damages. When enforcing a negative easement, it is wholly immaterial to what extent any other lot owner may be injured by the forbidden use. The economic damages suffered by the landowner seeking to avoid the restriction do not, by themselves, justify a lifting of the restrictions. Because courts regularly enforce injunctions based on valid restrictions and because the parties’ damages are immaterial, the circuit court [does] not err in failing to apply a balancing test. [Id. at 211 (quotation marks and citations omitted).]

The Court of Appeals also noted that the defendants had multiple warnings from the plaintiffs before a lawsuit was filed, as well as the Court, and that they continued construction at their own risk while litigation was pending, which further supported issuing an injunction to demolish the portion of the home that was constructed in violation of the restrictive covenants.

 

Conclusion

Sgriccia v Welsh, unpublished opinion of the Court of Appeals, issued March 24, 2022 (Docket No. 355074) stands for the proposition that injunctive relief may be ordered to remove construction that violates condominium documents, declarations, deed restrictions, or other forms of restrictive covenants.  Owners that fail to review and comply with restrictive covenants are taking significant risks, as this case demonstrates that courts may order the removal of construction, which can be expensive and time consuming.  Accordingly, it is wise for property owners that are subject to restrictive covenants to consult with counsel to determine any applicable restrictions before commencing construction.

Similarly, homeowners associations should be aware that once construction is commenced in violation of restrictive covenants, the sooner the association takes action, the better odds of success they will have in obtaining an injunction.  While some HOA boards may not think that a court will order the removal of an offending structure, this case demonstrates that it is certainly possible, even though the appropriate remedy will be determined on a case-by-case basis.  As such, homeowners associations are best served by contacting a community association attorney as soon as possible when they are concerned that construction is being commenced in violation of the restrictive covenants.

Kevin Hirzel is the Managing Member of Hirzel Law, PLC and concentrates his practice on commercial litigation, community association law, condominium law, Fair Housing Act compliance, homeowners association law and real estate law. Mr. Hirzel is a fellow in the College of Community Association Lawyers, a prestigious designation given to less than 175 attorneys in the country. Mr. Hirzel has been recognized as a Michigan Super Lawyer’s Rising Star in Real Estate Law by Super Lawyers Magazine, a Leading Lawyer in Condominium & HOA law by Leading Lawyers Magazine, and as a Best Lawyer in Real Estate Law by U.S News and World Report’s Best Lawyers Publication. He represents community associations, condominium associations, cooperatives, homeowners associations, property owners and property managers throughout Michigan. He may be reached at (248) 450-0339 or kevin@hirzellaw.com.

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kevin@hirzellaw.com

Kevin Hirzel is the Managing Member of Hirzel Law, PLC. Hirzel Law has offices in Farmington, Grand Rapids, and Traverse City and services clients throughout the State of Michigan. Mr. Hirzel focuses his practice on condominium law, homeowners association law, and real estate law. He is a fellow in the College of Community Association Lawyers (“CCAL”), a prestigious designation given to less than 175 attorneys in the country. Mr. Hirzel formerly served on the CCAL National Board of Governors and is a former member of the Community Associations Institute’s (“CAI”) Board of Trustees, an international organization with over 40,000 members worldwide that is dedicated to improving community associations. Mr. Hirzel has been recognized as a Leading Lawyer in Michigan by Leading Lawyers, a distinction earned by fewer than 5% of all lawyers licensed in Michigan. He has been named a Michigan “Rising Star” in real estate law by Super Lawyers Magazine, a designation is given to no more than 2.5% of the attorneys in Michigan each year. Mr. Hirzel was also named as a “Go-To-Lawyer” in condominium and real estate law by Michigan Lawyer’s Weekly. Hirzel Law was also voted the best law firm in Metro Detroit in the Detroit Free Press Best of the Best awards. He is the Co-Chairman of the State Bar of Michigan’s Real Property Law Section Committee for Condominiums, PUDs & Cooperatives. Mr. Hirzel has authored numerous articles on community association law for publications such as the Michigan Community Association News, Michigan Real Property Review, Macomb County Bar Briefs and the Washington Post. He is also the author of “Hirzel’s Handbook: How to operate a Michigan Condo or HOA”, which is available for purchase on amazon.com. Mr. Hirzel has been interviewed on community association legal issues by various media outlets throughout the country, such as CBS, CNBC, Common Ground Magazine, Community Association Management Insider, the Dan Abrams Show on SiriusXM Radio, the Detroit News, Dr. Drew Midday Live on KABC Radio, Fox Business News, Fox News, HOALeader.com, the Law & Crime Network, Michigan Lawyer’s Weekly, NPR, WWJ News Radio and WXYZ. Mr. Hirzel is a dynamic speaker and frequently lectures on community association law throughout Michigan, as well as nationally at the CAI National Law Seminar, and is a two-time winner of the best manuscript award at the CAI National Law Seminar.

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