Can Homeowners Install Swim Spas? Key Lessons from Hills of Oakland v. Seibert
“[R]estrictions for residence purposes, if clearly established by proper instruments, are favored by definite public policy. The courts have long and vigorously enforced them by specific mandate.” Oosterhouse v Brummel, 343 Mich 283, 287; 72 NW2d 6 (1955). Property owners within community associations across Michigan and the nation are increasingly installing swim spas in their backyards, though often in violation of restrictive covenants concerning the community and without obtaining their Association’s approval as required.
Swim Spas
Swim spas are often considered to be the best of a hot tub and pool in one, a so-called year-round aquatic playpen. A swim spa can provide swimming for everyone from children to elite-level athletes. It’s also a stretched hot tub, longer and wider, with a current generated for swimming stationary laps. Like a hot tub, it operates year-round, often with massage-heated seats. The spa tank is large enough for swimming workouts, use as a small pool, and for hosting group parties. It’s, therefore, an increasingly popular backyard amenity. Community association governing documents often prohibit the installation of above-ground swimming pools, but most don’t address swim spas as they didn’t exist or were not widely known when the association’s governing documents were adopted.
Swim Spa Litigation
Hills of Oakland Subdivision Association is a nonprofit corporation that administers the affairs of the Hills of Oakland residential subdivision in Rochester Hills, Michigan. Lots within the subdivision are subject to restrictive covenants stated in the subdivision’s Declaration of Restrictions. Article V of the Declaration sets forth the building-use restrictions, including Section 9H, which states, in part, that no “above ground swimming pools” shall be erected or maintained on any lot. Victoria Seibert owns a lot in the subdivision and installed a concrete pad, elevated “Trex” deck, and “Hydropool swim spa ” in early 2022. A set of stairs leads to an elevated deck surrounding two of the four sides of the swim spa, which is not connected to Ms. Seibert’s house. Another subdivision lot owner noticed the structure and reported to the Association’s Board of Directors in April 2022 that he believed a new above-ground pool had been installed on Ms. Seibert’s lot.
In response, the Association’s property manager sent letters to Ms. Seibert, the first alleging that she had violated the Declaration by installing the swim spa structure without approval from the Board’s Architectural Control Committee, to which Ms. Seibert submitted detailed plans and specifications and a building permit regarding the structure. The property manager’s second follow-up letter, following consultation with the Board, alleged that the structure, as described in the plans and specifications, is an above-ground swimming pool in violation of the Declaration’s prohibition (an above-ground swimming pool, however, is not defined in the Declaration). The Board voted unanimously to pursue enforcement of the Declaration against Ms. Seibert and requested her to remove the swim spa structure or, alternatively, submit a request to the Committee for its approval to convert it to an in-ground pool subject to City approval.
Ms. Seibert did neither, and in response, the Association filed a complaint against Ms. Seibert with a claim of breach of contract alleging violations of Article V of the Declaration, seeking a permanent injunction against the alleged violations, requiring her to remove the entire structure at her expense. The Association and Ms. Seibert eventually filed cross-motions for summary disposition in the trial court. Ms. Seibert argued, among other allegations, that the swim spa structure was not an above-ground swimming pool. The trial court granted the Association’s motion and denied Ms. Seibert’s motion, holding that Ms. Seibert had not obtained the Board’s pre-approval prior to installing the swim spa structure in violation of the Declaration and that the structure was an above-ground swimming pool explicitly prohibited by the Declaration.
On appeal, the Court of Appeals, looking at the Declaration’s restriction against “above ground swimming pools,” found that there is nothing ambiguous about the descriptor “above ground,” and Ms. Seibert has never disputed that the swim spa structure is entirely above ground. (“Courts should strictly construe ambiguous deed restrictions in favor of free use; however, courts will enforce unambiguous deed restrictions as written.” See Thiel v Goyings, 504 Mich 484, 496; 939 NW2d 152 (2019).) Additionally, looking at the definition of “swimming pool” in Merriam-Webster’s Dictionary, the Court found that a swimming pool is simply a “pool suitable for swimming,” especially “a tank (as of concrete or plastic) made for swimming.” (When a term is not defined in the agreement, courts will give the term its commonly used meaning. See Bloomfield Estates Improvement Ass’n, Inc v City of Birmingham, 479 Mich 206, 215; 737 NW2d 670 (2007).) The Court also referenced the manufacturer’s representation in its marketing materials, attached to the Association’s summary disposition motion, that the swim spa is “the perfect way to swim every day” and a training device in which the user swims, finding that the swim spa meets the common meaning of the term swimming pool.
Furthermore, and importantly, the Court held that the Declaration properly vested the Architectural Control Committee with the discretion and the standard by which to approve or disapprove an owner’s proposed exterior modifications to the property on the basis of the harmoniousness with the subdivision citing Section 17, Subsection E’s catchall provision providing the Committee the authority to disapprove plans “because of any matter or thing, which in the reasonable judgment of the Committee, would render the proposed improvement or alteration inharmonious or out of keeping with…the improvements erected on other Lots in the Subdivision.” The Court found that such authority aligned with the longstanding business judgment rule applicable to corporations (“so long as the directors of a corporation control its affairs within the limits of the law, matters of business judgment and discretion are not subject to judicial review.” Reed v Burton, 344 Mich 126, 131; 73 NW2d 333 (1955).). Accordingly, the Court held that it couldn’t question the Board’s decision to accept the Committee’s determination that the swim spa structure was unacceptable when the unambiguous Declaration language established its authority to do so.
The Court affirmed the trial court’s opinion.
Conclusion and Takeaways for Community Associations
The Court of Appeals’ opinion in Hills of Oakland Subdivision Association reinforces enduring Michigan law of the Board’s ability to enforce the Association’s restrictive covenants in its business judgment and discretion in compliance with Michigan law. Notably, the Court specified that a swim spa could meet the definition of an above-ground swimming pool as included in a Declaration of Restrictions and, therefore, be prohibited within a community if pools are banned pursuant to the association’s restrictive covenants. The Court’s opinion, therefore, reinforces the Board’s sole and principal authority to preserve the aesthetics and uniformity of the community it serves.
Chris Jacobson, Esq., is a Senior Attorney with Hirzel Law, PLC, specializing in general counsel matters and document amendments. Mr. Jacobson earned his LL.M. in Taxation from Wayne State University Law School in 2011. He received his Juris Doctor from Cooley Law School in 2006, graduating with Certificates of Merit in Advanced Writing, Research and Writing, and Business Planning, and was awarded the Fitzgerald Class Honors Scholarship. He completed his undergraduate studies cum laude at Western Michigan University’s Lee Honors College in 2003. Before joining Hirzel Law, Mr. Jacobson served as a Supervising Staff Attorney at Honigman LLP, where he gained extensive experience in both the public and private sectors. His legal career is marked by a commitment to excellence and a collaborative approach to resolving complex legal issues. He can be reached at (248) 478-1800 or cjacobson@hirzellaw.com.
