COURT SAYS HOA RULES AND DESIGN GUIDELINES THAT CONFLICT WITH THE DECLARATION ARE INVALID

This case involved a dispute between homeowners (“Owners”) and their homeowners association (“Association”) over the validity and enforceability of a rule adopted by Association’s Design Review Committee (“DRC”) that prohibited perimeter fences, and whether action by Association’s board of directors which allowed perimeter fences violated their duties.

Factually, Association’s Declaration established the DRC to approve lot improvements, including fences, to preserve architectural aesthetics and natural beauty with the community. Section 13.05 of the Declaration required prior approval for improvements but did not explicitly ban fencing. In 1998 the DRC adopted a Design Manual (“Manual”) that created an outright ban on fences, except around pools. In 2021, the DRC amended the Manual, removing the blanket ban and allowing fences for safety reasons, subject to design restrictions. Owners filed suit against the Association and members of its Board seeking injunctive and other relief, alleging that the amendment to the Manual improperly authorized perimeter fencing was not in the community’s best interest, and was enacted for the Board members’ individual benefits, which violated their duties to the Association as a whole. In response, the Association filed a counterclaim for declaratory relief requesting a finding that the Association could permit perimeter fencing and that the DRC did not have the authority to altogether prohibit such types of fences in its Manual because they were permitted under the Declaration.

The trial court entered partial summary judgment in favor of: