Court Protects Homeowners from Harsh Remedy for Construction Without HOA Approval and Violation of Setback Covenant

This case involved a dispute between homeowners (“Owners”) and their homeowners association (“Association”) over Owners’ right to continue with the construction of a house on their property that was being constructed without HOA approval and in violation of a setback covenant.  Owners, through their contracting company, began construction of their home after receiving a city-issued permit, but without having first obtained HOA approval of their project. When Owners refused to cease construction after Association ordered them to stop work, Association filed suit seeking a permanent injunction to stop construction and remove the portions of the house that violated the setback requirement.

In response to Association’s action, Owners contended that enforcing the restrictive covenant would cause them great hardship and that the setback requirement no longer served a valid purpose. Association contended that Owners’ prior knowledge of Association’s approval process barred them from raising equitable defenses. Owners also filed a counterclaim, alleging that Association failed to enforce the same restrictive covenants against their neighbors.

The trial court found in favor of Association and: