McDaniel Homes owned real estate in Houston. The Meyerland Community Improvement Association was in charge of enforcing deed restrictions. One of the restrictions allowed stairs, steps, and ramps to be located up to five feet outside of the front building setback line.
McDaniel sought a declaratory judgment that the restriction had been waived through abandonment.
The POA denied the allegations, and filed a motion to dismiss, asserting that McDaniel’s claims have no basis in fact or law. The trial court granted the motion of the POA and dismissed McDaniel’s claim.
McDaniel Homes appealed.
The Court of Appeals reviewed McDaniel’s assertions that: (a) the POA has not enforced restrictions consistently; (b) there are dozens of properties throughout the neighborhood that violate the restrictions; and (c) the POA has decided to selectively enforce the restrictions against McDaniels and no other developers or property owners.
This yielded an analysis of the facts required under Texas law to conclude that restrictions have been abandoned, and enforcement waived. To successfully establish this position, the Court of Appeals determined that the litmus test is: “violations of the covenant then existing are so great as to lead the mind of the average person to reasonably conclude that the restriction in question has been abandoned and its enforcement waived.”
To make that evaluation, the Court must consider the number, nature, and severity of existing violations, any prior enforcement of the restriction, and whether it is still possible to realize to a substantial degree the benefits of the restriction despite the violations.
The Court of Appeals decided that the facts presented have a basis in law, and cannot be dismissed as overly broad or vague, or improperly fail to allege a claim. The Court refused to rule for McDaniel based on the facts claimed, but presumably if McDaniel can prove the facts alleged in trial court, then the restrictions will fail.
The trial court’s judgment is reversed and the case returned for a full trial to allow a jury or judge to evaluate the facts McDaniels alleges. McDaniel wins this round. See McDaniel Homes v Meyerland Community Improvement Association; Case Number 14-22-00854-CV; Texas 14th Court of Appeals; May 23, 2024: https://scholar.google.com/scholar_case?case=12496832388846844844&q=mcdaniel+homes+llc+v.+meyerland+cmty.+improvement+ass%27n&hl=en&as_sdt=6,44&as_vis=1.
Questions / Issues / Comments:
1. Am I the only one looking for a timing requirement – at least a suggestion – to support the conclusion that deed restrictions have been abandoned or waived? I find it compelling that timing of the acts leading to the alleged waiver or abandonment was not addressed by this Court of Appeals. Was that omission purposeful?
2. Can restrictions be waived or abandoned this easily, and if so, are POA and HOA directors, lenders, developers, tenants, and property owners aware?
3. If McDaniels ultimately receives a final Judgment in support of McDaniels’ position, will that be sufficient to cause a title insurance underwriter to remove or amend the exception in an Owner’s Policy and Lender’s Policy related to recorded restrictions at least with respect to stairs, steps, and ramps?
Stuart
A. Lautin, Esq.*
* Board Certified, Commercial (1989) and Residential (1988) Real Estate Law, Texas Board of Legal Specialization
Licensed in the States of Texas and New York
Reprinted with the permission of North Texas Commercial Association of REALTORS®, Inc.
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