Covenants, conditions and restrictions (CC&R’s)
Covenants, conditions and restrictions (CC&R’s) are commonly used to maintain uniformity of improvements to real estate and to otherwise regulate the use of property.
Historically, Arizona courts narrowly construed such restrictive covenants in favor of the free use of land. However, in Powell v. Washburn, 211 Ariz. 553, 556–557, 125 P.3d 373 (2006), our Supreme Court rejected Arizona’s prior policy of construing restrictive covenants in favor of the free use of the land, and adopted the approach of the Restatement (Third) of Property. Under the Restatement, the Declaration “should be interpreted to give effect to the intention of the parties as determined from the language of the document in its entirety and the purpose for which the covenants were created.” (See Restatement, § 4.1(1)). Now, courts are supposed to apply ordinary contract interpretation principles – to ascertain and give full effect to the intention of the party adopting the CC&R’s based primarily on the language used in the CC&R’s.
In Powell, at the time the declaration was recorded, its express terms failed to address a question that later arose unexpectedly (i.e., the Powell declarant did not anticipate La Paz County would amend its zoning ordinance to permit the use of an RV as a single family residence in a manufactured home subdivision). Thus, despite that the Powell declaration did not expressly prohibit RVs as single–family residences in the park, the Supreme Court interpreted it to prohibit them because the county’s amendment was unexpected, and because the language of the declaration and the circumstances surrounding its creation evidenced the intent to limit residences in the park to only mobile or manufactured homes, constructed homes, or hangar–homes. In Powell, there was substantial evidence (and language in the declaration itself) to support a distinction between the allowed types of homes and disallowed types, such as RV’s.
There are many other issues that may arise in CC&R enforcement cases, including whether the restrictions have been uniformly and reasonably enforced, and whether they have been modified or waived.
If you have questions concerning the enforcement or defense of claims involving real estate restrictive covenants, please contact us. Berk & Moskowitz, P.C. has handled a wide variety of disputes involving CC&R’s, including claims for damages, finds and injunctive relief.