Quite frequently, the homeowners association ("HOA") of a subdivision will want to amend, remove or add provisions to the governing documents, generally called an indenture, restrictive covenants or covenants and restrictions. Changes can be relatively minor, from changing the date of the annual meeting (please, do not schedule for the last day of October, Halloween, the fourth Thursday of November, Thanksgiving, or some other holiday, either by specific date or particular week of the month), number of board members or even the requirements for payment of the annual assessment. Those changes would arguably not expand the reach of the indentures or restrictions.
But what happens when the homeowners association wants to expand its reach, such as change the use of real property within the subdivision from only single-family residences to multifamily? What if the HOA desires to further limit use of real property within the subdivision beyond that in effect?
Missouri law is clear: The free and untrammeled use of real property is favored, and restrictions on real property are regarded unfavorably and are strictly construed. Furthermore, courts have held that when there is substantial doubt as to the meaning of the wording of any restrictions, such should be resolved in favor of the free use of such property.
Courts in Missouri recognize that restrictive covenants running with the land may be extinguished, modified or changed by mutual agreement between all of those subject to the restrictions and all of those entitled to enforce them. In making a modification or change, the restrictions need not be uniform as to all lots but may contain any pattern of restrictions which could have been contained in the instrument originally creating the restrictions.
In a nearly 50-year-old case, the Missouri Supreme Court was confronted with a situation in which, pursuant to the originally recorded indentures, 75 percent of the owners could "release any one or more of the covenants as above mentioned" after the 15th anniversary of the recording of the covenants. Pursuant to such authorization, but over 10 months prior to the 15th anniversary, the covenants were amended to permit, on only six of the lots, multi-family residences instead of single-family homes. Another "Modification and Amendment to Restrictions" was executed, further lessening the restrictions on the use of lots within the subdivision. And subsequent to the "Modification," seven of the lot owners signed a "petition" seeking to disapprove a proposal to build certain multi-family housing otherwise in compliance with the restrictions as amended.
A lawsuit was filed to determine if the "disapproval petition" negated the consents of the seven lot owners to the "Modification." The Missouri Supreme Court, distinguishing from a very similar case wherein that court held that restrictions could not be released as to some but not all lots bound by restrictive covenants, held in the case described above that the owners could legally amend or modify restrictive covenants to some and not all lots. (Perhaps the distinguishing element being a release of all restrictions as to some lots is not permissible, while a release of some restrictions to some lots is acceptable.)
The court went on to hold that the disapproval petition was not effective to rescind and revoke an authorization already granted.
In an even earlier case, the Missouri Supreme Court held that a provision in the indenture permitting same to modified, amended, released or extinguished did not permit the restrictions to be changed to impose new restrictions on the use of lots within the subdivision.
The subdivision in question was Davis Place, located in Clayton, Missouri. The original indentures, dated June 15, 1925, restricted, among other uses, apartments and commercial buildings to be located only along Clayton, North and South roads, while only apartments were permitted along Hanley Road.
Just over 10 years after adoption of the original indentures, an instrument of modification was executed and recorded which purportedly prohibited the erection of apartment and commercial buildings along Clayton, North, South and Hanley roads.
The court, again recognizing Missouri’s policy that restrictive covenants are to be strictly construed, noted that "[r]estrictions, being in derogation of the fee conveyed, will not be extended by implication to include anything not clearly expressed."
The court, interpreting each of the words connoting a permission to change the indentures (i.e., modify, amend, release and extinguish) found in each instance that the words did not warrant "a meaning which would authorize new burdens to be added." Continuing, the court noted that "the power to modify anything does not imply a power to substitute a thing entirely different."
Recognizing that Missouri courts unequivocally hold that the free and untrammeled use of real property is favored while restrictions on the use of real property are regarded unfavorably and are to be strictly construed, it should not come as a great surprise that an HOA will find it very difficult to amend or modify their subdivision’s indentures to restrict use of lots beyond that initially contemplated. Of course, application of law is not utilized in a vacuum, but is applied to specific, and always different, facts between cases. Undertaking discussion to permit, much less enacting, amendments to your subdivision indentures should always be done after a review of the state of the law in concert with your association’s legal counsel.
Weiss Attorneys at Law, P.C. represents homeowner associations, condominium associations and other community associations in governance, enforcement and collection matters. If we may be of service to your association, please contact us at 314-588-9500, by email at firstname.lastname@example.org or online. BIG FIRM EXPERIENCE. Small Firm Accountability.