Imagine this: You buy some property in a community with the intention of using the property for a purpose other than as your home. Maybe you want to list the property on AirBNB/VRBO, or rent it out directly for short periods of time. Maybe you would like to open a business, like running a small salon or a photo studio. Whatever the purpose may be, perhaps you have seen the neighbors – or other property owners in the same community – already doing exactly the same thing. You think, well, if several other people are doing it, and we are all bound by the same rules, why can’t I?
Then, a few weeks later, you receive a notice from your HOA. They say that you are not allowed to continue using your property this way. They tell you there are community rules in place preventing homeowners from using their house in this way. But, for some reason, while they have been allowing those other homeowners to break the rules, they are telling you that you have to stop. What can you do?
Waiver of Restrictive Covenants
Under these circumstances, it is possible that some or all of the rules governing the use of the property, such as deed restrictions or HOA bylaws, have been waived. Restrictive covenants in Texas may be waived under certain circumstances. Tenneco Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996). Whether or not they have been waived is judged on a case-by-case basis. Waiver is found by a court where the violations of the covenants already existing in the community “are so great as to lead the ‘average man’ to reasonably conclude that enforcement of the restriction has been waived.” Finkelstein v. Southampton Civic Club, 675 S.W.2d 271, 278 (Tex.App.-Houston [1st Dist.] 1984, writ ref'd n.r.e.).
Whether or not that has occurred is typically a question of fact. To determine whether waiver has occurred, courts will look at a number of factors to see whether the violations in the community have risen to the level of waiver:
- The number, nature, and severity of the existing violations;
- Prior acts of enforcement of the restrictions; and
- Whether it is still possible to realize to a substantial degree the benefits intended by the restrictions.
What if the Restrictions Explicitly Say They May Not Be Waived?
Some restrictive covenants expressly state that they may not be waived, regardless of how much enforcement or non-enforcement of the rules is occurring. Even in those cases, however, there is a possibility for waiver, although it is harder to win a waiver defense in such cases.
In order for a Texas court to find that a nonwaiver clause has itself been waived, a party would have to demonstrate through evidence that the nonenforcement has resulted in a “complete abandonment of the entire set of restrictions, including the nonwaiver provision.” Sides v. Saliga, No. 03-17-00732-CV, 2019 WL 2529551, at *14 (Tex. App.-Austin June 20, 2019, no pet. h.) (mem. op.) (quoting Vance v. Popkowski, 534 S.W.3d 474, 479-80 (Tex. App.-Houston [1st Dist.] 2017, pet. denied). A court will find this has occurred where “there is evidence of violations so pervasive that they have destroyed the fundamental character of the neighborhood.” Id.
Again, whether this has happened in any given community should be assessed on a case-by-case basis. In Musgrove v. Westridge St. Partners I, LLC, No. 2-07-281-CV, 2009 WL 976010, at *5 (Tex. App.—Fort Worth Apr. 9, 2009, pet. denied), for example, a court found that a nonwaiver clause had itself been waived, along with all of the other previously existing restrictive covenants, where four of the eight original lots in a community were now apartment buildings and garden homes instead of single-family residences, even though the deed restrictions required that “[n]o ... apartment house ... and no building of any kind whatsoever shall be erected or maintained thereon except private dwelling houses ... [denoted] and designed for occupancy by a single family only.”
If you are ever in a position where you feel that your HOA is enforcing its rules in an inconsistent manner, and you are being denied the ability to use your property in a certain way as a result, it is crucial to reach out to qualified lawyers who can provide you with a formal legal opinion about the nature of your restrictive covenants and advise you on your potential defenses against HOA enforcement actions.
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