Guest Post By Weissman, Nowack, Curry & Wilco, P.C.

Most communities these days are developed in phases or sections. The declarations of covenants for these communities will generally provide that the initial phase of the community is submitted to the declaration, and will provide that the developer has the unilateral right to submit additional phases to the declaration as the community is built out. Typically, the declaration will require the developer to record a supplemental declaration or expansion amendment in the county land records. Many community associations are discovering, however, that some lots or phases of development within their communities were never submitted to the declaration. One homeowners association, for example, recently discovered that the community’s developer had only submitted the first of the community’s five phases of development to the declaration. The remaining four phases of the community and the lots within those phases were never submitted to the declaration.

If your association discovers that some of the lots or phases of development within the community are not subject to the declaration, here are three common approaches to address the problem.

First, research your county’s land records to see if some other document subjects the additional phases or lots to the declaration. This could be through references on the community plats or even individual deeds of homeowners. Title searches on a few lots might reveal that owners in the chain of title to those lots, rather than the developer, have submitted their lots to the declaration.

Second, request owners in the phases not subject to the declaration to sign consent forms to submit their lots to the declaration. A legally binding consent form can be prepared by counsel and will need to be recorded with the county’s land records once the owners of a lot sign it. A certain number of homeowners will usually sign such a consent form because they believed they were already part of the community association and subject to the declaration since the day they purchased their homes. You can explain to other owners that if they do not consent, there might not be sufficient funds from assessments for the upkeep of the common areas and amenities and that owners who do not consent may have no legal right to use the amenities and do not have the protection of the covenants.

Third, if there are homeowners who do not consent, there may be sufficient facts for your association to file a declaratory judgment lawsuit against those owners in an attempt to have a court declare that the declaration should be “implied” against all of the phases and lots in the community. The implied covenant theory allows the superior court to exercise its equitable powers to imply covenants against a tract of property, despite the fact that the tract was never submitted to the declaration, when it is apparent to the court based upon all of the facts involved that the developer intended to submit the tract. Some of the facts the court could take into account include (1) a signed statement by the developer that the developer intended to submit the additional phases of development to the declaration but inadvertently did not do so, (2) a common grantor (i.e., the developer) selling the lots, (3) an apparent scheme of development by the developer (i.e., a neighborhood), and (4) owners who purchased their lots with notice of the apparent general scheme of development indicated by any of the following factors: (a) a uniform visual appearance of the community, (b) representations made by the developer or sales staff, (c) written sales materials, (d) a sales contract referencing the declaration, and/or (e) a document signed by the owner at the closing acknowledging receipt of the declaration.

Of course, these are some of the common approaches and might not be appropriate for your community. If your community determines that it may have some lots or phases that appear not to have been submitted to the declaration, it is important that you review these issues with a community association attorney to determine what strategy and course of action make sense for your association.