Daily Development for Tuesday, March 6, 2001

SERVITUDES; USE RESTRICTIONS; MOBILE HOMES: The term "mobile home" in a subdivision covenant providing that "No trailer, camper, mobile home, or motor home shall be . . . used as a permanent residence" is inherently ambiguous, and consequently a prior interpretation of the restriction may constitute an estoppel of any enforcement inconsistent with that restriction.

Holiday Acres Property Owners Ass'n v. Wise, 998 P.2d 1106 (Colo. App. 2000).

A limited partnership, Holiday Acres, developed a 500acre subdivision consisting of 169 lots. Protective covenants filed in 1974 purported to restrict the use of mobile homes in the subdivision, and also require that Holiday Acres approve any "building, fence, patio or other structure"

prior to construction. At that time, one of the general partners, who was also the sole member of the architectural committee, interpreted the mobile home provisions in a letter, stating that doublewide modular homes permanently attached to the foundations with tongues and axles removed were acceptable, but that no singlewide mobile homes were allowed. Four or five lots were developed with such structures.

By 1996, much of the subdivision had been developed in a more upscale manner. Defendants began to construct doublewide homes on their lots.

Believing their property values were at stake, the other homeowners established a property owners' association with the stated purpose of enforcing the covenants. The association then notified Defendants that they were violating the covenants, and applied for a mandatory injunction.

The trial court concluded that the term "mobile home" was unambiguous, that the doublewide homes violated the prohibition, and issued the injunction.

The Court of Appeals reversed, concluding that the term "mobile homes"

as used in the covenants, was ambiguous. It noted the significant differences between transportable manufactured homes and ordinary "house trailers," and pointed out that many might use the term "mobile home" to refer to both. Others, of course, would differentiate among manufactured houses that, by design and function, ultimately will become permanent houses and other forms of housing that are easily relocatable.

Apparently, in the mid 70's, one of the original developerThe doctrine of equitable estoppel may be applied to preclude enforcement, by the architectural control committee of a homeowners' association, of a restrictive covenant that inures to the benefit of all lot owners in the subdivision. The Court of Appeals held that the association was equitably estopped from enforcing the covenant based upon the general partner's letter, and the fact that several mobile homes had been approved by the association and already existed in the subdivision

Comment: For the opposite conclusion, see Rose v. Barbee, 511 S.E.2d 268 (Ga. App. 1999), the DIRT DD for 7/20/99, which held that a permanently installed modular home is a "mobile home" was within the meaning of a Georgia restrictive covenant prohibiting the placing of "mobile homes" on the subject property.

For another holding to the same effect, see Toavs v. Sayre, 934 P.2d 165 (Mont. 1997), the DD for October 6, 1997. For another case generally permitting mobile home restrictions, see Cypress Gardens, LTD. v. Platt, 952 P.2d 467 (N.M. App. 1997).

Comment 2: In connection with the Rose case, the editor commented:

"The court dismisses the landowners' claim that the concept of "mobile home" was "unconstitutionally vague," perhaps for the obvious reason that the Constitution would not be implicated in most private restrictions (despite a few maverick holdings to the contrary). But wouldn't the well being of the law be better served by the court's attempting to define where the line exists between "mobile" and "nonmobile"homes instead of relying upon circumstantial evidence and unfortunate misstatements by the parties?

Upon reflection, and educated by the instant case the editor thinks that he was wrong. This ought to be a problem of interpretation of contract language. Where it is not clear that there is a generally accepted meaning for a term, and the dispute focusses on that ambiguity, then it seems more appropriate for the court to seek the intent of the parties than to impose a rigid rule.

Comment 3: Sometimes, the vagueness of a term can be a factor in estoppel. Here, for instance, the concept "mobile home" is sufficiently amenable to differing interpretations that the editor concurs that parties reasonably could rely upon the architectural committee's prior statements in defining the term for purposes of this subdivision. But it appears from this case that we have more of a waiver argument than a reliance argument. Waiver can occur where the association has failed to enforce the covenant as written in past instances.

Comment 4: Waiver can also be a basis for reliance. For instance, even where a provision is clear, an estoppel can arise if the association has waived enforcement and a party has relied upon that waiver. Woodmoor Improvement Association v. Brenner, 919 P.2d 928 (Colo. App. 1996).

(The DD for 1/11/97) (Although facially clear protective covenants generally must be enforced as written, homeowners' association may be estopped from enforcing covenants against residents where residents sought approval from architectural committee prior to construction, architectural committee approved project, and residents reasonably relied on approval.)

Comment 5: For another instance of estoppel undermining covenant enforcement, see Jefferson Place Condominium Association v. Naples,

125 Ohio App.3d 394, 708 N.E.2d 771 (Ohio App. 1998), the DIRT DD for 10/1/99) (pet exclusion) (Representations made by broker representing developer in sale of units during Developer Control Period can estop the Association from enforcing express provisions of Declaration against party who buys unit in reliance upon those representations.

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