Iowa Court of Appeals Case Regarding Document Expiration

Hi All,

Thought you might be interested in reading the Iowa Court of Appeals case heard last year regarding document expiration.

It's entitled Chipman vs. Carney and specifically addresses the 21-year limit on covenants imposed by Iowa code 614.24.

http://www.iowacourts.gov/court_of_appeals/Recent_Opinions/20120229/1-867.pdf

I have tried multiple times to inform the HOA board of this ruling but they continue to operate as if this has no impact on the control that they want to exert in the neighborhood. I've posted before that they do not enforce the building restrictions but found out yesterday that they still try to impose them on certain individuals in the development. My neighbor said that he was asked to remove a temporary port-a-potty even though it was during construction of his house. The BOD president had an extended family reunion and guess what, he put a temporary port-a-potty on his property. This same neighbor was also asked to remove a trailer he kept in his yard but the BOD president keeps a large pontoon boat on his property. This neighbor was told he had to pay $15,000 for the HOA to bring the sanitary sewer line to his property yet a BOD member was reimbursed by the HOA for the line he had constructed to his property. I have documentation to prove this so it is not just neighborhood gossip.

I'm sure other neighbors have had to face the wrath of this out-of-control HOA which I believe is now defunct. My question is, what legal recourse do we have? I have a pending legal action against me (I have discussed this in a previous thread)for payment of court costs and service process fees. The HOA refuses to release me from the small claims action so I responded with a counterclaim for refund of membership dues hoping that I can get my legal arguments to be heard by the judge. Any opinions on whether you think this might work would be appreciated or any other ideas. Thanks. - Sherry

Sherry,

I did read the document you provided.

Based on the information contained in your previous threads on this topic:
Subject: HOA Says Not an HOA
Subject: Enforceability of By-Laws
Subject: Quorum Requirements and Illegal Vote

I would say the issue will be decided on what you specified in your first thread (Hoa says not an HOA).

Per that thread, your Association informed you that they are not an HOA. This, in my mind, supports your statement that the Covenants expired and the Association lost authority granted by those Covenants.

In that same thread, your Association informed you that they are a Corporation (lets call them HOA, INC.). It is likely that, similar to when a corporation (HOA, Inc.) is administratively dissolved the Association (HOA) still exists, just because the Association lost it's authority, the Corporation still exists (and provides sewage service) and can legally charge for the services they provide.

I don't know. I am not an attorney and I do not work in the legal profession. However, I do see a logic behind what I just said (which is similar to what I said in that first thread). Only an attorney versed in IA law and has access to your governing documents can say if the argument has merit.

Therefore, I will repost what I posted on that thread:

"You better figure out what your legal rights and the Association's legal authority is way before you go to court."

I urge you to seek out a qualified legal opinion as soon as possible

Iowa has a unique statute regarding restrictions on land use that is worthy of note. At least once every 21 years, those persons who own property subject to restrictions must record a renewal of the restrictions. The recorded document must be approved by at least half of the owners, conform to certain statutes regarding notarization of signatures, must state that it is a renewal of restrictions and where the restrictions were originally recorded, and the document must be recorded in a specific book maintained by each county recorder just for that purpose.

The renewal of Chipman's CC&R's failed because only five of fifteen owners approved, they failed to record the renewal in the proper book, the document was not properly notarized, and it failed to specify where the original documents were recorded.

The Iowa court noted that the purpose of having a special book for recording renewals is so that if a person goes looking for a renewal and fails to find it in the special book, he may then conclude that no renewal has been recorded.

Compare the Iowa statute to Florida's MRTA.

Anyone can incorporate and state any purpose they wish but paragraphs 3 and 4 are not binding on others without their consent.

As I understand it, if the covenants were properly recorded in 1971 then they had to be renewed per Iowa Code 614.24 no later than 1992. The statute requires very specific action to qualify as a renewal and amending the articles of incorporation for a sewage system is not consistent with the Chipman opinion's explanation of how the statute works.

My first guess is that in 1991 one or more homeowners were aware of the renewal requirement but were also uncertain as to what to do and were not willing to seek legal advice so they amended the articles of incorporation for the association instead of renewing the underlying covenants. By failing to renew the covenants within the 21-year limit, the owners let the covenants die.

Since there is no longer any covenants, the incorporated sewer association cannot impose any involuntary memberships or assessments. On the other hand, they may be within their rights to refuse service to those who do not accept their terms. One thing to check out: Does the state or county regulate private sewer systems?

One final thought: If the sewer system was a part of the original development and ownership was turned over to the lot owners, you may have a property interest in the system whether there are covenants or not.