declarant foreclosed - are CCRs enforceable for new homes

Started by MelC • 8 replies • 2126 views

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MelC (North Carolina)
Posts: 4

Posted:

I live in a community of approximately 70 lots, of which approximately 30 lots have homes. The HOA was originally managed by a management company, but during the first year the homeowners at that time voted to fire them and we now self manage the HOA. The following year the developer (declarant) went into foreclosure on the remaining lots and they became bank owned.

Since that time, about 5-6 new homes were built by two different builders. Both of those builders said that they were not under any obligation to follow the Covenants, Conditions and Restrictions.

My main question are:

1. If there is no declarant, are the CCRs still enforceable?
2. Do the new homeowners have to comply to the CCRs?
3. If the new homeowners don't have to comply, do the original homeowners (those who purchased from the original declarant) still have to comply with the CCRs?

Thank you for your time.

MatthewW4 (Arizona)
Posts: 500

Posted:

The CC&R's became effective after they were recorded and the declarant sold his first lot. Those later buyers who were told their properties were not subject to the recorded restrictions have a cause of action against their builder(s).

In answer to your questions:

1. The current location, health, or financial situation of the declarant plays no part in whether the restrictions are enforceable.

2. Yes. As stated above, if the sellers failed to inform their buyers of the restrictions then the buyers have a beef with the sellers.

3. Unless there has been a court action to invalidate the restrictions, they are still in effect and all owners are subject to them regardless of when they purchased or from whom.

Question: Why did a title search not reveal the existence of the restrictions? Or did the buyers just ignore the title search?

DaveD3 (Michigan)
Posts: 796

Posted:

As Matthew said, the restrictions are tied to the PROPERTY, not the developer.
A quick check with the Register of Deeds will turn up the declaration for the development which should include a plat map and description of those properties included in the declaration.

MelC (North Carolina)
Posts: 4

Posted:

Thanks for the responses. I guess the board doesn't know how it works either because at our annual HOA meeting they stated that the new homes were not under the CCRs.

MelC (North Carolina)
Posts: 4

Posted:

I don't know if the buyers did a title search or not. I'm not one of them. I've been here since the very beginning.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By DaveD3 on 07/30/2013 7:03 PM
As Matthew said, the restrictions are tied to the PROPERTY, not the developer.
A quick check with the Register of Deeds will turn up the declaration for the development which should include a plat map and description of those properties included in the declaration.

Start here. Find out if here are Deed Restrictions that reference Covenants, association, etc.

MelC (North Carolina)
Posts: 4

Posted:

Thanks. I'm working on that now. Thank you for your help.

KevinK7 (Florida)
Posts: 1,343

Posted:

I would wonder if the declarent had not filed covenants and restrictions for the new properties, which would make the assertion correct that only the built lots are subject.

MatthewW4 (Arizona)
Posts: 500

Posted:

Quote:

Posted By KevinK7 on 07/31/2013 7:51 AM
I would wonder if the declarent had not filed covenants and restrictions for the new properties, which would make the assertion correct that only the built lots are subject.

That's certainly a possibility. There are some developers who attach deed restrictions to individual deeds as the lots are sold and not to the development as a whole.

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