Oklahoma Laws

The original developer in our subdivision sold to a new developer in 2009. Our original covenant required all the homes to be at least 1800 sq/ft, three car garage and have the same style. The new developer changed the covenant to 1600 sq/ft and two car garage. This has had a significant effect on our home and the other "original" homes here. Do I have a legal leg to stand on in Oklahoma?

Thanks.

I have no idea. The smaller, less expensive and cheaper built houses are having a negitive effect on the value of my home. My home is now worth less than when I bought it. I know that has happened around the country. However, I am in the NW OKC area where, for the most part, homes prices have increased.

Did the new developer have the legit authority to change the covenants? There's is no way for us to know that.

LarryB13, I do know how he changed the covenant, he went to the county court house and changed the paperwork that is on file there. What I do not know, is did he have a legal right to do that. My stance is that I signed a contract, as did the original developer, did the new guy break the contract?

If anyone knows of an attorney in NW OKC, I am all ears.

Within the very covenant that you're referring to, UpS, should be pretty clear wording about the rights that the declarant (developer) has so long as he is "in control" and homeowners aren't.

That same document also says, most likely, when/under what circumstances control goes to the homeowners.

I'm afraid Steve's right. See if you can comprehend your covenants before you spend money on an attorney.

UpS

I agree with the others. Typically a Declarant has the rights to change Covenants and/or Bylaws. If you read what you signed for, you agree to this.

Also I have never seen Covenants that had the plans for the houses as part of them. Not saying it does not exist, but I have never seen such.

No. Once the declarant/developer has sold any lots he is bound by the terms of the covenants, including the terms regarding amendments. Traditionally amendment has required a certain percentage of property owners and is independent of the declarant's voting rights to control the association. The declarant's right to unilaterally amend are usually limited to corrections of scrivener's errors or to conform to new legal requirements.

I do not recall anyone here claiming that the OP's declaration contained the plans for the homes. Restrictions on the size of homes are commonplace and what I read was that the original declaration specified homes of a certain size and the second developer built homes that were smaller.

Thank you UpS for the update. Please keep us informed on the outcome as that can help others who may find themselves in a similar situation in the future.

Again, I would recommend if you have not already that you have a consultation with at least two or three attorneys. I had an eye opening experience when we consulted with a group … other attorneys highly recommended and they were one of most expensive in town. However, they spent 3-4 hours or more between two meetings due to the complex issue we have and did not charge for consultation. Actually I insisted on paying them a little something at the end as they were a wealth of information (and paid from my families own pocket). Imagine my surprise when they sent me a letter stating that if I desired I would have X amount of time to request a full 100% refund of any monies I paid. That ladies and gentlemen is a prime example of high morals, values, and ethics.

UpS … I am not an attorney and can only comment on experience. However, as noted per your commend above … that is the main issue we have had with our association. Developer attached a “different document” to our Property Titles completely behind our backs without our knowledge or required consent under the law. One main difference in our area is the developer engaged in similar fraudulent activity in more than one subdivision … and which some attorneys pointed out then potentially becomes “criminal racketeering”. While that statute violation between involved subdivisions has been months … we found out the statute of limitations on such violations is 10 Years.

Under CO Law the following is stated with regards to racketeering:

C.R.S. 18-17-103. Definitions:

(5) "Racketeering activity" means to commit, to attempt to commit, to conspire to commit, or to solicit, coerce, or intimidate another person to commit:

(a) Any conduct defined as "racketeering activity" under 18 U.S.C. 1961 (1) (A), (1) (B), (1) (C), and (1) (D); or

(IV) ….. , 18-5-114 (offering a false document for recording), …

C.R.S. 18-5-114. Offering a false instrument for recording

(1) A person commits offering a false instrument for recording in the first degree if, knowing that a written instrument relating to or affecting real or personal property or directly affecting contractual relationships contains a material false statement or material false information, and with intent to defraud, he presents or offers it to a public office or a public employee, with the knowledge or belief that it will be registered, filed, or recorded or become a part of the records of that public office or public employee.

And Federal Statues are possibly similar. Even the Federal Government in order to protect their interests with regards to any loans made and backed by our Federal Tax Dollars state:

§ 1924.115 Single Family Housing site evaluation.

(e) Covenants, conditions and restrictions. Sites in subdivisions shall be protected by covenants, conditions, and restrictions (CC&Rs) to preserve the character, value, and amenities of the residential community and to avoid or mitigate potential environmental impacts unless, an exception is granted by RHS after considering the suitability of local ordinances, zoning, and other land use controls.
(1) CC&Rs shall be recorded in the public land records and specifically referenced in each deed.
(2) The intent of the CC&Rs is to assure the developers that the purchasers will use the land in conformance with the planned objectives for the community. In addition, the CC&Rs should assure the purchasers that the land covered by the CC&Rs will be used as planned and that other purchasers will use and maintain the land as planned to prevent changes in the character of the neighborhood that would adversely impact values or create a nuisance.

This goes to show that the Federal Government also same as other Creditors would not want the value and marketability of their “Collateral” attached to any security agreement devalued. If our government was in the position of foreclosing on a property they would want to recoup the maximum property value attached to their security agreement and would frown on any “changes in character of the neighborhood that would adversely impact values”.

This goes to show be sure to have any attorney or yourself look “outside” any HOA statues. For example also in our subdivision the following CO statute applies and states in part:

38-35-109. Instrument may be recorded - validity of unrecorded instruments - liability for fraudulent documents

“…. Any grantee or other person purportedly benefited by a recorded document that purports to convey, encumber, create a lien against, or otherwise affect the title to real property and is forged or groundless, contains a material misstatement or false claim, or is otherwise invalid who willfully refuses to release such document of record upon request of the owner of the real property affected shall be liable to such owner …”

In our case after numerous meetings with the developer including one with 30+ witnesses from surrounding neighbors where the owners requested the “fraudulent filed” document to be removed … developer “willfully refused”. The developer also was not smart and “willfully refused” to remove fraudulent filed document via a letter from their Corporate Board of Directors.

As I stated on another posting there is potentially a Court Case regarding this home square foot issue. I do not remember what state that case was from, but I will now look (case is maybe saved on my computer backup disk). Who knows maybe this case will be from either your state or the other posters’ state. Even if not from your states, it could help determine whether the developer or other owners have the right to change documents after anyone has purchased or built meeting or exceeding any “implied or expressed warranties” or in essence the CCR’s.

I would agree with LarryB13 where he stated: “Once the declarant/developer has sold any lots he is bound by the terms of the covenants, including the terms regarding amendments.

However, I would add to that that the developer also cannot violate any State Laws which may supersede or be above and beyond the covenants.

The HOA was formed with the filing of the CC&Rs.

The corporation, known as HOA Inc., would need to be formed with the State. Some States require Associations to be incorporated, some do not. You would need to check your State statutes to see if your State has such a requirement.

Even if the Association isn't incorporated, they still have the authority (as authorized in the governing documents) to collect assessments, etc.


I doubt if this would be considered fraud. It is just the fact that the Association, at the direction of it's board of Directors (likely all voted in by the Declarant who controls the votes), chose to be self managed.