Void/Voidable & Promissory Estoppel

CoriS1 (Texas)
Posts: 19

Posted:

This may be too legal for here, but I hope some of you have some insight.

If 2 Officers of a POA made some changes to the CCRs, without membership approval, "a period of successive TEN YEAR periods" to "periods of successive TEN YEAR periods" does this make those covenants VOID or VOIDABLE. If it is "VOID" it is not subject to the 4-year statute of limitations. If it is "voidable" it is.

No one disputed these changes for SIX YEARS. The POA operated and owners abided by these covenants. They received yearly assessments and PAID them and the Board managed the corporation.

Does Promissory or Quasi Estoppel factor in?

There is a faction claiming we have no convents and nothing is enforceable.

Yet, the Association is still a non-profit corp. We have Bylaws, but the faction says it is worthless without CCRS.

We have conflicting opinions from attorneys. It is unlikely we would ever get anything new passed.

Any thoughts?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By CoriS1 on 07/21/2016 7:28 PM
This may be too legal for here, but I hope some of you have some insight.

If 2 Officers of a POA made some changes to the CCRs, without membership approval, "a period of successive TEN YEAR periods" to "periods of successive TEN YEAR periods" does this make those covenants VOID or VOIDABLE. If it is "VOID" it is not subject to the 4-year statute of limitations. If it is "voidable" it is.

No one disputed these changes for SIX YEARS. The POA operated and owners abided by these covenants. They received yearly assessments and PAID them and the Board managed the corporation.

Does Promissory or Quasi Estoppel factor in?

There is a faction claiming we have no convents and nothing is enforceable.

Yet, the Association is still a non-profit corp. We have Bylaws, but the faction says it is worthless without CCRS.

We have conflicting opinions from attorneys. It is unlikely we would ever get anything new passed.

Any thoughts?

1. Is the changing of the "ten year" clause" the only change they made? Or are there other more substantial changes?

Sikubali jukumu. Read all posts at your own risk.

CoriS1 (Texas)
Posts: 19

Posted:

The only change.

NpS (Pennsylvania)
Posts: 4,216

Posted:

If that's the only change, IMO it's a non-issue.

They made a grammatical change, but they did not make a substantive change. The meaning is exactly the same. The change has no legal effect. The docs would be interpreted exactly the same under either version.

Some thoughts:

1. See if your state laws or your docs have a clause that says that change not challenged for a year stands. (Shorter than the 4 yr SOL)

2. Take a vote and reinstate the original docs.

3. Take a vote and validate the change.

4. In answer to your question, the change and only the change is voidable - and that is subject to the 4 yr SOL.

5. Tell the noisy folks to stop wasting everyone's time over nonsense.

6. Don't hire the lawyers who say that this insignificant change has any effect on the validity of your CCRs.

Sikubali jukumu. Read all posts at your own risk.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Cori,

I believe this may fall under the heading of "Scrivner's Errors." They merely replaced bad grammar with better grammar. I see nothing that would effect anyone's property rights. The general rule seems to be that such changes may be made without involvement of the owners. There may even be a specific provision in your CC&R's allowing the board to make such changes.

From US Legal:

"Doctrine of Scrivener's error is a legal principle which permits a typographical error in a written contract to be corrected by parol evidence if the evidence is clear, convincing, and precise. However if such correction affects property rights then it must be approved by those affected by it. Scrivener's error is an error due to a minor mistake or inadvertence and not one that occurs from judicial reasoning or determination."

Source: http://definitions.uslegal.com/d/doctrine-of-scriveners-error/

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By CoriS1 on 07/21/2016 7:28 PM

If 2 Officers of a POA made some changes to the CCRs, without membership approval, "a period of successive TEN YEAR periods" to "periods of successive TEN YEAR periods" does this make those covenants VOID or VOIDABLE. If it is "VOID" it is not subject to the 4-year statute of limitations. If it is "voidable" it is. . . . Does Promissory or Quasi Estoppel factor in ? Any thoughts ?

CoriS1 Tx
1 - Without reviewing the full text of the document or its relevant section, I think precision is not possible.

However the adjective "successive" suggests to me that there would be no bottom-line difference between singular "a period" and plural "periods" if whatever ensues is continuous where successfully prolonged . . .

I presume these target either default extensions or automatic expiries unless properly prolonged or extended.

If a provision is VOID, are timeliness deadlines germane at all ? But whichever, wouldn't the timeliness calculation start with date of statutory 'discovery' by those raising a challenge.

2- Sorry I don't immediately see how estoppelling would necessarily apply AGAINST the victims of a mis-statement or omission, if that is the intent. Others maybe can help.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Has anyone gone to the courthouse to get an actual copy of the CC&R's? That would be the first thing to end the debate. By-laws are NOT the same as CC&R's and can be changed more fluid. They don't always require a membership vote like the CC&R's and Articles of Incorporation require.

Plus part of the process to have the rule changes made is having a document signed by the agreeable membership. It has to be handed in when filing. So find it hard to believe the change is official. It's NOT a change till you see it in writing on the FILED documentation.

Former HOA President

CoriS1 (Texas)
Posts: 19

Posted:

We have all the docs and they were properly filed (without membership vote). A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void). Yet this same owner paid his dues EVERY year! And the Assoccation has operated under those covenants without incident until these folks are telling people they do not have to pay their dues because we have no covenants!

CoriS1 (Texas)
Posts: 19

Posted:

Thank you. That's what I've been saying. I am new and not involved in these disputes. But it looks like they are just looking for any excuse to avoid dues.

CoriS1 (Texas)
Posts: 19

Posted:

Thank you... I agree... We are gearing up for annual meeting and I am getting ready to prepare a "white paper" in hopes of putting this to rest.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I think the termfor the cc&r being void is taken out of context. The didputed involved an ACC issue. That is different situation than dues requirements. Void and no contract to me indicates that there was a third party situation going on. Which the HOA may have been? It is like the HOA trying to evict a renter. The HOA had no such power or contract to do so. They are a third party to the rental so the rules can not be applied.

Former HOA President

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By CoriS1 on 07/22/2016 3:19 PM
We have all the docs and they were properly filed (without membership vote). A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void). Yet this same owner paid his dues EVERY year! And the Assoccation has operated under those covenants without incident until these folks are telling people they do not have to pay their dues because we have no covenants!

CoriS1 Tx

1 - So a Texas court has ruled that the full covenants are now void. Were the grounds failure to extend, at least in the case of the dissenting owner. Or did it rule that merely the specific property has escaped ? Or that only the ARC protocols are unsupported against their property at least ?

However much an owner/stakeholder vote could be ignored, I respectfully have trouble believing that the crucial determinant for that decision was what may have been the subtle wording change attributed to the 2 Board members.

Any overall attempt to co-mingle 'timeliness' & 'conduct of parties' etc with what is a centrally a title registration / validity of jurisdiction / adequately running with title issue, looks at least of limited value. Those legal tools respectfully may have a limited application to title issues, as opposed to civil claims /tort claims etc between adversarial parties. eg too late to sue for a property damage claim . . . 'You were friendly to me even though you were not yet aware of the damage nor who caused it; so now I have a right to claim you had acquiesced in it and forgiven me . ."

What were the procedural deadlines within the CCRs ? Did a legal professional miss them ?

2 - Further, whatever the judicial ruling turned on, if the covenants are now void & no longer 'running with title', such payments would be consistent with not yet discovered / non discoverability. Even if 'already discovered' they would also be consistent with voluntary ex gratia contribution or compensation for some sort of unpaid, otherwise unjust enrichment.

Merely paying fees doesn't itself usually skate onside defective or illegal conduct. Such otherwise would open the door wider to law-breaking.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By MelissaP1 on 07/22/2016 3:43 PM
I think the termfor the cc&r being void is taken out of context. The didputed involved an ACC issue. That is different situation than dues requirements. Void and no contract to me indicates that there was a third party situation going on. Which the HOA may have been? It is like the HOA trying to evict a renter. The HOA had no such power or contract to do so. They are a third party to the rental so the rules can not be applied.

1. By definition - Void means "no good" from the get-go. Voidable means "can be stricken". 3rd party has absolutely nothing to do with the void/voidable question that the OP posed.

2. OP said nothing about ACC. The OP's dispute is NOT over ACCs. The OP's dispute IS over CC&Rs.

3. OP said nothing about "no contract."

4. OP said nothing about evicting a renter.

5. Ah, but if you add an IMAGINARY rental agreement - and if you want to talk about ACCs instead of CCRs - and if you want to come up with a definition of the word "void" from thin air - and if you want to bypass the OP's question entirely - then I can certainly see where one might find offense with what I posted previously.

Sikubali jukumu. Read all posts at your own risk.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By CoriS1 on 07/22/2016 3:19 PM
A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void).

What is your source for this information about what the judge said? I am bothered by your statement, "allegedly the CCRs were void." It sounds like you are speculating as to the court's reasoning. Most published opinions require no speculation because the court will go on for all eternity to justify its ruling.

CoriS1 (Texas)
Posts: 19

Posted:

Quote:

Posted By LarryB13 on 07/23/2016 10:19 AM

Posted By CoriS1 on 07/22/2016 3:19 PM
A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void).

What is your source for this information about what the judge said? I am bothered by your statement, "allegedly the CCRs were void." It sounds like you are speculating as to the court's reasoning. Most published opinions require no speculation because the court will go on for all eternity to justify its ruling.

That's all the final judgment said. One of the defendant's cause of actions was that the CCRs were void. There was no "published opinion" and no other documentation. It is our thoughts that the ruling has no bearing on the status of the covenants. But we are dealing with a handful of owners trying to bust the association and corporation and they are using this case as their "evidence." They also claim they have opinions of "4 judges" but we have yet to see anything in writing. We do not have money to hire a legal team. We are small community trying to stay afloat. It is our belief that, as stated by others, that the minor change in the filed documents, no way makes them void. And any voidable arguments long passed the statutory limitations.

We are relying on the written opinions of our counsel at the time. The information provided in this forum has been very helpful.

CoriS1 (Texas)
Posts: 19

Posted:

Quote:

Posted By NpS on 07/23/2016 8:11 AM

Posted By MelissaP1 on 07/22/2016 3:43 PM
I think the termfor the cc&r being void is taken out of context. The didputed involved an ACC issue. That is different situation than dues requirements. Void and no contract to me indicates that there was a third party situation going on. Which the HOA may have been? It is like the HOA trying to evict a renter. The HOA had no such power or contract to do so. They are a third party to the rental so the rules can not be applied.

1. By definition - Void means "no good" from the get-go. Voidable means "can be stricken". 3rd party has absolutely nothing to do with the void/voidable question that the OP posed.

2. OP said nothing about ACC. The OP's dispute is NOT over ACCs. The OP's dispute IS over CC&Rs.

3. OP said nothing about "no contract."

4. OP said nothing about evicting a renter.

5. Ah, but if you add an IMAGINARY rental agreement - and if you want to talk about ACCs instead of CCRs - and if you want to come up with a definition of the word "void" from thin air - and if you want to bypass the OP's question entirely - then I can certainly see where one might find offense with what I posted previously.

Please forgive my ignorance, but what does OP and ACC mean?

CoriS1 (Texas)
Posts: 19

Posted:

Quote:

Posted By BobD4 on 07/23/2016 8:00 AM

Posted By CoriS1 on 07/22/2016 3:19 PM
We have all the docs and they were properly filed (without membership vote). A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void). Yet this same owner paid his dues EVERY year! And the Assoccation has operated under those covenants without incident until these folks are telling people they do not have to pay their dues because we have no covenants!

CoriS1 Tx

1 - So a Texas court has ruled that the full covenants are now void. Were the grounds failure to extend, at least in the case of the dissenting owner. Or did it rule that merely the specific property has escaped ? Or that only the ARC protocols are unsupported against their property at least ?

No court has ever ruled the covenants are void or expired. The judge in the instant case merely said that owner did not have a contract, but we have no way to know why or to what the judge was referring. There were many different arguments in the pleadings. What are ARC protocols?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By CoriS1 on 07/23/2016 5:04 PM
what does OP and ACC mean?

Original Poster
Architectural Control Committee

Sikubali jukumu. Read all posts at your own risk.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By CoriS1 on 07/23/2016 5:07 PM

Posted By BobD4 on 07/23/2016 8:00 AM

Posted By CoriS1 on 07/22/2016 3:19 PM
We have all the docs and they were properly filed (without membership vote). A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void). Yet this same owner paid his dues EVERY year! And the Assoccation has operated under those covenants without incident until these folks are telling people they do not have to pay their dues because we have no covenants!

CoriS1 Tx

1 - So a Texas court has ruled that the full covenants are now void. Were the grounds failure to extend, at least in the case of the dissenting owner. Or did it rule that merely the specific property has escaped ? Or that only the ARC protocols are unsupported against their property at least ?

No court has ever ruled the covenants are void or expired. The judge in the instant case merely said that owner did not have a contract, but we have no way to know why or to what the judge was referring. There were many different arguments in the pleadings. What are ARC protocols?

As I interpret what's being said, it's not unlikely that a judge, who was only looking at the suit that the association brought against a particular homeowner, decided in favor of the homeowner. While there may not have been a full-blown opinion, I am sure that the judge wrote a footnoted paragraph in the court order he issued. Highly unlikely that there wasn't a paragraph like that.

It would be helpful Cori if you quoted exactly what the judge wrote.

ARC is Architectural Review Committee - just another variant of ACC.

Sikubali jukumu. Read all posts at your own risk.

CoriS1 (Texas)
Posts: 19

Posted:

Quote:

Posted By NpS on 07/23/2016 5:29 PM

Posted By CoriS1 on 07/23/2016 5:07 PM

Posted By BobD4 on 07/23/2016 8:00 AM

Posted By CoriS1 on 07/22/2016 3:19 PM

As I interpret what's being said, it's not unlikely that a judge, who was only looking at the suit that the association brought against a particular homeowner, decided in favor of the homeowner. While there may not have been a full-blown opinion, I am sure that the judge wrote a footnoted paragraph in the court order he issued. Highly unlikely that there wasn't a paragraph like that.

It would be helpful Cori if you quoted exactly what the judge wrote.

ARC is Architectural Review Committee - just another variant of ACC.

"IT IS FOUND THAT no contractual agreement exists between the Plaintiff and the Defendants.
IT IS THEREFORE ORDERED that Plaintiff . . . take nothing against Defendants . . . that all claims asserted by Plaintiff are denied, and all costs of court be taxed against Plaintiff."

NpS (Pennsylvania)
Posts: 4,216

Posted:

What were the claims against the homeowner? How many dollars were involved?

Sikubali jukumu. Read all posts at your own risk.

CoriS1 (Texas)
Posts: 19

Posted:

Quote:

Posted By NpS on 07/23/2016 7:30 PM
What were the claims against the homeowner? How many dollars were involved?

The Board sue this owner due to an "architectural" issue. No dues involved. Not sure of the amount. POA lost case.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By CoriS1 on 07/25/2016 10:44 AM

Posted By NpS on 07/23/2016 7:30 PM
What were the claims against the homeowner? How many dollars were involved?

The Board sue this owner due to an "architectural" issue. No dues involved. Not sure of the amount. POA lost case.

Courts will typically favor the HOA when it comes to paying dues. But judges sometimes have a very different attitude about compliance with architectural rules. Many judges don't really understand HOA law. And judges sometimes make rulings that are a lot more expansive than the issue being decided.

IMO, what the judge did makes things complicated. And if the board didn't appeal that decision, then you're stuck with a confusing ruling.

Is there no contractual relationship at all?
- That IMO would be an impractical reading of the judge's order. Just because the HOA lost an architectural dispute with one owner, that doesn't mean that there is no contractual relationship at all with any of the owners. I would seriously question any attempt to apply a ruling about one architectural dispute to every part of the owner-HOA relationship.

A better interpretation of the judge's order might be that the judge found that the owner had no contractual obligation re the architectural issue that was disputed. At least that would make more sense.

My best suggestion to you would be to get a better understanding of the answers to the following questions:

1. Could it be that the architectural restriction that the POA tried to impose exceeded what was allowed in your CC&Rs?

2. Could it be that the POA demanded that something be removed (an addition, a shed, or something like that) and the judge decided that was not allowed under your CC&Rs?

I could add more questions, but I hope you got the gist of what I'm suggesting. Look into the details. Find out exactly what attempt by your POA got shot down. Then try to make sense out of that difficult to understand ruling.

Sikubali jukumu. Read all posts at your own risk.

DanaT (Tennessee)
Posts: 214

Posted:

Quote:

Posted By CoriS1 on 07/22/2016 3:19 PM
We have all the docs and they were properly filed (without membership vote). A former Board sued a homeowner for architectural violations and the judge said the owner did not have a contract with the Association (allegedly the CCRs were void). Yet this same owner paid his dues EVERY year! And the Assoccation has operated under those covenants without incident until these folks are telling people they do not have to pay their dues because we have no covenants!

If the CCRs are void, then they do not exist. CCRs are State Sanctioned Contracts, between Associations and Owners. Nothing more, nothing less. No one would enjoy being held to a contract that was illegal, to begin with. I am in no way stating that the situation is messed up, only that if it is not proper to begin with, it will be just about impossible to enforce, when the time comes.

Another thing to remember is, just because it is written into a contract, does not make it binding, if done improperly. Most contracts will state that if one part is found to be unenforceable, it will not effect the rest of the contract, that is enforceable.

NpS (Pennsylvania)
Posts: 4,216

Posted:

Quote:

Posted By DanaT on 07/25/2016 1:25 PM
just because it is written into a contract, does not make it binding, if done improperly. Most contracts will state that if one part is found to be unenforceable, it will not effect the rest of the contract, that is enforceable.

Good point.

Sikubali jukumu. Read all posts at your own risk.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By CoriS1 on 07/23/2016 5:07 PM

Posted By BobD4 on 07/23/2016 8:00 AM

Posted By CoriS1 on 07/22/2016 3:19 PM
No court has ever ruled the covenants are void or expired. The judge in the instant case merely said that owner did not have a contract, but we have no way to know why or to what the judge was referring. There were many different arguments in the pleadings. What are ARC protocols?

This comment is what concerns me. If this was supposedly an ACC issue and the Owner did not have a contract ... that potentially would be CCR's. My recommendation would be for you to go to your local County Records and look at both your personal property (to see what is attached such as CCR's) and also look at this other person's property title to also see what was attached. If as noted you are a very small HOA ... possibly you may have had a small time developer who made mistakes in attaching CCR's to property titles.