Residential Owners want to restrict Commercial Restaurant hours

Started by JanetC8 • 24 replies • 375 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

JanetC8 (Colorado)
Posts: 13

Posted:

Hi HOA talk;

My issue is I have been in business for 32 years in the same space with the same name. We served breakfast, lunch and Dinner and had the hours of 6 am to 10 pm. I sold the business and kept the real estateafter 12 years and my Tenants hours were 6 am to 2 pm for 20 years. Now the HOA, there are only 6 of us, wants to limit my hours to just 6am to 2 pm and that affects the purchase price of my real estate and the hopes of my new Tenants to serve happy hour and Dinner. The Law of Estoppel should apply to my situation as well as prescriptive right to use the Patio outside my 2 Units on the ground floor which we have done for 32 years. I have made proposals and tried Mediation and am ready to go to Court. I am looking for a law precident, if anyone is a lawyer. Thanks for your comments.

AugustinD
Posts: 3,698

Posted:

I do not know of any attorneys posting here.

I do believe that an attorney would first want to read the covenants. For starters, what do your covenants say about the HOA's power, if any, to restrict the hours of operation?

JanetC8 (Colorado)
Posts: 13

Posted:

Our Declarations do not cover hours of operation at all. There are only 8 units, I own 2 that the restuarant is in.

SheliaH (Indiana)
Posts: 6,964

Posted:

Most people on this website aren't attorneys, so it's not appropriate to provide legal advice. Especially since we don't know what your documents say and even then, whatever's true in your state may not be the same in ours,or vice versa. Spend the money and get an attorney.

It may be noise and trash is driving this request. I take it you don't live in the building and something may have changed a lot since you owned the restaurant. If you haven't already done so, talk to your neighbors about their concerns. You may want to bring the tenant with you - sometimes, people don't realize they're causing a problem and for all you know, it may be something that's easily resolved.

If the tenant hasn't paid a lot of attention to the problem, it's your responsibility as the owner landlord to fix it or at least make an effort to do so.

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

AugustinD
Posts: 3,698

Posted:

-- In my opinion, and as you may be aware, this forum can be helpful in preparing you for a meeting with an attorney, potentially saving you some hours the attorney will bill.

-- What happened in the mediation?

-- You indicate that the covenants do not give the Board the right to make rules about the hours of operation of your business. On what grounds does the Board claim it can set this limit?

JanetC8 (Colorado)
Posts: 13

Posted:

In mediation, they rejected my request to grant my historical hours of 6 am to 10 pm. They voted on a motion to approve the hours of 6 am to 2 pm. There have been no complaints and because I do not have a written approval from 32 years ago stating that the restaurant was allowed, they think I need their approval now and they can limit my hours. I sent them a rejection letter and a Certificate of Occupancy from the Town for the extensive work we did on a hood fan, sprinkling, etc. They do not have a leg to stand on so I will keep looking for precedents and go to Court. Thanks anyway.

KerryL1 (California)
Posts: 14,550

Posted:

Not lawyer either, but the business has had those hours for all those years without challenge by the rest of the Board so assuming the business complies with health & safety laws, etc., I don't see how the Assn. can force you to change your use of that condo.

Are they saying the restaurant violates your noise nuisance clauses indoor CC&Rs? What reasons are they giving to slash the value of your real estate???

What's the composition of the board? 2 residential owners & you?

JanetC8 (Colorado)
Posts: 13

Posted:

They said they were concerned about noise but I have not had a complaint. They are just passing motions without my yes vote, I have 2 votes out of 8. If I put up with it , they will continue. the real estate is between a Brewary/restaurant and a bar and on Main street. They will loose. But Thanks!

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By JanetC8 on 01/18/2022 4:50 PM
because I do not have a written approval from 32 years ago stating that the restaurant was allowed, they think I need their approval now and they can limit my hours.

For the archives, this begs a few questions:

-- Do the covenants restrict use of the units to residential only?

-- Even if the covenants do have this restriction, since the HOA looked the other way for decades, is the HOA indeed estopped from now saying, "You're really not allowed to have a restaurant. But we will let you have one going forward, because you have had one for years, except for one thing: We are setting the hours of your restaurant."

-- Oh what a tangled we weave, when first we practice to... blow off the covenants and make up stuff as we go along.

-- The seminal thread (so far) on estoppel and nonprofit corporations: https://www.hoatalk.com/Forum/tabid/55/forumid/1/tpage/1/view/Topic/postid/274860/Default.aspx .

-- Gotta get some Colorado appeals court chatter in here, though. For the archives and maybe JanetC8's first meeting with an attorney. Which is freakin' overdue, given how much money we are talking about here.

JanetC8 (Colorado)
Posts: 13

Posted:

The board is now the man who has it out for me, he owns 2 commercial and 1 residential and me and another residential owner. There are only 2 other owners

JanetC8 (Colorado)
Posts: 13

Posted:

The board is now the man who has it out for me, he owns 2 commercial and 1 residential and me and another residential owner. There are only 2 other owners

JanetC8 (Colorado)
Posts: 13

Posted:

The board is now the man who has it out for me, he owns 2 commercial and 1 residential and me and another residential owner. There are only 2 other owners

JanetC8 (Colorado)
Posts: 13

Posted:

4 residential above 4 Commercial Units and I met all of the conditions for having a restaurant 32 years ago. With Covid, both Commercial properties expanded outside more and the residential units freeked out. There is a bike/ski shop next door and they are open till 8pm. Discriminatory selictive enforcement!

But it is all contained now. I will look at your link, thank you.

JanetC8 (Colorado)
Posts: 13

Posted:

AugustinD
Posts: 3,698

Posted:

JanetC8, I am posting for the archives. To see how Colorado appeals courts think about waiver of a right, after a long course of conduct where the right was not exercised, start with googling:

"waiver" "course of conduct" site:https://law.justia.com/cases/colorado/court-of-appeals/

Not a bad introduction appears here: https://law.justia.com/cases/colorado/court-of-appeals/1985/83ca1296-0.html

An attorney is essential.

JanetC8 (Colorado)
Posts: 13

Posted:

Thank you AugustinD!!!

JanetC8 (Colorado)
Posts: 13

Posted:

Thank you AugustinD!!!

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By JanetC8 on 01/18/2022 4:11 PM
Hi HOA talk;
We served breakfast, lunch and Dinner and had the hours of 6 am to 10 pm. . . . my Tenants hours were 6 am to 2 pm for 20 years. Now the HOA, there are only 6 of us, wants to limit my hours to just 6am to 2 pm and that affects the purchase price of my real estate and the hopes of my new Tenants to serve happy hour and Dinner. . . . to use the Patio outside my 2 Units on the ground floor which we have done for 32 years.

JanetC8 : 1 - Respectfully for your business asset you would be wise to retain a competent insured attorney licensed under Colorado law.

2 - Perhaps you could also ask her ( him ) if it would be well served to pursue an OPPRESSION remedy from the alternate universe of corporation law.

That's along with any denials of due process within Colorado statute & jurisprudence as to whatever the covenants on title to your mixed use commercial site.

My jurisdiction imported an OPPRESSION remedy into its condominium law in 1998. It's a tough remedy to get accepted by judges.

Before I supply 3 examples where it was sought by a commercial minority within the context of some sorta shared ownership community, just let me say my own jurisdiction is foreign but not the boonies, and it followed the evolution of condo law concurrently with many U.S. states.

3 - Oppression remedy DENIED to several sets of minority commercial owners :

“CHEUNG v Y.R.C.C. # 759 PARKING ALLOCATION by-law HELD NOT OPPRESSIVE at Richmond Hill eatery” ( decision later upheld on appeal )
https://ontario.cafcor.org/index.php?option=com_fireboard&Itemid=46&func=view&id=18746&catid=9#18746

“RULED NOT OPPRESSION : Strata's QUICKY bylaw change pre-empted POT FARM - Kunzler v SP EPS 1433” ( 2020 )
https://ontario.cafcor.org/index.php?option=com_fireboard&Itemid=46&func=view&id=19076&catid=11#19076

Oppression Remedy granted to minority investors ( nursing home ) :

“SELECTIVE ENFORCEMENT held OPPRESSION : McCarthy Place retirement condos (Stratford)” ( 2019 ) ( decision later upheld on appeal )
https://ontario.cafcor.org/index.php?option=com_fireboard&Itemid=46&func=view&id=19120&catid=9#19120

4 - No it's NOT Colorado, but it IS a widely available commercial corporate law remedy that MIGHT be worth your attorney's checking . . . ( & of course is not legal advice ).

LetA (Nevada)
Posts: 2,679

Posted:

You have to look at the bigger picture! Why do they, he wants you out? Is there a developer or a Mr Slugworth influencing someone? My second question, why is the HOA interfering
in the private affairs of a private business. Unless your governing documents state otherwise, you should be free to run your business as you see fit.

JanetC8 (Colorado)
Posts: 13

Posted:

Thank you Bob;

I appreciate the help and will look into Oppression, concepts from the alternate universe are always good for my grey matter. I have a young competent Colorado lawyer but want to educate myself because I know the history and it gets expensive and I think I have some insight to offer.

I will stay in touch, thank you.

JanetC8 (Colorado)
Posts: 13

Posted:

Hi LetA;

I have been wrangling with this guy forever. I see the big picture and the sad fact is there are some people in this world that just want to win even if it is at there own expense, which is this case. He is not a good person, abusive, and definitely does not like strong women.

The HOA is scared of change and somehow think if we do dinner, it will affect them negatively. I do not think they can assert this authority, that is why we will go to court! We definately pay our fair share of water, sewer, trash, overages so I don't know why they are having a problem. People like control!

Thank you!

BobD4 (up north)
Posts: 1,002

Posted:

Quote:

Posted By JanetC8 on 01/19/2022 2:38 PM
Hi LetA;

I have been wrangling with this guy forever. . . . The HOA is scared of change and somehow think if we do dinner, it will affect them negatively. I do not think they can assert this authority, that is why we will go to court ! We definately pay our fair share of water, sewer, trash, overages so I don't know why they are having a problem. People like control !"

Separate from whether JanetC8's governance body has ANY legal right at all to dictate hours / type of goods or services sold etc, it might be interesting for her strategy to revisit several things :

what objections might or might not have been SPECIFICALLY brought forward to her by stakeholders other than the owner described above ?

If there is some sorta "retail mix" mechanism at play, have any others raised concerns - including competitive - about nightime dining ?

Or sidewalk congestion ?

Or afternoon /nighttime parking issues ? Or entertainment noise ? or food odours & restaurant waste handling ? etc . . .

Of course in her scenario there are 4 each of upperfloor residential & streetlevel commercial units. But if I were a minority commercial owner lacking some sorta teflon - sweetheart protection left by the developer, I might have to worry about some of the pressures by the dominant majority.

eg recently at one mixed use condo community the commercial /industrial unit owners rejected amendment to permit a sale to veterinary clinic ( litigated ) : welding / bodywork / light industrial nuisances OK

but NOT pooches & owners ?

Anyway there may be shortage of minority litigation particularly after other owners have built up critical mass and eg now object to patio rollouts onto city sidewalks . Or sidewalk signage . . .

BobD4 (up north)
Posts: 1,002

Posted:

erratum : meant " . . . Anyway there may be NO shortage of minority litigation .."

AugustinD
Posts: 3,698

Posted:

Quote:

Posted By LetA on 01/19/2022 2:06 PM
You have to look at the bigger picture! Why do they, he wants you out? Is there a developer or a Mr Slugworth influencing someone? My second question, why is the HOA interfering
in the private affairs of a private business. Unless your governing documents state otherwise, you should be free to run your business as you see fit.

This does beg the question of whether what the HOA/COA is doing here is tortious interference with a contract (or prospective contract) or business. The contract here being the lease between the owner and her tenants.

Some chatter from a Colorado law firm on these points, as they pertain to Colorado law, appears here: https://5280.attorney/colorado-business-litigation/interference-with-contract/

More Colorado case law on course of conduct possibly waiving the right of the HOA/COA to do xyz (as cited in the link I posted earlier):

https://law.justia.com/cases/colorado/court-of-appeals/1979/78-576.html

https://law.justia.com/cases/colorado/court-of-appeals/1977/76-563.html

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Janet

Time to lawyer up and take them on.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here