Maarten Kalway v. Calabria Ranch HOA, Inc., et al.

Tucson, Arizona real property condo law lawyers represented the Plaintiff and Defendant in a dispute over the amendments of condo association's covenants, conditions and restrictions.



In this case, we are asked to decide the extent to which a

homeowners' association ("HOA”) may rely on a general-amendment-

power provision in its covenants, conditions, and restrictions ("CC&Rs”) to

place restrictions on landowners' use of their land. Although CC&Rs are

generally enforced as written, we interpret such restrictions to reflect the

reasonable expectations of the affected homeowners. Construing such

provisions narrowly, as with any restrictive covenant on real property, we

hold that a general-amendment-power provision may be used to amend

only those restrictions for which the HOA's original declaration has

provided sufficient.



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¶10 Arizona law permits the amendment of CC&Rs by a majority

vote if such voting scheme is specified in the original declaration. A.R.S.

§ 33-1817(A). But § 33-1817(A) does not displace the common law, which

prohibits some amendments even if passed by a majority vote. The original

declaration must give sufficient notice of the possibility of a future

amendment; that is, amendments must be reasonable and foreseeable. See

Dreamland, 224 Ariz. at 51 ¶ 38; see also Shamrock v. Wagon Wheel Park

Homeowners Ass'n, 206 Ariz. 42, 45–46 ¶ 14 (App. 2003); Wilson v. Playa de

Serrano, 211 Ariz. 511, 513 ¶ 7 (App. 2005).



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¶15 The notice requirement relies on a homeowner's reasonable

expectations based on the declaration in effect at the time of purchase—in

this case, the original declaration. Under general contract law principles, a

majority could impose any new restrictions on the minority because the

original declaration provided for amendments by majority vote. But

allowing substantial, unforeseen, and unlimited amendments would alter

the nature of the covenants to which the homeowners originally agreed. See

Dreamland, 224 Ariz. at 51 ¶ 38. Thus, "[t]he law will not subject a minority

of landowners to unlimited and unexpected restrictions on the use of their

land merely because the covenant agreement permitted a majority to make

changes to existing covenants.” Boyles v. Hausmann, 517 N.W.2d 610, 617

(Neb. 1994).

We reverse the trial court in part and remand for entry of

summary judgment in part for Kalway and in part for Calabria Ranch. We

vacate the court of appeals’ decision and award attorney fees to Kalway in

this Court and in the court of appeals