Brief Fact Summary.
The Colorado Supreme Court ruled that an obligation of a restrictive covenant may be changed and be enforced as modified so long as the covenant is clear and reasonable.
Synopsis of Rule of Law.
The obligations of a covenant can be changed and enforced as modified so long as the covenant is clear and reasonable.
There are 63 lots of land and a park in Evergreen Highlands Association (Defendant). The park itself contained a large array of activities including hiking, equestrian trails, fishing, and places to play sports. The park was protected by protective covenants however the members of the association were never responsible for paying any membership fees or dues. There is a provision in the covenant that allows for modification of the covenant so long as a majority of 75 percent of homeowners approve the modification. Eventually, the association successfully attempted to modify the covenant by asking members to pay a $50 annual due and failure to do so would result in a lien on the respective homeowner’s property. One member of the association West (Plaintiff) refused to pay the dues and a lien was placed on his property. Ultimately, Plaintiff filed suit arguing against the amendment to the protective covenant. The trial court allowed the amendment but on appeal it was reversed citing the specific language of “change or modify” within the covenant. Defendant appeals.
Whether new obligations can be imposed from a modification of a restrictive covenant?
Yes. The Court deems that so long as the covenant is clear and reasonable in its effort to include a provision in which it is allowed to change or modify the covenant, then the change is allowed. The court abandons the appellate court’s reasoning behind the specific language in which they argued the language of “change or modify” means they can only change existing obligations and not create new obligations. Instead the Court allows the addition of new obligations. Court of appeals is reversed and remanded.
The court notes the language of “change and modify” in clear and reasonable in the circumstances to allow a change in the covenant.