Five Factors a Court Will Likely Consider to Determine Validity and Enforceability of Amendments Recorded by Developers

Steve Black

The 2006 Court of Appeals case of Queens Grant II Horizontal Property Regime vs. Greenwood Development Corporation (368 S.C. 342) provides guidance for validity of amendments to the Declaration/Master Deed (Declaration) recorded by Developers/Declarants (Developer).

In this case the homeowner’s association sued the Developer over the validity of an amendment it recorded to the Declaration that increased assessments. The Court upheld the amendment (except for a few units that had a special arrangement that are not relevant to this blog).  The Court used the following general analysis to determine the validity of this amendment recorded by the Declarant: 

  1. There must be unambiguous language in the Declaration authorizing amendments. It is important that Developer’s right to amend is explicitly stated in the original Declaration.
  2. Sufficient property interest. It is important that the Developer possess a substantial property interest in the bound property when amending the Declaration.
  3. Strict compliance with amendment procedure. The procedures outlined in the Declaration for amending must be strictly followed. 
  4. Notice in accordance with the law.  There must be notice of the amended covenants, ensuring transparency and fairness.
  5. Avoid unreasonable amendments.  The Court will strongly scrutinize amended covenants stressing the importance of reasonableness and consistency with public policy, and will apply general principles of “equity” or “fairness” when considering the enforceability of amendments.

Please contact an attorney at Law Firm Carolinas if you have any questions regarding amendments recorded by a Declarant or for other amendment related questions pertaining to your homeowner’s or condominium association.

HOA & Condo Associations Real Estate