In a decision issued today (April 5, 2022), the North Carolina Court of Appeals makes potentially significant changes to how amendments to declarations are adopted. As a result, associations considering declaration amendments should consult their attorney to make certain the process meets the new standards for adoption.
Bryan v. Kittinger is a “published opinion,” which means the decision is controlling legal authority and can be cited in other cases. Interestingly, though the opinion impacts associations, there is no association involved as a named party in the case. Instead, this dispute is between two lot owners in the Sleepy Hollow Subdivision (FYI, it does not appear any association exists under facts) as to whether chickens on a lot violate the protective covenants’ restrictions on animals other than “household pets.”
Much of the opinion focuses on chickens and what is “poultry” versus a “household pet.” Citing the Steiner v. Windrow Estates Home Owners Association case from 2011 (in which Nigerian dwarf goats were determined to be household pets), the Court states that without clear language in a declaration as to what animals are prohibited, “virtually any animal . . . may be treated as a ‘household pet’ to be kept on the homeowner’s property[.]” And “household pets” can include outdoor animals kept in the yard. Without more, the decision would simply be a fight between two owners about chickens.
The latter part of the decision expands its significance beyond these two lot owners to homeowners associations generally, as the Court discusses whether the declaration amendment was properly adopted. After analysis, the Court determines the amendment was not proper in that the “written agreements” approving the amendment did not include all property owners on the deed to each lot.
By way of background, the Planned Community Act provides that as to all planned communities (HOAs), whenever created:
Except in cases of amendments that may be executed by a declarant . . ., the declaration may be amended only by affirmative vote or written agreement signed by lot owners of lots to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies or by the declarant if necessary for the exercise of any development right.NCGS § 47F-2-117.
Similarly, the NC Condominium Act provides that as to condominiums created on or after October 1, 1986:
Except in cases of amendments that may be executed by a declarant . . . , the declaration may be amended only by affirmative vote of or a written agreement signed by, unit owners of units to which at least sixty-seven percent (67%) of the votes in the association are allocated or any larger majority the declaration specifies.NCGS § 47C-2-117.
The Court first discusses the differences between declaration amendments adopted by “affirmative vote” and those adopted by “written agreement.” Without getting even further into the weeds, the Court then notes that “when an amendment is sought by vote at a duly-called meeting, one spouse may bind the other where the other chooses not to attend.” However, that is not the case with amendments approved through the process of “written agreement.” Instead, the Court holds for the first time that “since a restrictive covenant is an encumbrance/interest on real estate” and subject to the NC Statute of Frauds, “there is nothing in the Planned Community Act that allows one owner to bind his co-owners outside of a vote taken at a duly-called meeting.” As a result, “written agreements” without the approval of all owners to that lot would not be considered approval. Of note, the Court did not declare the declaration amendment invalid, as it did not have enough information about how the amendment was adopted. “It may be that the covenant was voted on at a meeting.” As a result, the matter was remanded to the trial court for further action.
Appellate cases are detailed and fact specific. However, here are some immediate takeaways:
- Animals. Language that restricts or prohibits animals in associations must be clear and unambiguous. Vague provisions prohibiting animals other than “household pets” will likely lead to most any kind of animal being allowed as a household pet.
- Declaration Amendments. For years community association attorneys have treated the “affirmative vote” and “written agreement” approval process fairly similarly. Owner consent was required, but not every owners’ consent. After all, the written agreement method was just an extension of votes at meetings, where all owners were not required. With this new decision, if the approval is through the written agreement process, all owners should consent for the approval to be binding on a lot.
So what does this mean for future declaration amendments: unless this decision is changed by the Court of Appeals or the Supreme Court upon discretionary review or the statute is changed by the General Assembly, any future efforts to amend a declaration should follow the opinion of the Court. Either a proposed amendment should be adopted at a meeting (in which case only one owner need consent) or the written agreement process should be followed by obtaining the consent of all owners to any lot. There is also the possibility that the amendment could be adopted through the provisions of the NC Nonprofit Corporation Act, which allows “member action by written ballot or electronic voting without a meeting.” Again, consult an attorney with specific questions.
So what does this decision mean for past adopted declaration amendments: possibly nothing. Any past amendments may have received the necessary vote through written agreements signed by all owners to the lot. Also, the NC Planned Community Act has the following language: “No action to challenge the validity of an amendment adopted pursuant to this section may be brought more than one year after the amendment is recorded.” (And the NC Condominium Act has almost identical language.) Again, talk to an attorney.
With any appellate decision, it’s always best to read the actual case if you want to know how it might impact a specific association. And then talk to an attorney about your specific facts. The Bryan v. Kittinger decision can be found here: https://appellate.nccourts.org/opinions/?c=2&pdf=40721.
For any HOA/condo meeting questions in North or South Carolina, contact one of the community association attorneys at any of Law Firm Carolinas’ offices.