ion at the July convention was very successful. Many association members were not present, however, and a short summary of the presentation will be helpful.

The central message of the presentation is that winning restrictive covenant fights is not easy, and almost never guaranteed. If a fight over a restrictive covenant looks like part of your business deal, you are almost always better off dropping the business deal.

Three different persons can drag you into court over a restrictive covenant problem. The developer can bring suit. The homeowner association can bring suit. Even a single lot owner can bring suit. This means that unless all three have agreed emphatically with you that it is okay to put the home in the subdivision, you are in danger of going to court. Having only two agree is a common occurrence in the Commonwealth; several deals have gone to court because the third person who can bring you into court decides to do so, even though the other two are on your side.

Once in court, the guidelines for deciding the case do not guarantee easy wins. The first thing the court will do is to look at the language to determine if it is ambiguous. If you can actually prove this, the court will refuse to enforce the covenants; that is, they will not use them against your customer. Getting an ambiguity decision from courts is not easy. There are too many ways it can go wrong. The most common is if the developer itself comes into court and testifies that while the language may be in some way ambiguous, the developer never intended for it to allow an on-frame modular, for instance, and in fact has never allowed such a home in the development. This kind of testimony frequently carries the day against you. There are several other approaches the courts can take, but none of them are as successful as the ambiguity approach. You can see how weak a position that leaves you in.

If you are confronted with a difficult covenant, do not assume, even if promised, that you will be able to change the covenant or terminate the covenants. Most covenants have preset terms of existence and cannot be changed or terminated by less than a two-thirds (2/3) vote of lot owners in the development. Frequently, the requirement is a vote of all lot owners in the development.

The following techniques will help you make careful and conservative decisions about restrictive covenant problems:

• Read them very carefully

• Read them again, very slowly

• Have a friend who does not care about your deal read them

• Get an experienced attorney. There is an amazing variation from one set of restrictive covenants to the next.

• Look for clear permission, e.g., “on-frame modulars are permitted in this development.”

• Look for clear prohibitions, e.g., “on-frame modulars are prohibited in this development.”

• Watch out for definitions in the covenants that are spelled out. Even worse, watch out for those that are assumed. You may not agree with the definitions in the restrictive covenants, but they always prevail.

• Read the entire set of covenants for any and all references to home construction review, or design or plan review.

If you think you are in a good situation, get the developer on your side and get the homeowners association on your side. If you get this far and you have a good argument, the fact that an individual homeowner decides to sue you may be worth the risk.

Beware of architectural review committees. Some covenants give these committees the power to decide on every single home coming into the development, without regard to any particular construction technique.

When confronted with a restrictive covenant problem on a particular deal, do not assume that you “should” win. Wins in these cases are exceptional and rare. The safest business approach is to assume that there are only two possible outcomes: you cannot win or you “might” win. If you think you are in a “might” win case, proceed very cautiously to decide whether the business reasons for the deal outweigh the very likely difficulties which await you before you finally have the home set, occupied and accepted by the developer, the homeowners association and the neighbors.