Covenants, Conditions, & Restrictions

Nevada Supreme Court Decisions

A Narrative

The Nevada Supreme Court has reviewed homeowners' CC&Rs seven times and upheld and enforced them without exception against owners with notice. Four decisions affirmed the trial court, while three reversed.

The foundation was laid in Western Land Co. v. Truskolaski, 88 Nev. 200, 495 P.2d 624 (1972), which held that covenants restricting use to single family residential purposes are enforceable (1) despite significant changes in the area outside the residential community, (2) despite changes anywhere that may render the property of greater value for other purposes, and (3) irrespective of zoning ordinances, "which cannot override privately-placed restrictions," id. at 206. The covenants will be enforced so long as they continue to remain of "substantial value" to the homeowners in the subdivision, and abandonment will not be found unless violations are so pervasive "as to frustrate the original purpose of the agreement." Id. at 207.

In Gladstone v. Gregory, 95 Nev. 474, 478, 596 P.2d 491 (1979) the court reiterated that "(c)hanged conditions sufficient to justify nonenforcement of an otherwise valid restrictive covenant must be so fundamental as to thwart the original purpose of the restriction;" and held that the burden of proof is on the party asking for nonenforcement and that "restrictive covenants may be enforced irrespective of the amount of damages which will result from a breach." Id. at 480. Community violations must be violations of the specific covenant at issue to constitute evidence underlying a finding of abandonment. Id. at 479. "Where one takes land with notice of restrictions, equity and good conscience will not permit that person to act in violation thereof, and one seeking to enjoin such a violation is entitled to relief regardless of relative damage." Id. at 480.

In Zupancic v. Sierra Vista Recreation, 97 Nev. 187, 194, 625 P.2d 1177 (1981), the court reaffirmed that "as long as the 'original purpose of the covenants can still be accomplished and substantial benefit will inure to the restricted area by their enforcement, the covenants stand even though the subject property has a greater value if used for other purposes.'" (quoting Western Land Co. v. Truskolaski, supra)

In Tompkins v. Buttrum Constr. Co., 99 Nev. 142, 659 P.2d 865 (1983), enforcement was not deterred by the fact that construction had already begun. The court reviewed the rules of interpretation:

"The rules governing the construction of covenants imposing restrictions on the use of real property are the same as those applicable to any contract, i.e., the words must be given their plain, ordinary and popular meaning."  Id. at 144.

The court confirmed that abandonment will not be found unless the violations "are so general and substantial as to constitute a waiver," that violations of covenants other than the one at issue are "irrelevant," and that the party seeking abandonment must show that the homeowners "acquiesced in substantial and general violations of the covenant within the restricted area." Id. at 145. The court further held that abandonment "'must be established by clear and unequivocal evidence of acts of a decisive nature.'" Id. (quoting Lindner v. Woytowitz, 378 A.2d 212 (Md.App. 1977).

In Leonard v. Stoebling, 102 Nev. 543, 728 P.2d 1358 (1986), the court enforced the restrictive covenants in the face of an explicit grant of a waiver by the homeowners' architectural committee. The trial court's findings that the committee adequately reviewed the evidence was held to be unsupported by substantial evidence. Again the court concluded that municipal allowances and regulations are simply not relevant. Id. at 550.

In Valley Motor v. Almberg, 106 Nev. 338, 339, 792 P.2d 1131 (1990), the court concluded that the term "trailer" in a covenant includes manufactured homes and that "restrictive covenants will be enforced as long as the original purpose of the covenants can still be accomplished and substantial benefit will inure to the restricted area." Finally, in Caughlin v. Homeowners Ass'n v. Caughlin Club, 109 Nev. 264, 849 P.2d 310 (1993), the court held that new covenants unrelated to existing covenants cannot be enforced against an owner without notice.

An eighth decision was not rendered in the context of a dispute over covenants, but in the context of eminent domain:

"It is to be remembered that there are two basic devices for urban planning and development; community zoning and restrictive covenants among private individuals. The beneficial results of private land-use controls are readily apparent throughout the country and are not merely confined to residential subdivisions. Use of restrictions are encouraged by most planning agencies. Indeed, restrictive covenants are held to be superior to zoning laws which rest on police power."
Meredith v. Washoe Co. Sch. Dist., 84 Nev. 15, 19, 435 P.2d 750 (1968).