The Supreme Court of Missouri ruled earlier this month that a homeowners association may add new restrictive regulations without the unanimous consent of its members in a far-reaching decision that protects the existing rights of homeowners from unwanted new development and reverses 81 years of legal precedent. The case involved the Trustees of Clayton Terrace, a subdivision in Frontenac, and a developer that sought to subdivide an existing lot to build two homes against the Trustees’ and most residents’ wishes. Gerard Carmody and Todd Hamby, Principals at Carmody MacDonald P.C., successfully represented the subdivision in the Supreme Court of Missouri.
In 1938, the Supreme Court of Missouri ruled that subdivisions could not add new ‘burdens’ (restrictions on use) without the ‘unanimous consent’ of all lot owners. The Trustees of Clayton Terrace had earlier added a ‘one residence per lot’ rule to their indentures with the support of two-thirds of the owners which was all that was required by the terms of the indentures. The developer cited the 1938 ruling in an attempt to negate the ‘one residence per lot’ restriction. After the developer gained Frontenac’s approval to subdivide the lot, the Trustees of Clayton Terrace sued to protect the character of their subdivision and the case wound its way through Missouri’s courts.
Carmody, Hamby and their team at Carmody MacDonald challenged the reasoning behind the unanimous consent requirement as being suspect and at odds with general principles of contract law. In particular, they argued that the unanimous consent requirement makes it virtually impossible to amend subdivision restrictions. The Supreme Court of Missouri agreed and held that prior cases requiring unanimous consent to amend restrictions were decided in error.
“This decision will have a significant impact on the future ability of homeowners associations, their resident leadership and property managers to protect the original character of subdivisions, condominiums and residential communities across the state,” Carmody said.
“Missouri law now permits a reasonable and ordinary reading of the association’s restrictions and will allow communities to amend their rules without requiring the unanimous consent of all property owners,” said Roger Kinney, President of Smith Management Group, a leading management provider for condominium, villa and homeowner associations in the St. Louis area. “This is a much more practical and democratic way for property owners to protect their investments and enjoy their lifestyles.”
In addition to Carmody and Hamby, the Carmody MacDonald real estate litigation team representing the Trustees of Clayton Terrace included Becky Eggmann, Ryan Prsha and Stephen Davis. Hamby and Stephen Davis provide a wide range of legal services to homeowners and condominium associations and represent more than 170 residential communities.
Carmody MacDonald is a St. Louis-based law firm focused on establishing close relationships with clients, serving as valued counselors and providing exceptional service. The firm’s size provides clients with a unique advantage by offering the value of a mid-sized firm but the depth of offerings of a larger firm. For more information, visit www.carmodymacdonald.com.