Posted by: Patricia Salkin | June 4, 2012

AZ Appeals Court Enforces Restrictive Covenant and Orders Demolition of Second-Story to Single Family Home

James and Theresa Price purchased a lot and one-story home in La Maza Villa, Arizona, that was subject to a deed restriction which forbade construction of any structure “other than one detached single-family dwelling not to exceed one story in height.”  All of the original homes in the subdivision were one-story, ranch-style homes, including the one purchased by the Prices. 

After purchasing the property, and receiving notice of the deed restriction, the Prices demolished the existing structure and sought to build a new home on the property.  Neighbors approached the Prices cautioning them about the deed restrictions, but the Prices assured them they were not planning to construct a two-story house.  When construction began, it became clear to the neighbors, specifically appellees Kenneth and Karen Kravitz, that the Prices were indeed constructing a second story over a portion of their new home.  At that time, the Kravitzs, via their attorney, sent the Prices a cease and desist letter.  Ignoring the warnings and the deed restriction, the Prices continued with their construction, which included a partial second story, a second story balcony, and an exterior staircase which accessed the second story.

The Kravitzs then filed suit seeking to enforce the deed restriction.  At trial, the Prices were found to have intentionally and knowingly breached the deed restriction and were ordered to remove the offending second story at their cost. 

The Prices appealed and argued that the deed restriction’s reference to dwellings of “one story in height” was ambiguous and unenforceable because the use of the words “in height” was superfluous and vague, since it did not specify a numerical height limitation.  The Prices argued that the phrase “one story in height” was meant to place a restriction on the overall height of dwellings but failed to do so because it did not contain a specific numeric height restriction. 

The court disagreed, holding that the plain language of the restriction, the proximity of the subdivision to nearby Camelback Mountain, and the fact that the other homes in the neighborhood were one-story ranch-style homes all indicated that the purpose of the deed restriction was to protect individual lot owners’ enjoyment of their property.  To achieve that purpose, the court held that the deed restriction unambiguously prohibited the addition of a second story on subdivision dwellings.  The Prices had clearly and knowingly violated that restriction, despite repeated warnings by their neighbors.  Thus, the appellate court held that the court below was not in error.

In an effort to avoid removing the second story from the home, the Prices argued that equitable considerations such as severe economic waste should weigh against forcing them to remove portions of the home they had expended considerable money on.  However, the court rejected this argument, holding that the Prices had actual knowledge of the deed restrictions, but chose to build anyway.  The court noted that the “voluntary choice to expend money to complete second story rooms cannot now constitute a hardship,” and affirmed the decision of the lower court on the issue of injunctive relief.

Price v. Kravitz, 2012 WL 1380269 (Ariz. App. Div. 1, 04/19/12)

The opinion can be at: http://scholar.google.com.hk/scholar_case?hl=en&as_sdt=2,5&as_vis=1&case=18068663599197055191


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