The Court of Appeals of Virginia has held that a circuit court dismissed a property association’s assertions that a business failed to pay fees after an unauthorized rezoning that breached the declarations. Now, the association is unable to collect fees from the business.
The Judge’s Findings
According to the current owner, the business was not subject to the declaration or needed to pay fees because it bought the property a little after the rezoning. The circuit court granted demurrer. Jude Richard Y. AtLee concurred that the association’s claims against the previous owner were unrelated to its actions against the present owner. Moreover, the association did not cite the declarations that each lot must pay assessments within the purview.
According to Section 4.3 of the Commercial Declaration, if the property covered by the declaration was rezoned for residential purposes, the association may withdraw it from the Commercial Declaration and immediately subject it to the Residential Declaration.
Rezoning Without Authorization
The Ashburn Village Community Association governs several residential and commercial lots in Loudoun County. Its declarations delineate the owners’ rights and obligations. Meanwhile, Waltonwood Ashburn bought a property in an office park within the association’s purview. Before the purchase, the property was regarded as a commercial lot subject to the commercial declaration.
Two months before the sale, the previous owner, B.F. Saul Real Estate Improvement Trust convinced the county board of supervisors to rezone the property. The plan was to develop it into a congregate care facility for the elderly.
The commercial declaration bans rezoning without the association’s approval. B.F. Saul did not seek approval, and the association did not follow the process to subject the property to the residential declaration.
Later, Waltonwood built a congregate-care facility for the elderly on the property without paying assessments. The association subsequently took legal action for breaches of both declarations and for injunctive relief. However, the circuit court granted Waltonwood’s demurrer. The association later appealed.
Owner on Record
The association based its argument on Section 16 of the commercial declaration. Article 16 mandates the lot’s owner to seek approval to rezone the property. However, the lot’s owner is defined as the person who owns the lot in fee simple.
The association did not argue against the fact that Waltonwood got the title two months after the board approved the rezoning application of supervisors. According to the judge, Waltonwood was not the property owner when it was rezoned and had no duty to seek approval from the association.
The Supreme Court of Virginia also held in Sainani v. Belmont Glen Homeowners Ass’n that restrictive covenants must be construed against the persons seeking enforcement and the grantor, and ambiguity or substantial doubt should be resolved in favor of free use of property and against restrictions.
Where the parties’ intentions are clear, the restriction is reasonable. If it is apparent from reading the whole instrument, the restrictions have a certain meaning by definite and necessary implication. The Sainani court held that the restrictive covenant must be enforced.
Association Unable to Collect Fees
The association claims that Waltonwood breached Section 16 of the commercial declaration and refused to pay assessments because it was not an owner. However, according to AtLee, Waltonwood was not subject to assessments under the commercial declaration because the property was rezoned as an elderly congregant care facility when it took the title.
The commercial declaration distinguishes commercial lots and elderly congregant care facilities. It designates those facilities as multifamily residential properties, according to the judge. Furthermore, it states that “owner” meant a commercial lot owner unless otherwise specified.
The commercial declaration does not assess fees for multifamily properties. Waltonwood did not own a commercial lot because it was zoned as a multifamily residential lot during its ownership. It was not required to pay assessments so the association is unable to collect fees from them.
Residential Fees
According to the association, Waltonwood must be subject to the residential declaration. However, AtLee stated that the association does not cite any provision in either declaration that states each lot under its purview must pay assessments. He states that the association is disregarding Section 4.3 of the commercial declaration, which states that properties under the declaration rezoned for residential purposes could be withdrawn from the commercial declaration by the board of directors and immediately be subject to the residential declaration.
The association failed to withdraw the property so Waltonwood was not subject to the residential declaration. Meanwhile, the circuit court sustained Waltonwood’s demurrer.
Injunctive Relief
The association is seeking to enjoin the use of the property as an elderly congregate care facility. It asserted that Waltonwood violated property rights by not obtaining approval before the rezoning. However, AtLee states that a party looking to enforce a real covenant is entitled to the requested remedy upon demonstrating that the covenant and its breach are valid.
However, Waltonwood did not own the property during rezoning, and the association failed in its argument. The rezoning violated the commercial declaration, but the owner at the time was B.F. Saul, not Waltonwood, according to the judge. Hence, the association’s claims against the previous owner are irrelevant to its actions against Waltonwood. The circuit court sustained the demurrer. As a result, the association is unable to collect fees from Waltonwood.
