Background
Robert Schurig and Jennifer Boljesic constructed a backyard structure with stone walls, utilities, a fire pit, a television, and a gazebo without first obtaining approval from their homeowners association. Section 15 of the subdivision’s warranty deed required homeowners to submit plans and obtain written approval before constructing a structure, allowing the association to consider aesthetics, suitability, harmony, and neighboring properties’ outlook.
After construction was essentially complete, the homeowners submitted plans, but the association denied approval and sued for declaratory and equitable relief, including removal of the structure. Following a site visit and proceedings resembling a bench trial, the Wayne Circuit Court granted summary disposition to the homeowners. It concluded that their belated application effectively cured the prior-approval issue and that Section 15’s aesthetic standards were too vague to enforce. The court also ruled that the association did not need a homeowner vote to fund the litigation.
The Court’s Holding
The Court of Appeals affirmed dismissal, but on a different ground. It held that litigation costs exceeding $750 were “other nonoperating expenditures” under Article XII, Section 2 of the association’s bylaws. Because those expenditures required approval by a two-thirds majority of votes cast, and the association undisputedly obtained no such approval, it lacked authority to pursue the lawsuit.
The court rejected the trial court’s conclusion that Section 15 was impermissibly vague. Its references to aesthetics, suitability, neighborhood harmony, and views from neighboring properties supplied sufficiently definite standards, and the law required the association to exercise its discretion honestly and in good faith. The court also explained that the homeowners’ late submission made the timing of their request largely irrelevant once the association reviewed and rejected the completed structure; the late request did not itself transform an unapproved structure into an approved one.
Key Takeaways
- An HOA must comply with its own bylaws before incurring litigation expenses, even when suing to enforce deed restrictions.
- A bylaw requiring member approval for nonoperating expenditures above a specified amount can encompass legal fees and litigation costs.
- Architectural restrictions based on aesthetics, suitability, and neighborhood harmony are not necessarily unenforceably vague, particularly when discretion is constrained by duties of honesty and good faith.
Why It Matters
The decision underscores that an association may have a substantively valid covenant-enforcement position yet still lose because its board lacked contractual authority to fund the lawsuit. HOA counsel should examine voting and expenditure provisions before commencing enforcement litigation.
The opinion also confirms that Michigan courts may enforce architectural-review provisions using qualitative aesthetic and neighborhood-compatibility standards, even when the governing documents do not prescribe precise limits for color, height, materials, or dimensions.