Kiekel v. Four Colonies Home Association

Facts

In 1971, a subdivision, Four Colonies, was created to be a planned-unit development. The Four Colonies Home Association (Association) governed the subdivision. Also, there was a Declaration of Covenants, Conditions, and Restrictions (Declaration), which explained ownership rights and property-use restrictions, such as restrictions on commercial use and noxious activities. Although the Declaration included lessees and tenants in its definition of a “resident,” the Declaration did not specifically forbid or authorize an owner to rent the property. Additionally, the subdivision’s bylaws incorporated enforcement and procedural provisions. To amend the Declaration, one must gather a supermajority vote of all owners. However, to amend the bylaws, one solely needed to obtain a majority vote of all the owners. Since the subdivisions creation, owners began to rent properties on the subdivision. The Kiekels owned eight units, which the Kiekels did not occupy. Instead, the Keikels rented the units out. Eventually, other subdivision owners began to complain that Keikels’ tenants were engaging in disruptive conduct. Also, the other owners of the subdivision claimed that the Kiekels failed to maintain their units. Thereafter, in 1997, the Association recommended that the owners amend the bylaws to restrict property rentals. Nonetheless, the Association later withdrew the recommendation when it determined that such action would conflict with the Declaration. In 2004, owners amended the bylaws to forbid currently rented property from being rented again once the ownership has been changed. Subsequently, the Kiekels petitioned for declaratory judgement on the grounds that the amendment was void, as it was in conflict with the Declaration. The Association counterclaimed against Kiekels on the grounds that the Kiekels were violating the Declaration by engaging in noxious activity and commercial use on the property. Further, the Association requested the court to grant an injunction to prevent the Kiekels from continuing to rent their units, thus, requiring the Kiekels to sell the units to occupying owners. The district court denied the Kiekels’ declaratory judgement claim and the Association’s request for an injunction on the grounds that the bylaws were not in conflict with the Declaration. Also, the Association could repair the Kiekels’ property and place the cost of the property’s restoration on Kiekels’ annual assessment.