Homeowner association has authority to decide on new home proposal

The Indiana Court of Appeals has upheld a lower court’s ruling against two homeowners challenging their homeowners association’s interpretation of covenants on building a new home.

In William J. Harness and Bridget V. Harness v. Tabassum Parkar, Arshad Husain, John Mattingly Homes, Inc., and Lakeridge Crossing Homeowners Association, Inc., No. 87A04-1107-PL-380, the appellate court affirmed a ruling by Warrick Superior Judge Keith Meier denying a request for injunctive relief and final judgment from William and Bridget Harness.

The Harnesses filed suit against their Lakeridge Crossing Homeowners Association, as well as a local builder hired by two neighbors to build a home, because of their concerns about the new structure complying with the neighborhood’s restrictive covenants. The HOA held a public hearing about the Harnesses concerns – specifically one provision regarding the proposed project’s building details that gave the HOA sole and exclusive jurisdiction to approve or disapprove a plan.

In March 2011, after a hearing on the topic, the HOA approved the neighbor’s proposed site plan as long as the home is located no closer to the water’s edge of Blue Lake than the Harnesses’ home. The Harnesses disagreed with the resolution and appealed in court, but the trial judge agreed with the HOA’s right to decide the matter and granted summary judgment against the Harnesses.

On appeal, the judges turned to the record and found the evidence supported the trial court’s findings about the HOA’s approval, the deliberative process required by the covenant at issue. Finding otherwise would invalidate the covenant, which the court has refused to do in past cases.

The appellate court affirmed the trial judge’s decision to not substitute his subjective judgments about the covenants in place of the HOA’s subjective judgment that has exclusive authority on this case.

Even though the Harnesses didn’t prevail in this appeal, the appellate panel determined that they didn’t file a frivolous suit or maintain the appeal in bad faith. The requested appellate attorney fees should not be awarded to the opposing parties.