Rhue v. Cheyenne Homes, Inc.
168 Colo. 6, 449 P.2d 361 (1969)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A restrictive covenant requiring property owners to obtain approval from an architectural control committee before construction is enforceable, even without specific aesthetic standards, provided the committee's refusal to approve plans is reasonable, made in good faith, and not arbitrary or capricious.
Facts:
- Cheyenne Homes, Inc. developed a new subdivision and recorded a 'Declaration of Protective Covenants' for the entire area, with the stated purpose of protecting property values.
- One covenant, paragraph C-2, required that no building could be erected or placed on any lot until the construction plans and specifications were approved by an architectural control committee.
- The subdivision was approximately 80% developed with new, modern ranch-style or split-level homes, predominantly of brick construction with asphalt shingle roofs.
- Leonard Rhue and Family Homes, Inc. (Rhue) acquired a lot within this subdivision.
- Rhue sought to move a thirty-year-old Spanish-style house, which had a stucco exterior and a red tile roof, onto their lot.
- Rhue failed to submit their plans or specifications for the house to the architectural control committee for approval as required by the covenant.
Procedural Posture:
- Cheyenne Homes, Inc. filed a lawsuit against Leonard Rhue and Family Homes, Inc. in the trial court, seeking an injunction.
- The trial court granted the injunction, prohibiting Rhue from moving the house into the subdivision.
- Rhue, as plaintiffs in error, appealed the trial court's judgment to the state's highest court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a restrictive covenant that requires submission of building plans to an architectural control committee for approval, but lacks specific standards to guide that approval, become unenforceable for vagueness?
Opinions:
Majority - Pringle, J.
No. A restrictive covenant requiring approval from an architectural control committee is enforceable even without specific standards, as long as the committee's decisions are reasonable and made in good faith. The court reasoned that such covenants are a common and valid method used by developers to protect property values and maintain a general plan of construction. The clear intention of this covenant was to protect property values. While the committee's power is not absolute, it is checked by the corollary legal principle that any refusal to approve plans must be reasonable, in good faith, and not arbitrary or capricious. In this case, disapproving a 30-year-old Spanish-style house in a neighborhood of new, modern homes was reasonable because it was based on protecting the market value of surrounding properties and maintaining architectural harmony, which aligns directly with the covenant's stated purpose.
Analysis:
This decision validates the common real estate development practice of using architectural control committees to enforce aesthetic standards and protect property values, even when the governing covenants are drafted broadly. It establishes a 'reasonableness' standard as the key judicial check on the committee's power, shifting the legal inquiry from the specificity of the covenant's text to the good faith of its application. This approach provides flexibility for planned communities but also confirms that homeowners have legal recourse if a committee's decision is arbitrary, capricious, or not made in good faith to further the covenant's purpose.
