|The Fiorentino home as seen from the street,|
with the beach access boardwalk.
The North Carolina Court of Appeals issued an entertaining decision in Sea Watch at Kure Beach Homeowners' Association v. Fiorentino in November 2019. In this case, a developer of a seaside residential community had reserved an access easement across a homeowner's lot, Lot 6, for other residents to access the beach. Eventually, the access area was expanded to include not only a wooden boardwalk, but also a deck area, bathrooms, and a tiki bar. After these improvements had been in place and in use for approximately 10 years, a homeowner who bought Lot 6 demanded that the improvements be removed and the easement area returned to its original documented use as set forth in the easement agreement for access to the beach only. The homeowners association eventually filed suit and requested a declaratory judgment, which is a request for the court to declare the respective rights and obligations of the various parties.
|The Fiorentino home in question is at top in this picture with what admittedly looks like a pretty large tiki hut on the walkway between the two homes shown.|
After a Superior Court trial, the trial court ruled in favor of the HOA and dismissed the counterclaims of the owner of Lot 6. The court stated that the improvements were allowed to remain, and the association was allowed to continue to use of the deck, bathrooms and tiki bar even though the written easement agreement only provided for an access easement.
The trial court analyzed the history of the use of this area and made the legal determination that an "access easement" "is not merely one of ingress and egress; public representations made by the developer expanded the easement to one involving use of the improvements" as well. The court seemed to also feel that it was important that the improvements had been in use for a substantial period of time and in fact, it appeared that the owners of Lot 6 had had the use of them along with all of the other homeowners in the community for about 5 years, which was the amount of time that the owners of Lot 6 had lived in the neighborhood prior to purchasing Lot 6.
This case is important for a couple of reasons. First of all, it underlines the need for easements and other similar documents to be very specific as to the use which is intended by the original parties. In this case, the court refused to interpret the phrase "access easement” strictly and ruled that an access easement could include the use of these types of pretty significant improvements since the easement document itself provided no specific limitations on what was meant by "access". Homeowners associations, developers, and others entering into easements or placing restrictions on land should be explicit in describing what their intentions are in entering into the agreement as well as very specifically describing the various rights and duties granted in the document itself.
In addition, the court found it important that the tiki bar and other improvements had been in existence for approximately 10 years and were apparently well known to the Lot 6 owners even before they purchased Lot 6. This brings up a couple of other important points. The doctrine of estoppel is very important in understanding contract law and homeowners association law. This is the doctrine of the enforcement of reasonable expectations between contracting parties. In this case, the Lot 6 owners had purchased Lot 6 well knowing of the existence of these substantial improvements and therefore, the court found that they were estopped from later complaining about them. Estoppel is a key legal concept which prevents a party from reneging upon an expectation it reasonably induces in another party to the bargain.
This decision also highlights that real property purchases are almost always a "buyer beware" transaction. Notwithstanding the fact that sellers in North Carolina are required to fill out lengthy disclosures in residential real estate transactions, the law of the state of North Carolina with regard to the purchase of residential property is generally very buyer adverse. In other words, it is very difficult to sue a seller, or in this case a third party developer, for any condition on a piece of land which the buyer was aware of, or should have been aware of, or could have discovered using reasonable due diligence. Generally, even if the seller completely lies in a real property disclosure, that lie will not be actionable unless there is no way the buyer could have detected the true state of the property using reasonable due diligence prior to closing. This decision further exemplifies the rule that a buyer generally buys property subject to any and all conditions that they could have reasonably discovered prior to closing.
Please reach out to us if we can assist your homeowners association with any legal matters, or if you are a developer who prefers to stay out of court!