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| 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.
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| 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. |
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!
