You MUST Beat the Architectural Review Shot Clock
March Madness would be approaching right now, if the NCAA tournament had not been cancelled because of COVID-19. This article was written before that unfortunate occurrence. Nevertheless, we’ll stand pat on the basketball analogy to remind our association clients to keep their eyes and minds on the (figurative) shot clock relative to their architectural application review processes. If you let the clock run out, you’ll risk considerably more than simply losing possession of the ball.
If you’re not basketball-oriented, you may be thinking: What in the heck are they talking about? Simple. A specified time period, set forth in your association’s recorded document (declaration for HOAs, bylaws (usually) for condominiums) during which your association must receive, consider and either approve or disapprove a request for an alteration, modification or improvement submitted by one of the association’s members. Here is an example of the type of deadline provision to which we’re referring:
“The Committee’s approval or disapproval as required in these covenants shall be in writing…[i]n the event the Committee or its designated representative fails to approve or disapprove such design and location within sixty (60) days after said plans and specifications have been submitted to it, approval will not be required and this Article will be deemed to have been fully complied with.”
In HOA declarations, this provision is typically included within the article of your declaration entitled “Architectural Control.” Most declarations are different, of course, because each developer (“Declarant”) had its own attorney preparing that developer’s documents, so you may have to search for it in your declaration. But wherever in your declaration is described the architectural review process, there’ll you find the figurative architectural application “shot clock.”
Similarly, condominium bylaws (dating from approximately 1985, although you may see it in earlier condominium bylaws as well) have a corresponding provision which you can typically find in the bylaws section entitled Additions, Alterations and Improvements — By the Unit Owner. Again, however, there are dramatic differences in format, style, content, etc. from one set of condominium documents to another. You may have to closely read your condominium bylaws to find it, and if it’s not in there, it might be in the condominium declaration.
Why would a developer write this type of deadline into his declaration (or bylaws)? That’s a good question. After all, it does seem to potentially put the association in a bit of a bind, doesn’t it? We can only surmise that developers’ attorneys perceived such a deadline as a concession to the lot or unit owners. For example, think about the consequences if an association has an indefinite period during which to process the application and return a decision to the applicant. In some associations, that could doom the lot owner’s pet project to the oblivion of limbo, a veritable black hole from which no light — or ARB application — would ever escape.
But because of the deadline, volunteers on the architectural review board or committee (“ARB/ACC”) or board of directors must be very diligent in tracking the applications from the date of submission to ensure that the applications receive consideration and a decision within the prescribed time. Otherwise, the association’s intentional or unintentional failure to approve or disapprove the application within the required period will have the effect of automatically approving the application. And we’re sure that anyone who has served on an ARB/ACC or board of directors knows that some applications received from members simply must be disapproved. You don’t want one of those applications approved just because the association didn’t beat the shot clock buzzer.
Realize, then, that there’s no margin for error on the part of the association. What happens if the ARB/ACC member to whom the requestor handed the application inadvertently mixes the application up with other, personal papers? The application may sit on his desk at home for 3 months before it is discovered. Or what if 2-3 months go by without an ARB/ACC meeting, because of illnesses, busy schedules, or whatever? A delay on the part of the association in processing the application may be completely unintentional, but it may nevertheless result in the association’s failure to approve or disapprove the application within the required time period.
In those situations, if the applicant is courteous, cooperative and community-minded, he or she may inquire of the ARC or ARB as to whether the application has been considered, and if so, the outcome thereof. That type of member wouldn’t dream of commencing a project before receiving the association’s approval.
But sometimes one of your lot owners (the neighborhood oddball) may not operate with such good faith. He may submit an application for something unusual, eccentric or even bizarre. That member may know in advance that it is highly unlikely that the ARB/ACC will approve his application as submitted. But if he’s particularly cunning, he may attempt to manipulate or “game” your review process. He may do this by submitting his application immediately after a personnel turnover in your ARB/ACC or board of directors. Or he may casually hand it to an ARB/ACC member immediately after a quarterly meeting, knowing full well that the relevant committee or your board of directors may meet only quarterly, even though the deadline provision for the review process in your relevant recorded document may be only 45 days. Under those types of circumstances, that type of applicant will then quietly return to his residence and begin marking off the days on his calendar. On the 46th day after he casually handed it to an ARB/ACC member (if it is a 45-day deadline), his contractor is on his lot commencing construction of a carport, even though there isn’t a single carport in your community.
What then? We won’t mince words — your association has a real problem. You may instruct your law firm to immediately file suit to enjoin the future carport, and we will do so. But by failing to approve or disapprove the application within the required time period, you may have handed the applicant — be he nefarious or not — a potentially dispositive issue in the litigation. What does dispositive mean? It means he wins in court. Your association is then stuck with both something outlandish in your neighborhood and with paying the cunning applicant’s attorneys’ fees. Think insult to injury.
Finally, you should realize that the scenario in which an association fails to approve or disapprove an application within the required time period occurs most frequently with applications that the ARB/ACC deem to be incomplete. The association wants to handle the matter diplomatically and not appear heavy-handed or dictatorial. Accordingly, the ARB/ACC notifies the applicant that his application is incomplete and helpfully describes the information that will be necessary for the lot owner to complete the application. That information may prove time-consuming or difficult for the lot owner to produce, or, alternatively, because the lot owner becomes irritated because he or she just wants their project and they don’t want to have to play ball with the association. The association and the lot owner then commence a pas de deux, with the association attempting to be understanding and empathetic to the lot owner’s situation while the lot owner fails – for whatever reason – to provide the materials necessary to complete the application. Perhaps after some period the association returns the application to the lot owner merely as “incomplete.”
Result? The time period expires and the association has failed to approve or disapprove the application within the required time period. The association’s excessive concern for “feelings” and political niceties thus hands the applicant a potential cudgel with which to beat the association in court.
How to avoid that completely unnecessary outcome? As an association ARB/ACC or board member, you can try to be a Brussels diplomat if you want. But regardless of the administrative style you adopt, the association must expressly approve or disapprove the application within the required time period. If the application is incomplete and cannot be approved upon the first review it receives from the ARB/ACC, then the application should be returned to the lot owner applicant as: “Disapproved as incomplete.” The word “disapproved” must be unambiguously present in the association’s written decision. In this way the association will have complied with its declaration. The lot owner may always re-submit the application with the additional information required by the association. If he does, the ARB/ACC should then start “the clock” anew upon receiving it and render another decision within the prescribed time period.
To return to our March Madness metaphor, take the shot. Expressly approve or disapprove the application within the time required and get that decision back to the applicant. Don’t be left holding the ball when the shot clock buzzer sounds. You won’t like the outcome.