Amendment Process to Remove Discriminatory Restrictive Covenants

Amendment Process to Remove Discriminatory Restrictive Covenants

Community Associations Institute (CAI) supports a process by which a governing board of a community association may remove antiquated and unenforceable discriminatory restrictions contained in covenants without a vote of the owners. CAI advocates the adoption of state legislation that provides for a process to allow for the removal of restrictions deemed to be discriminatory under the federal Fair Housing Act and/or state anti-discrimination laws.  


BACKGROUND  

In 1968, Congress passed the Fair Housing Act (FHA) to prohibit private parties from setting discriminatory terms and conditions on the sale or use of property by making the practice of writing racial covenants into deeds illegal. Despite being deemed illegal by the FHA, that law did not provide for a method of removing discriminatory provisions from deeds and governing documents and thus remain as a blot on housing documents such as plats, deeds, and homeowner association bylaws. These discriminatory covenants are unenforceable and may cause unnecessary emotional distress to members of the community. Learn more about CAI’s Fair Housing Policy here: https://www.caionline.org/Advocacy/PublicPolicies/Pages/Fair-Housing.aspx  


RECOMMENDATION  

CAI supports legislation that authorizes a simple process whereby a governing board of a community association can remove antiquated, illegal, and unenforceable covenant restrictions deemed to be discriminatory under federal Fair Housing Act and/or state anti-discrimination laws. CAI supports complementary legislation that would mandate the removal of discriminatory restrictions upon receipt of an individual owner’s petition to the governing board of a community association or a court to remove discriminatory restrictions.  


MODEL LANGUAGE  

Some states have statutes that explicitly allow community associations an expeditious and tenable process to remove discriminatory restrictive covenants. However, if a state does not have a statute allowing modifications of unenforceable restrictive covenant language, CAI supports the following model language:  

A restriction, covenant, or condition, that prohibits or limits the conveyance, encumbrance, rental, occupancy, or use of real property on the basis of race, color, national origin, religion, sex, familial status, or prohibits maintaining a trained guide dog or assistance animal because the individual is blind, deaf or has a physical disability, is void and has no legal effect, except a limitation of use for religious purposes as permitted under the Federal Fair Housing Act or state law.  


CORRECTIVE ACTIONS BY AMENDMENT  

  1. A homeowners' or property owners' association, cooperative corporation, condominium association, or planned community acting through a majority vote of its full board membership, may amend the association's governing documents for the purpose of removing any restriction, covenant, or condition, that prohibits or limits the conveyance, encumbrance, rental, occupancy, or use of real property on the basis of race, color, national origin, religion, sex, familial status or maintains a trained guide dog or assistance animal because the individual has a disability recognized under the Fair Housing Act (42 U.S.C. 3601 et seq. or [insert citation to state anti-discrimination law].  
  2. If the board of a homeowners' or property owners' association, condominium association, or planned community, receives a written request by a member of the association that the board exercise its amending authority under subsection (a), the board shall, within a reasonable time not to exceed 90 days, investigate any claim of an unenforceable covenant and if determined to be unlawfully discriminatory shall cause the provision to be removed, as provided under this section.  
  3. Removal of a restriction, covenant, or condition pursuant to subparagraphs (a) or (b) above will not require approval of the owners, notwithstanding any provision of the governing documents to the contrary.  
  4. An amendment under subsection (a) may be executed by any board officer.  


PROPERTY DEED CHANGE  

  1. If a deed or other instrument contains a provision that is prohibited as discriminatory under state or federal law, the owner, occupant, or tenant of the property that is subject to the provision or any member of the board of a homeowners' or property owners' association that would have a right to enforce such a provision may bring an action in the [insert court having jurisdiction] to have the provision stricken from the records of the register of deeds.  
  2. An action under this section must be brought as an in rem, declaratory judgment action and the title of the action must include a description of the property. The owners of record of the property or any part of the property described in a deed containing an unlawful discriminatory provision are necessary parties to the action.  
  3. If the court finds that any provisions of the deed or instrument are prohibited under this act, it shall enter an order striking the provisions from the records of the public recording office and direct that the order striking the provisions be notated on the deed or other instrument for the property described.  
  4. Any reversionary clauses or other provisions intended to penalize the violation of a discriminatory provision in a deed or other instrument that is authorized to be removed under this law shall be void and unenforceable.  


Adopted by the Board of Trustees, February 27, 2020  

RELATED LINKS