300 P.3d 736
N.M. Ct. App.2013Background
- Vazquez bought a lot in Estates at Desert Ridge Trails in 2006, built a home, and is subject to 2004 CCRs and 2007 HOA rules.
- HOA sued Vazquez in 2010 to enjoin short-term rentals; Vazquez advertised minimum stay of three nights and rented to families, not using a separate rental business license.
- District court held CCRs did not prohibit short-term rentals and HOA rules/unreasonable interference; TRO dissolved and injunctive relief denied.
- HOA amended CCRs in November 2010 to prohibit rentals of less than ninety days; Supplemental CCRs recorded January 25, 2011 after votes tallied as 95 in favor, 4 against.
- In March 2011 the HOA again sued Vazquez, arguing violations under Supplemental CCRs; district court found amendments required unanimous approval during the initial 25-year term and Supplemental CCRs were void.
- HOA appealed both rulings, arguing district court erred in various respects and that original CCRs still restricted Vazquez’s use.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred by considering unpleaded CCR provisions. | HOA contends broader CCR violations were part of pleadings by general allegation. | Vazquez argues only pleaded provisions may be considered; untimely to expand claims. | No abuse; court limited to pleaded provisions; extra claims not considered. |
| Do original CCRs Article VI, §21 prohibit short-term rentals as ‘single-family residential purposes’? | HOA asserts short-term rentals violate single-family restriction via business-like use. | Vazquez contends use remains residential; not a prohibited business use. | Short-term rentals do not violate the ‘single-family residential purposes’ language. |
| Is Rule 2.2 of HOA Rules (no rental for under 30 days) enforceable? | HOA contends Rule 2.2 restricts rentals and requires lease copies to HOA. | Vazquez argues Rule 2.2 exceeds HOA authority absent CCR amendment. | Rule 2.2 is invalid; HOA lacked authority to restrict rentals via rules rather than CCR amendment. |
| Did the Supplemental CCRs validly amend the CCRs during the initial 25-year term? | HOA asserts two-thirds vote sufficed to amend CCRs at any time. | Vazquez contends unanimous approval was required during the initial period. | Amendment required unanimous approval during the initial 25 years; Supplemental CCRs void. |
| Should the district court have considered alleged violations of the original CCRs after voiding the Supplemental CCRs? | HOA argues original CCRs still in effect and violations should be considered. | Vazquez contends the HOA waived claims by not pleading them or timely amending. | District court did not err; original CCRs not properly pleaded post-voiding Supplemental CCRs; claims not revived. |
Key Cases Cited
- Mason Family Tr. v. DeVaney, 2009-NMCA-048 (N.M. Ct. App. 2009) (short-term rentals may not be prohibited by residential-use covenants)
- Hill v. Cmty. of Damien of Molokai, 1996-NMSC-008 (N.M. Supreme Ct. 1996) (single-family restriction interpreted as limitation on use, not just construction)
- Reinecke v. Kleinheider, 804 S.W.2d 838 (Mo. Ct. App. 1991) (“at any time” amendments may override duration; not dispositive here)
- Howells v. Howells, 682 P.2d 504 (Colo. App. 1984) (amendment timing and unanimous consent considerations in covenants)
- Cain v. Powers, 100 N.M. 184 (N.M. 1983) (restrictive covenants construed strictly; avoid reading restrictions by implication)