134 So. 3d 784
Miss. Ct. App.2013Background
- Kepharts own a leasehold in Northbay, subject to the Declaration and NPOA Bylaws.
- The Declaration allows residential leasing only if four conditions are met, including the lease being in writing and subordinate to the Declaration.
- The Board adopted a Resolution prohibiting renting/leasing, claiming it fell within the Board’s rulemaking power.
- Amendments to the Declaration require owner approval, with a 75% lot ownership threshold and District approval, while material bylaws amendments require mortgagee consent.
- Kepharts purchased in 2010, leased to Phillips, and NPOA sued in 2011; chancery court upheld the Resolution as valid; Kepharts appeal contends it required an amendment to the Declaration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a board-provided leasing prohibition can operate as a rule, not an amendment | Kepharts argue amendment needed | Board may regulate by resolution | Resolution void; amendment required |
| Whether leasing rights are a material change requiring member consent | Leasing rights are not freely alterable by board | Leasing changes can be board rules | Material change; reserved to Members; board lacked authority |
Key Cases Cited
- Kemp v. Lake Serene Property Owners Ass’n, Inc., 256 So.2d 924 (Miss. 1971) (restrictive covenants require strict construction; ambiguity favors the restricting party)
- Kinchen v. Layton, 457 So.2d 343 (Miss. 1984) (covenants must be fairly construed; instrument read by ordinary sense)
- Mendrop v. Harrell, 233 Miss. 679, 103 So.2d 418 (Miss. 1958) (restrictive covenants interpreted by their apparent purpose)
- Schaeffer v. Gatling, 243 Miss. 155, 137 So.2d 819 (Miss. 1962) (restrictions should not be extended by strained construction)
- Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857 So.2d 748 (Miss. 2003) (questions of contract interpretation are reviewed de novo)