Large Garage Not a Violation of Residential Use Covenant

Just in from the California Associations Institute Law Reporter-June 2008:

Micklon v. Dudley, No. DV-15-85, Mont. Dist. Ct., May 3, 2006

Covenants Enforcement: Defendant built a large two-car garage on an adjacent lot to use as a workshop, and plaintiffs sued claiming it was a violation of a covenant that required all buildings on a lot to have a residential purpose. The court ruled that since the building was built adjacent to his home on the neighboring lot, the residential requirement had been met.

Arthur and Lynn Dudley purchased two adjoining lots in a subdivision located near Libby, Mont. When purchased in 2004, a 2,000-square-foot home with an attached two-car garage was located on one lot, and the other was vacant. After purchase, the Dudleys built a 3,000-square-foot shop. The shop had steel siding, no windows, two 14-feet-high garage doors, a motor-home service bay with a walk-under pit, and a hydraulic lift for automobiles. Although the house has an attached two-car garage, it was insufficient to house the Dudley's motor home, two ATVs, and dune buggy.

Dennis Micklon, another lot owner, sued the Dudleys, claiming that the shop violated a provision of the original CC&Rs for the subdivision filed in 1983. Micklon argued that the shop violated a clause in the declaration that stated that lots could only be used for residential purposes.

The court's analysis stated that restrictive covenants are to be strictly construed. Moreover, if they are clear and unambiguous, the language of the restrictive covenants controls. When the covenant is ambiguous, however, restrictive covenants should be strictly construed and ambiguities resolved to allow free use of the property. The main issue before the court was whether the building qualified as residential use of real property. The court compared this case to two specific Montana cases with similar sets of facts.

In the first case, Hillcrest Homeowners Association v. Wiley, 239 Mont. 54, 778 P.2d 421 (1989) (CALR, April 1990), the defendants purchased a lot in a subdivision in which a restrictive covenant provided that "no lot shall be used except for single family residential purposes." The defendants built a steel-sided garage on their lot and did nothing further with their property until the homeowners association sued seven years later, asking that it be removed. The district court ruled that the garage, by itself, was a permissible "residential purpose." However, the Montana Supreme Court disagreed, stating that a garage, by itself, is not consistent with "single family residential purposes" when the garage is not used in conjunction with a residential dwelling.

The second case evaluated by the court, Tipton v. Bennett, 281 Mont. 379 (1997), ended with similar results. In that case, the trial court ruled that the defendants violated a "residential purposes only" restriction for building a 3,200-square-foot building described as a large garage without a residence. In that case, the court ruled that the defendants could keep the storage building on the condition that a residential dwelling be constructed within one year.

In this case, the court concluded that although the structure was approximately the same size as the building constructed in the second case, this structure was not the same. Instead of being a large storage building, this building was used in the defendant's daily routine and actively used in conjunction with a residential building. The court reasoned that no house could hide the shop without rendering it unusable as a garage. As a result, the court concluded that the defendant's shop qualified as a residential use and was not in violation of the declaration.