N.D. Supreme Court hears dispute over whether HOA approvals waive metal-roof covenant

The North Dakota Supreme Court heard oral arguments March 24, 2024, in Carpenter v. South Bay Homeowners Association over whether past approvals of metal roofing in a subdivision amount to a waiver of a covenant barring metal roofs or whether a written "no waiver" provision in the covenants precludes that defense, attorneys told the justices. The court took the case under advisement and did not announce a decision.

The dispute concerns restrictive covenants in South Bay’s declaration that limit roofing materials to "cedar shakes, cedar shingles, earth toned color shingles," and whether the homeowners association's Architectural Review Committee (ARC) effectively waived enforcement by approving some roofs with metal components, appellant counsel Casey Chapman told the court. "There is a restriction at index 51 and at paragraph 3 d 1, which says that in this subdivision, you can only have cedar shakes, cedar shingles, earth toned color shingles," Chapman said.

Chapman, representing homeowner Carrie Carpenter, said evidence in discovery shows roughly 10 houses in the development with some metal roofing, including two properties with full metal roofs and one with a second-story metal roof. He pointed to an email he said was sent July 29, 2017, from an ARC member, David Massey, to a builder approving plans after metal-roof plans were submitted on July 13 and July 20, 2017. "The email was sent to the builder and said your plans are approved after the association says they received the plans with metal roofs," Chapman said, arguing that at least some approvals created a factual dispute about waiver.

Appellee counsel Garrett Ludwig, representing South Bay Homeowners Association, responded that the subdivision's covenants include a separate no-waiver clause (paragraph 22) that this court previously interpreted in Wachter and that the trial court therefore correctly barred Carpenter’s waiver claim. Ludwig said the evidence showed only limited, minor metal accents on a small number of roofs over an 18-year period and that the record did not show bad faith or arbitrary action by the ARC. He summarized the association's position: "the no waiver provision unambiguously provides [that] a waiver of a violation of a restriction will not be considered a waiver of any subsequent violation," and the plaintiff had not plead or proved bad faith.

Both lawyers debated whether an ARC approval is itself an "approval" that eliminates a breach or whether an approval of a particular lot can coexist with a covenant that reserves enforcement rights for future cases. Chapman argued that an ARC approval should be treated as a binding decision that, in practice, prevents the association from later denying the same change to another homeowner. Ludwig countered that approving some roof features in the past does not require the ARC to grant the same relief to another homeowner and said the Wachter precedent controls.

The trial court (Judge Phelan) granted summary judgment for the association on the waiver claim, finding insufficient evidence of waiver and applying the no-waiver clause; both sides argued over whether the record includes material factual disputes that would defeat summary judgment. Counsel and the justices also discussed whether evidence in the record showed approvals, denials, or unfiled changes for particular properties. Chapman characterized some documentary gaps (for example, missing ARC files for one full-metal roof) as material; Ludwig said the most significant record entries showed limited metal use and that no full-metal-roof approval was documented in the files he relied on.

No rulings were made from the bench. A court officer told the courtroom, "This case will be taken under advisement as all cases are," and the court was adjourned until 10:00 a.m. March 25. Written opinions will be posted later on the North Dakota Supreme Court website.

Why it matters: The court’s decision will clarify how far a homeowners association's reserved enforcement rights extend when a committee has previously allowed construction that appears to conflict with a written covenant. The case bears on homeowner rights, ARC discretion, and the limits of contract-based waiver claims across multiple subdivisions subject to a single declaration.