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Court upholds twenty-one year limit on restrictive covenants; denies homeowners’ association the right to levy assessment

Court upholds twenty-one year limit on restrictive covenants; denies homeowners’ association the right to levy assessment

Posted on 03/01/2012 at 11:46 AM by William Stiles

NOTE: This blog has been updated. Anyone who has lived in a private community setting – whether condominiums, townhouses, cooperative housing or a dedicated subdivision of individual lots – is familiar with the monthly dues assessed to each owner to defer the costs of common area maintenance and repair. Pursuant to Iowa Code Section 614.24, the Iowa Court of Appeals in Chipman’s Subdivision Homeowners Association, Inc. vs. E. R. Carney and Kathy Carney (“Chipman v. Carney”) recently denied the right to levy those assessments on such owners when the covenants creating the right to do so are over twenty-one years old. Iowa Code Section 614.24 imposes a twenty-one year limit on the life of land-use restrictions by providing for automatic termination of the covenants in the absence of proper affirmative actions to continue them. Iowa Code Section 614.25 provides that in order to avoid automatic termination of restrictive covenants, a claimant may file a verified claim to extend the limit for an additional twenty-one years. The Court in Chipman v. Carney noted that the homeowners’ association had not properly perfected an attempt to preserve or extend the limit beyond the initial twenty-one year period. Thus it is important to be aware of not only the twenty-one year time limit in which to file a verified claim to extend, but also the requirements of a properly perfected verified claim to extend.  Those requirements are as follows:

  1. Must be filed in the county recorder’s office;
  2. Must set forth the nature of the interest;
  3. Must set forth the manner in which the interest was acquired; and
  4. Must set forth the time the deed, conveyance, or contract was recorded.

Furthermore, the verified claim needs to be indexed under the description of the real estate involved in a book set apart and specially designed for that purpose to be known as the ‘claimant’s book.’  This book must be kept in the office of the recorder of the county where such real estate is situated, and said statement, when so indexed, shall be recorded as other instruments affecting real estate. This case will have many homeowners’ associations and their members scrambling to check on the enforceability of their assessment rights covenants.

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