Restrictive Covenants - Relative Hardship Defense - Unclean Hands


Esfahani v. Steelwood Property Owners’ Association, Inc., [Ms. 2170455, Aug. 10, 2018] __ So. 3d __ (Ala. Civ. App. 2018). This unanimous decision by Judge Thomas affirms the Baldwin Circuit Court’s judgment requiring a property owner to remove palm trees planted in violation of a subdivision restrictive covenant requiring approval of substantial changes to landscaping.

The court acknowledged the continuing viability of the relative hardship test which denies enforcement of a restrictive covenant if enforcement would harm one landowner without substantially benefitting other landowners. Ms. *25. The court held that this equitable doctrine was unavailable to Esfahani because he planted the palm trees knowing that the restrictive covenants required the HOA’s approval. The court held that “‘pertinent specific application of the clean hands doctrine is that a restrictive covenant should be enforced if the defendant had knowledge [or constructive notice] of it before constructing an improvement contrary to its provisions, even if the harm is disproportionate.’” Ms. *26, quoting Grove Hill Homeowners’ Association, Inc. v. Rice, 90 So. 3d 731, 737 (Ala. Civ. App. 2011) (internal quote marks omitted).

The court reversed the circuit court’s award of attorney fees to the Association because “[t]he plain language of neither the Association’s bylaws nor Steelwood’s declaration authorized an award of attorney fees in actions involving only injunctive relief....” Ms. *34.

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