Your Neighborhood Needs an Approving Authority

Our property values are at risk because some neighborhood covenants at this time are not now being enforced. This document is provided on behalf of Mountain Shadows Community Association (MSCA) to let each homeowner know the risks and options available to preserve our covenant enforcement. Each unprotected filing or subdivision needs volunteers to get this done. The MSCA board is made up of unpaid volunteers, and it is beyond our scope to organize the estimated 800 households that don’t have Approving Authorities.

Covenants are meaningless if they are not enforced. In any subdivision, the Approving Authority (AA) performs all Architectural Control duties and covenant enforcement. Historically, The Schuck Corporation has performed these duties for most of the homes in Mountain Shadows. However, as you have already been informed, The Schuck Corporation is no longer performing these duties, so each subdivision must act on its own behalf to ensure covenant enforcement. The most straightforward option -- as laid out in Section 501 of your covenants -- is to elect a three-person AA made up of people who own one or more lots in that subdivision. Other choices are also outlined in this document, including the consequences of failing to organize an AA.

In the past, Schuck has been enforcing covenants with the assistance of MSCA -- mostly through letters and phone calls and occasionally legal action. Schuck no longer is responsible for this, and the MSCA is unable to perform the Approving Authority duties as the covenants are currently written. It’s up to you to protect your property value by learning your options, and acting in your own interest to ensure that an AA is in place for your property and your subdivision. This document presents the highlights of those steps.

What Are Your Options?

We at the MSCA have formulated the options as we see them.

Option 1: Have a Subdivision-Based Approving Authority

This is the option that is currently dictated by the existing covenants. No legal action (amending covenants) is needed for this. Tuscany Villas, Parkside, Longview, Vantage Vista, Harbor Pines and Twin Harbor are examples of this option, which is likely the most straightforward and appropriate choice for most subdivisions. Indeed, each filing or subdivision should elect their three-person Approving Authority ASAP, in order to protect their interests ASAP. If months from now, your subdivision decides they want to merge with another subdivision, it is no problem that you had already elected an AA for the smaller subdivision.

Option 2: Have No Approving Authority

This option occurs by default if you don’t appoint an AA, and could place you in individual legal jeopardy. In fact, this is the state that most subdivisions presently find themselves in. There are plenty of clauses in your covenants that state that an action cannot be taken without approval from the AA. For example, you can’t build a fence without approval from the AA. But if you don’t have an AA, what do you do? You build the fence and hope for the best. Legal action after you build the fence may require that you tear it down. Additionally, if a builder came in to build on an empty lot in your neighborhood, there would be no AA to look over his building plans. You may then end up with a house in your neighborhood that is less than desirable. Subsequently, your property values may decrease.

Option 3: Merge Several Subdivisions into One

With this option, you move towards having fewer AAs, with theoretically more consistent enforcement. You can merge any number of subdivisions into one, and then have just one AA for that subdivision. This option could take many different forms, too many to discuss here, but any of them would likely require three-fourths of the lot-owners to agree.

Option 4: Have Subdivision-Based AAs, But Join the Umbrella Association MSCA

The main reason to do this would be to let the MSCA amass a legal fund to be used to enforce covenants. Subdivisions who want to do this would need to amend their covenants to include an Assessment Lien clause, which would make annual dues to the MSCA mandatory (undetermined, likely to be around $100/year/family). Then, the subdivisions that pay their annual dues would have access to this legal fund to pursue covenant violators. Use of this fund would be at the discretion of the MSCA. Members of the subdivisions’ AAs could sit on the board of the MSCA. Furthermore, the MSCA would take on the task of writing letters to covenant violators when an AA informs them of a violator. The AA’s however, would retain the responsibility of approving any improvements, new builds, etc.

What Should You Do Now?

Nothing happens without your direct involvement. These steps can be very straightforward in certain neighborhoods, but you can’t know without completing the first two steps following.

First Step

You need to find out who else owns lots in your subdivision and organize them, because at least 50% of the lot owners need to approve the composition of the three-person Approving Authority. You can find out what subdivision you live in by looking at page 1 of your covenants. It will usually state the Filing number/s and lots or blocks that are included in said subdivision. There is a copy of your subdivision’s plat (map) which shows all the lots included in your subdivision. If you don’t have a copy of your covenants, you can also find out which subdivision your lot is in by doing a search at the El Paso County Assessor’s Office website: http://www.land.elpasoco.com/default.htm. This site will easily tell you what filing you are in, but it may be more arduous for you to find out all the addresses of the other folks in your subdivision. If you contact Bev Huffman at Schuck Corporation (719-633-4500), she can tell you all the addresses included in your subdivision, or you can obtain a copy of your covenants from her. Additionally, you can get a copy of your covenants at the County Recorder’s office (200 S. Cascade Avenue) for $1.25/page. Or you can get a free copy from the title company that closed on your house.

Second Step

Once you know the addresses of all of your subdivision’s members, you should try to have a meeting (mail out invitations or go door to door with flyers) to discuss your options and to see if a majority of the lot owners prefer one approach to another. A person or persons need to volunteer to organize your subdivision. If it’s not you, nothing may get done. The approaches that require amending your covenants require at least 2/3 of the lot owners to agree and sign the amendment. Note that for these purposes, each lot owner gets one vote, so if you own 2 lots, you get two votes. If a husband and wife co-own one lot, they only get one combined vote. They don’t each get to vote.

If you’re willing to be the organizer for your subdivision, let us know at the MSCA, as we’ll post this information on our website (http://www.mountainshadows-msca.org/). Being that we are volunteers at the MSCA, we want to make this process as easy as possible for you and us. This means we prefer to deal with a single point-of-contact for each subdivision. We’ll help subdivisions on a first come, first served basis.

Third Step

Depending on which option the lot owners decide on, the next step will differ. Once you can get at least 2/3 of your lot owners to agree to one of the above options, we at the MSCA would be happy to help guide you through the next steps.

	Pros	Cons
Option 1 Subdivision-Based AA	· Doesn’t require amendment to covenants. · Dues not mandatory since covenants not amended. · Less bureaucracy than options 3 and 4. · Most interested parties—those who own property in subdivision—are in control.	· Too small to have fees be able to build up lawsuit fund. · Visual harmony of neighborhoods may break down as individual filings enforce covenants and architectural standards differently. · Requires more volunteers. · Less likely to find qualified people to perform architectural control duties. · Neighbor-on-neighbor disputes are likely.
Option 2 No AA	· No effort required on your part.	· Property values likely to decrease. · Eyesores in your neighborhood likely to increase. · Neighbor-on-neighbor disputes are likely.

Option 3 Merge Several Subdivisions into One	· Requires fewer volunteers. · Dues not mandatory. · Similar look and feel would remain, as AA decisions would likely be consistent across the board within the merged subdivision. · Less bureaucracy than options 4. · Merging could allow accumulation of a lawsuit fund, if enough houses are merged together.	· 2/3 – 3/4 approval of lot owners required. · Higher cost involved (higher than option 1) due to covenant amendments. · May be too small to have fees be able to build up lawsuit fund. · Neighbor-on-neighbor disputes are likely.
Option 4 Subdivision-Based AAs, with Umbrella Association MSCA	· Most interested parties—those who own property in subdivision—are in control. · Enough members to amass lawsuit fund through dues. · Neighbor-on-neighbor disputes less likely since violation letters would come from the MSCA instead of a neighbor who is on the AA.	· Mandatory dues. · Requires amendments to covenants. · 2/3 – 3/4 approval of lot owners required. · Higher cost involved (higher than option 1) due to covenant amendments. · Visual harmony of neighborhoods may break down as individual filings enforce covenants and architectural standards differently. · Requires more volunteers. · Less likely to find qualified people to perform architectural control duties.

Frequently Asked Questions

Q: Do I live in a covenant-controlled community?

A: Yes! You should have received a copy of your covenants at the closing of the purchase of your property.

Q: Did I have to agree to the conditions of the covenants when I bought my house? Are the covenants a legally binding contract?

A: Yes. They are mandatory and permanent (unless amended in the proper way) and apply to subsequent owners of your property as well.

Q: Since there is no Approving Authority right now, is my neighbor free to violate the covenants?

A: No. In most cases, you can sue your neighbor in small claims court for violating the covenants. However, this does not apply to new builds or large improvements.

Q: How many homes are in MSCA?

A: There are about 1400 homes in Mountain Shadows, of which only about 350 pay dues. These homes comprise about 35 filings. Only seven of these filings are in six homeowners’ associations.

Q: Are covenants a good thing?

A: Yes, they are, because they help maintain or increase your property values by preserving the community at a higher standard than non-covenant-controlled communities. They also maintain or increase your standard of living by not allowing undesirable events to occur. Such event could include letting your neighbor breed or board dogs at their house, letting your neighbors build unsightly outposts on their property, letting your neighbor paint their house a color that does not blend with the rest of the neighborhood, and the like.

Q: What would MSCA’s role in the community be if Option 4 were not chosen?

A: We would continue to do things that we already do: publish the newsletter (though it may move to an online version), review local development proposals and issues, interact with governmental bodies, coordinate picnics, etc.

Items to Consider for Your Neighborhood

Members of the Approving Authority may want to consider obtaining an Umbrella insurance policy or D&O (directors and officers) insurance to protect against lawsuit costs.

Are you comfortable serving on your AA without a legal fund in place as insurance against possible lawsuits?

How will your subdivision pay for costs like legal fees for drafting amendments to covenants, filing fees, notary fees, and so on?

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