Relating to Real Estate

In Moore v. Roland Park Roads & Maintenance Corp., No. 2487, Sept. Term, 2016, 2018 WL 3360981 (Md. Ct. Spec. App. July 10, 2018), the Court of Special Appeals held that the Baltimore City property owned by Andrew and Whitney Moore was subject to the Roland Park covenants and that the action by the Roland Park Architectural Review Board (the “Board”) of the Roland Park Roads and Maintenance Corporation (the “Association”) in denying an application to construct a garage was reasonable, not arbitrary. Therefore, the Board's decision was not subject to judicial review, as it was within the business judgment rule.

Roland Park is a residential community in Baltimore City that since 1909 has been subject to recorded covenants that restrict how property may be developed and used. The original covenants expired in 1959, but starting in 1989 a number of Roland Park property owners signed a new declaration, again subjecting their properties to restrictions. The then-owners of the Moores’ property joined in the declaration. Pursuant to the declaration, no buildings may be constructed or altered without consent. The Board now has the authority to give or withhold the necessary consent.

The Moores submitted plans to the Board for renovations to their property including constructing a two-story, three-car garage with a gabled roof. The Board found this to be inconsistent with the neighborhood.

Because the garage would have violated a setback requirement under the Baltimore City Zoning Code, the Moores applied for a variance. The application was denied by the Zoning Administrator, but it was approved on appeal to the Board of Municipal and Zoning Appeals (BMZA). This turned out to be of no consequence to this case, which focused on the private agreement that controlled Roland Park.

The Moores filed an action in the Circuit Court for Baltimore City against the Association, but the circuit court ruled against the property owners. They appealed to the Court of Special Appeals.

The court found that the property was subject to the Roland Park covenants because the covenants “run with the land.” This is because the covenants “touch and concern” the land, the original parties intended for it to run with the land, there was privity of estate, and the covenants were in writing.

The court then found that the Board complied with the notice provisions of the Maryland Homeowners Association Act (the “HOA Act”), although the declaration is not subject to the HOA Act. The HOA Act only applies if a document imposes mandatory assessments, but the Roland Park declaration did not.

Lastly, the Court determined that the business judgment rule is applicable to actions by the Board. Therefore, decisions of the Board will not be set aside by a court in the absence of fraud, irregularity, or arbitrary action – none of which the court found. Instead, the court agreed that the Board’s decision was reasonable, as it was based on the development of the neighborhood. Accordingly, the Court of Special Appeals affirmed the judgment of the circuit court and denied the Moores’ request.

For questions, please contact Ed Levin (410) 576-1900.