Developer’s Rights – Reversed and Rendered

  • Benders Landing Estates Prop. Owners Ass’n, Inc. v. LGI Land, LLC
    • 09-16-00183-CV, 2018 WL 1188814
    • 284th District Court of Montgomery County
    • Justice Kreger, Mar. 8, 2018
  • The property owners association for the Benders Landing Estates community filed suit against LGI Land, LLC, the property developer. LGI executed a Declaration of Covenants, Conditions, and Restrictions for the community, which passed certain rights and powers from LGI to the POA.  The Assignment of Developer’s Rights, however, attempted to reserve some of those rights to LGI. The POA filed a motion for summary judgment arguing that the Assignment was an improper reservation of rights. Conversely, LGI filed a motion for summary judgment arguing that the Assignment was a valid and enforceable contract. The trial court  granted LGI’s motion.
  • The Ninth Court held that because “the Declaration contains an amendment provision governing the manner and mechanism for making changes, any amendment to that restrictive covenant must be in the ‘precise manner’ authorized by the Declaration.” The Ninth Court found that the Assignment constituted an attempt to amend the Declaration and did not comply with the “precise manner” for amendments as specified in the Declaration. The Ninth Court concluded the Assignment was void and rendered judgment in favor of the POA.