## Facts

- A developer recorded a plat for a sub-area of a residential subdivision and simultaneously recorded restrictive covenants in 1984.
- The 1984 covenants applied to the sub-area lots, expressly prohibited keeping sheep, and contained no amendment or revocation procedure.
- After four lots were sold subject to the 1984 covenants, the developer recorded (1) an instrument purporting to revoke the 1984 covenants as to the remaining unsold lots and (2) a new set of covenants recorded in 1989 purporting to apply to those remaining lots.
- The four original lot owners did not consent to the purported revocation or to the 1989 covenants.
- Dunne and the Warners later purchased lots after the 1989 covenants were recorded; their deeds stated the lots were subject to both the 1984 and 1989 covenants.
- The homeowners association permitted the Warners to keep sheep on their property in connection with training sheepdogs.
- Dunne sued to enforce the 1984 covenants’ sheep prohibition and to challenge the effectiveness of the developer’s attempted revocation and the 1989 covenants.
- The trial court granted partial summary judgment for the association, developer, and other defendants; Dunne appealed.

## Issues

1. Whether a developer may unilaterally revoke or materially modify restrictive covenants that lack any reserved amendment or revocation clause after lots have been sold in reliance on those covenants.
2. Whether later purchasers whose deeds reference both the original and later covenants may enforce the original covenants, including a sheep prohibition.
3. Whether the recorded instruments and deed references created interpretive or factual disputes about which covenants applied to particular lots, making summary judgment improper.

## Decision

- The Colorado Court of Appeals affirmed in part, reversed in part, and remanded with directions.
- The court held the developer lacked unilateral authority to revoke or materially change the 1984 covenants to the detriment of purchasers who acquired lots in reliance on a common plan, given the absence of any reserved amendment/revocation power.
- The court concluded that deed references to both the 1984 and 1989 covenants supported, at minimum, a triable dispute about continued applicability and enforceability of the 1984 restrictions on later-conveyed lots.
- The court reversed summary judgment to the extent it treated the 1989 covenants as superseding the 1984 covenants as a matter of law on the disputed enforcement questions, and remanded for further proceedings; other portions of the trial court’s rulings were left intact.

## Legal Principles

- Recorded restrictive covenants implemented as part of a common plan, once relied upon by purchasers, create enforceable property interests benefiting and burdening affected lots.
- Absent an express, recorded reservation of power to amend or revoke, a developer may not unilaterally revoke or materially modify restrictive covenants after sales have occurred in reliance on them.
- Where later recorded documents and deeds reference both original and later covenants, the instruments may preserve original restrictions or create ambiguity requiring fact development; summary judgment is improper if material interpretive disputes remain.
- Lot owners subject to a common-interest covenant scheme generally have standing to seek declaratory and injunctive relief to enforce restrictions against other lots within the scheme.

## Conclusion

The court limited a developer’s post-sale ability to change subdivision restrictions by holding that, without a reserved amendment mechanism or affected owners’ consent, the developer could not unilaterally undo or materially alter the original covenants, and it required further proceedings to determine how the overlapping recorded covenants and deed references affected enforceability of the sheep prohibition on particular lots.


Dunne v. Shenandoah Homeowners Ass’n, Inc., 12 P.3d 340 (Colo. App. 2000)