Moretto v. Elk Point Country Club Homeowners Ass'n

The Supreme Court reversed the district court's grant of summary judgment with respect to Appellant's claim for declaratory relief and as to Appellant's accompanying violation of property rights claim, holding that public policy favors the adoption of sections 6.7 and 6.9 of the Restatement (Third) of Property: Servitudes.

At issue was the scope of a common-interest-community homeowners association's power to adopt rules restricting the design and use of individually-owned properties. In the instant case, Appellant argued that Respondent did not have any express power to adopt the architectural guidelines in question and argued that the district court should interpret an association's implied to adopt rules under Nev. Rev. Stat. Chapter 116 as being limited, consistent with sections 6.7 and 6.9. The district court ruled in favor of Respondent. The Supreme Court reversed, holding that this Court expressly adopts sections 6.7 and 6.9 of the Restatement (Third) of Property: Servitudes, the subject association possess the authority to adopt design-control restrictions for individually-owned property, but it must exercise that power reasonably. The Court remanded the case for the parties to address this issue.