Twenty years of unenforced covenants did not kill a 1969 subdivision's bill of assurance
Twenty years of unenforced covenants did not kill a 1969 subdivision's bill of assurance
2026-09-09 · Arkansas · Courts
A bank that owned a lot in a 1969 Greenbrier subdivision, got the city to rezone it commercial, and argued that two decades of unenforced covenants had killed the subdivision's bill of assurance, lost. On April 1, 2026 the Arkansas Court of Appeals affirmed a permanent injunction confining First Service Bank's use of Lot 23 to what the bill of assurance allows.1
The opinion is the strongest recent Arkansas authority on the defense every covenant enforcer eventually meets: you never enforced it before. It is published and therefore binding.
The subdivision
The Goodhaven Subdivision was platted in Faulkner County in 1969 — twenty-five lots, twelve of them fronting Highway 65 in Greenbrier. The recorded bill of assurance provided that no lot could be used for anything other than residential purposes, that no lot could be subdivided, that the instrument could be amended with the approval of at least 75 percent of the subdivision's landowners, and that any property owner could sue to enforce it.
Over the years eight lots were formally released by that 75 percent mechanism. One of them was Lot 12, where First Service Bank has run a bank for more than twenty-five years. Seven further lots were rezoned commercial by the city and used commercially without ever being released from the bill of assurance.
First Service also owns Lot 23, a long rectangular lot immediately behind the highway-fronting lots. At the bank's request the Greenbrier City Council rezoned Lot 23 from residential to quiet office or commercial in May 2023. The bank wanted to expand its corporate office. It had obtained the signatures required to release Lot 12; it did not obtain them for Lot 23. Its chief operating officer explained why in testimony the opinion quotes: “we did not feel that we were able or had to follow them because no one else had been following them for over 20 years.”
Two lot owners — Marsha and Gerald Snowden, and the Barbara Johnson Revocable Trust — sued within days of the rezoning. The Faulkner County Circuit Court permanently enjoined the bank. It appealed.
Four defenses, four answers
Abandonment. The bank's lead argument was that only ten of the original twenty-five lots remained noncommercial, so the general plan of development was gone. The court distinguished Moore v. Adams, the 1940 case the bank relied on, where restrictions had been imposed through a patchwork of individual deeds and there was “never a general plan to begin with.” Here a plat was filed with a bill of assurance, all lots carried the same restrictions, and — the pivotal point — “lots that were released were done so pursuant to the plan itself.” The court's answer to the bank's de-facto-mixed-use theory is a single sentence: “Formally releasing the eight lots demonstrates that the owners were, in fact, following the general plan.” As for the lots violating the covenants without a release, it quoted Jones v. Cook: “[T]he fact that other provisions of the original restrictive covenants may have been violated does not vitiate those covenants that have been maintained under a general plan of development.”
Waiver, laches and unclean hands
Waiver. “[T]he fact that earlier violations went unchallenged does not mean that a court sitting in equity must permit additional violations.” The court drew the distinction that decides most of these cases: “Acquiescence to longstanding nonconforming use might arguably bar enforcement to that particular use, but it does not automatically permit new nonconforming use.” The authority is Ingram v. Wirt (1993), which held that tolerating one violation does not waive the right to enforce against a subsequent, different violation on the same property.
Laches. It “might be a defense for the longstanding nonconforming landowners” — but it does not travel to a new nonconforming use. And it failed on its own terms: laches requires prejudice, and “First Service has not alleged any prejudice or detrimental reliance based on the inaction of the subdivision owners.”
Unclean hands. The bank pointed at the plaintiffs' own deviations — siding instead of brick, the trust owning two houses on contiguous lots. The doctrine requires a substantial breach of the same restriction, and those “alleged violations concern residential structures, whereas the restriction at issue here is the proposed commercial use of Lot 23.”
The bank's fallback — that it should at least be allowed to use Lot 23 as a driveway to the rear of Lot 12 — was not preserved. It had been raised in a summary-judgment motion that was denied, the final order was silent on it, and “[t]he denial of summary judgment is not reviewable on appeal; this is true even after a trial on the merits.”
What it changes for Arkansas associations and owners
Rezoning does not release a covenant. The city changed Lot 23's zoning; the bill of assurance was untouched. Public land-use permission and private covenant permission are separate systems, and obtaining one is not obtaining the other. That is worth stating plainly to any owner who arrives at a board with a rezoning approval in hand.
Following the amendment mechanism is evidence for the plan, not against it. This is the most useful and least intuitive holding in the case. Associations often worry that granting releases or variances erodes the instrument. Here the eight formal releases were the bank's best evidence of abandonment — and the court treated them as proof the plan was being administered exactly as written. A release granted through the recorded procedure strengthens the instrument. A violation tolerated outside it is the thing that creates risk.
Selective enforcement is survivable; it is not costless. The court did not say the seven unreleased commercial lots were fine. It said the plaintiffs' choice not to pursue those lots “does not mean that they may not seek to enforce the restrictive covenants now against First Service,” and it noted that their concerns were “directed less toward lots fronting the highway and more toward the encroachment of commercial use into the interior of the subdivision.” Geography did real work. An association tolerating violations at the edge of a tract retains its ability to resist a new violation at the centre — but the same use, in the same place, tolerated for long enough, may well be lost.
Enforcement did not depend on an association at all. Goodhaven has no property owners association in this record. The bill of assurance let “any property owner” sue, and two of them did. Arkansas subdivisions whose associations have gone dormant — a common condition where the developer left and nobody re-elected a board — are not thereby unprotected, if the recorded instrument grants individual owners standing. That is a drafting question worth checking in the recorded instrument before assuming covenants are dead.
What to watch next
The court affirmed on a clear-error standard after a bench trial, and the record mattered: photographs of noncompliant homes, testimony about where the commercial creep was headed, and the bank's own explanation that it skipped the release procedure deliberately. The next Arkansas case with a thinner record on the general plan — particularly one where the violations sit in the interior rather than the periphery — will test how far Snowden reaches.
Also worth noting for short-term rental and home-business disputes, where the recurring question is whether a “residential purposes only” clause still binds a subdivision that has drifted: this opinion says drift alone does not answer it.
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