Iowa court orders an outbuilding torn down — and leaves covenant fines undecided
Iowa court orders an outbuilding torn down — and leaves covenant fines undecided
2026-09-10 · Iowa · Courts
An Iowa golf-course subdivision got an order tearing down a backyard structure, a $100-a-day charge running until compliance, and its attorney fees on appeal. The owner's two best legal arguments were never decided, because they were not preserved. United Properties Investment Company, L.C. v. Kratzer, No. 25-0497, was decided by the Iowa Court of Appeals on June 10, 2026.1
The facts
Bryan Kratzer and Becki Moore own a home in The Ridge at Echo Valley in Norwalk, abutting the Echo Valley golf course. The development and the course are commonly controlled. The lots are bound by a Declaration of Covenants, Conditions, Restrictions and Easements requiring architectural review committee approval for all improvements, imposing a fifty-foot setback for lots abutting the course, barring signage without ARC permission, and barring anything that distracts from or diminishes play.
From 2021 Kratzer displayed political signage. In August 2022 he began building a backyard outbuilding facing the golf cart path without submitting plans, and continued building through a cease-and-desist letter and the ensuing lawsuit. He later put up further signage facing the course, including a spray-painted “FU E.V. NOT TEARING THIS DOWN,” which drew member complaints and caused the operator to route tournament play and prospective-member tours away from those holes.
The district court found multiple covenant violations, ordered the outbuilding and a second shed removed, imposed $100 per day from May 10, 2024 until compliance as an equitable charge and continuing lien, and awarded $24,000 in attorney fees.
What the Court of Appeals decided
It affirmed the violation findings on de novo equitable review, deferring to the district court's credibility determination that the developer's representative was more believable than Kratzer on the claim of verbal permission.
The setback exception is narrow. The covenant's twenty-foot exception applies only to in-ground pools and detached garages, not to accessory buildings generally. The structure sat twenty to twenty-seven feet from the line, so the fifty-foot setback was violated.
Fees follow to the appeal. The court awarded a further $12,717.25 in appellate fees under the covenants' lien-and-obligation provision, applying Bankers Trust Co. v. Woltz, 326 N.W.2d 274, 278 (Iowa 1982): a fee clause not expressly limited to trial fees also reaches appellate fees. The $24,000 trial award was remanded for the district court to rule on three unaddressed billing objections.
The record title holder was properly dismissed. Under an installment land sale contract, equitable ownership passes to the vendee and the vendor holds legal title as security and as trustee for the purchaser (Junkin v. McClain, 265 N.W. 362, 365 (Iowa 1936)). The title holder's interest is not implicated by the vendee's covenant violations.
Publication status: we could not confirm a National Reporter citation, so whether this opinion is published — and therefore controlling under Iowa R. App. P. 6.904(2)(c) — is unconfirmed.
The two arguments that were forfeited
This is the part of the decision that matters most, and it is the part a summary of the outcome would miss entirely.
The quorum defence. The owners argued the ARC lacked its required three members — so compliance with an approval requirement was impossible or impracticable. The court would not reach it, because it was never raised and ruled on below. That is a serious argument about whether an approval precondition can bind when the approving body does not exist, and Iowa has no answer to it from this case.
The penalty argument. The owners argued a court sitting in equity cannot impose a penalty untethered to actual loss, and that “reasonable monetary fine” language is an unenforceable penalty. Error was not preserved. The court expressly rejected an attempt to import criminal and contempt “void sentence” doctrine into a breach-of-contract dispute — but that is a rejection of the framing, not a ruling on the merits.
So: the daily charge survived on preservation grounds. Iowa has still not decided whether covenant fines are enforceable or void as penalties.
Anyone reading this case as blessing daily fines is over-reading it, and an Iowa association that adopts an aggressive fining schedule on the strength of it is building on a question the courts have not answered.
What the case does establish for associations
Architectural covenants are enforceable in equity, and removal is available. Not damages, not a fine in lieu — an order to take the structure down. That remedy is the one owners tend to discount and it is the one that was granted.
Continuing to build through a cease-and-desist letter did not help. The chronology in this opinion runs from an unsubmitted plan through a cease-and-desist to continued construction during litigation, and the equities followed it.
Read your fee clause for what it does not limit. Under Woltz, a fee provision that is silent about appellate work reaches it. That cuts both ways — it is an association advantage here, and it is the mirror image of Holmstedt, where a clause was confined to its context. The lesson from both is the same: the clause's own words and placement decide.
Sue the contract vendee. Where a lot is held on an installment contract, the association's claim runs against the equitable owner, and the record title holder is not a necessary party. That is a clean practice rule worth knowing before a petition is drafted.
For owners: preservation is not a technicality
Two potentially strong defences disappeared because they were not raised and ruled on in the district court. An argument that exists only on appeal does not exist.
The related point is about the record. The verbal-permission claim failed on a credibility determination, and appellate courts defer to those. A permission that is not in writing is, functionally, a permission that has to survive someone else's contrary testimony.
The signage question nobody litigated
Worth noting what is not in the holding. The declaration barred signage without ARC permission and barred anything distracting from play, and the profane signage features prominently in the facts — but the decided grounds are the unapproved structure and the setback. A covenant restriction on sign content raises questions this case did not have to reach, and did not.
We describe the holdings and the open questions. We do not predict how any particular enforcement action or fining schedule would fare, which would depend on that community's documents and its facts.
What to watch next
The enforceability of covenant fines under Iowa law is the live gap, and it will stay open until a case reaches an Iowa appellate court with the penalty argument properly preserved. Given how routinely Iowa declarations authorise monetary charges, that case is a matter of time.
The quorum question is the second gap, and the more immediately practical one: Iowa associations that have let architectural committees fall below their required membership are relying on an approval requirement whose foundation has not been tested.
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