Case Scenario: The Homeowners bought a parcel of land within a lake community. The ARC guidelines required that the homes be constructed with material found locally and that the design reflect the natural aesthetic of the area and the existing homes and environment. The ARC guidelines did not specify what materials were acceptable for use and the ARC had broad discretion to determine what was considered appropriate material. The Homeowners decided to build a deck at the back of their house, facing the lake, and included in their plans their intention to do so. Once their plans were approved by the ARC, they began construction. The Homeowners decided to use pressure treated wood for its durability which made it ideal for building on a lakefront.  However, after the deck was more than half completed, the ARC informed the Homeowners that the pressure treated wood did not match the aesthetic of the other homes’ decks when being viewed from the lake. However, the Homeowners' contractor had just completed a home two houses down using pressure treated wood for their deck, to which the ARC made no comment. The Homeowners filed suit stating that the ARC’s decision was unreasonable, arbitrary and capricious, and not made in good faith.¹ The court found that the ARC did not have a reasonable basis for its decision and awarded the Homeowners $600,000 plus attorneys’ fees totaling $250,000.