House & Magnifying Glass
Issue

Does a homebuilder need Association approval of its plans?  NO, unless the condominium documents require it.

Facts

The plaintiff was the builder, Canyon Custom Home Builders (“Builder”).  The defendant was Somerset Condominium Association, Inc. (“Association”).  The Builder wanted to construct on eight vacant lots/units.  The entire Association consisted of 37 units.  Although some units could have single family homes on them, the Builder lots/units were designated for multi-family buildings.  Under the condominium documents the Board was empowered to take various actions, including “to create certain rules for the ‘maintenance, conservation and beautification’ of the Condominium property and the health, comfort, safety, and general welfare’ of the Condominium property’s occupants.”  In 1997 the Association approved an Architectural Control Committee (“ACC”), with the minutes of the meeting reflecting an intent to amend the declaration.  The Board did not amend the declaration to reflect the ACC’s adoption.  In 2012 the Association amended the ACC Guidelines.  The Builder, because the declaration had not been amended, argued it could build whatever was not expressly prohibited by the declaration.  The Association argued that the Builder was seeking to construct multi-family buildings and the 2012 Guidelines are entitled “Guidelines For Single Family Homes and Lake Front Condominium Remodeling and New Construction.”  Builder was not looking to build either single family homes or lake front condominiums. Continue Reading Architectural Control Through Rulemaking Authority is Proper IF YOUR DOCUMENTS ARE PROPERLY WRITTEN

Business Conflict
Facts

The defendant, Lennar Homes developed Martinique at Oasis, a residential community located in Homestead, Florida comprised of 241 homes.  Lennar Homes sold each of the homes in the community to individual homeowners.  Each of the purchase agreements between Lennar Homes and the homeowners contained an arbitration provision, which required the parties to submit any dispute arising out of the sale of the property, including any alleged property damage, to arbitration.  About five years after the first homes were sold, the plaintiff, the Homeowners Association, began noticing potential construction defects in the stucco, stone cladding, and decorative shapes on the exterior of the buildings.  The Association sued Lennar Homes in Florida trial court on behalf of all unit owners in Martinique at Oasis, alleging the issues were caused by defective construction. Continue Reading Homeowner’s Associations Suing on Behalf of Homeowners Must Abide by Arbitration Provisions

House Tape Measure

Many condominium and homeowners associations (HOAs) have an architectural control committee (ACC).  Oftentimes, the Board of Directors assumes the role of the ACC rather than having a separate committee.  Where the governing documents give the Board/ACC discretion over proposed architectural/exterior changes within the association, what are the limits to that discretionary power?

Facts

In a recent court of appeals case from the fall of 2021, intervening homeowners who were neighbors to a home subject to years-long litigation with the HOA appealed a trial court’s dismissal of their attempt to intervene.  These homeowners were disgruntled because they did not like the settlement that was ultimately reached between their neighboring homeowners and the HOA. Continue Reading Architectural Control and your Community Association—Limits on the Discretion of the Board

Assignment
Facts

Seaside is an 80-acre development in Florida.  In the 1980’s the developer recorded declarations for nine separate neighborhood associations.  The language in each of the declarations are identical, providing the association with “the right to enforce, by any proceedings at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration.”  In 1991 the nine neighborhood associations amended their declarations and formed the Seaside Town Council (“Manager”) to “[a]ssume management of the administration and operations of the Association.”  Sometime thereafter the developer amended the Manager’s code and acted unilaterally to operate the architectural review committee of the associations in violation of the Manager’s code.  In 2011 the nine associations then voted to have the Manager file a lawsuit against the developer to protect their rights and to “assign “to Manager” the right to otherwise prosecute this lawsuit on their behalf.”  The Manager then sued the developer for various alleged violations of the declarations.  The developer answered the complaint. Continue Reading Association Can Assign Enforcement Authority to a Manager

Bike Accident
Facts

The plaintiff, James Schnurr, and his wife were riding their bicycles in the Jonathan’s Landing community when Mr. Schnurr struck a bollard that was installed just before the promenade they were riding along crossed a roadway.  Mr. Schnurr fell off his bicycle and fractured his neck.  He became a quadriplegic as a result of the accident.  At trial, several experts testified that the bollards were difficult to see because the Association had painted them beige, so they blended into the background. There were also no pavement markings to warn pedestrians on the promenade that they were approaching the bollards.  Mr. Schnurr and his wife sued the Association, which had a duty to maintain the promenade in its governing documents.  The Schnurrs did not sue Jonathan’s Landing, Inc., the developer of the community. Continue Reading Condominium Association Liable for Construction Defect it Had a Duty to Maintain

Parked Cars
Facts

The parties to this suit both reside in a condominium association.  Each party owns a unit, and each has parking spaces.  The dispute is over the fact that when the Grudziecki parks their car in their parking spot, even within the lines, it is difficult, if not impossible, to access the ramp to the garage entrance and elevator area from the left side.  As a practical matter, unit owners who wish to access the elevator area must walk to the right side of the ramp when Grudziecki is parked there.  The Greenbergs, whose parking spaces are directly across from Grudziecki’s spot, wanted the court to order that that Grudziecki pull the car forward or move farther toward the left side of the parking space so that they could enter the elevator area from the left side, instead of being “forced to walk around the right side of the ramp, which is farther away from their parking spaces.”  Mrs. Greenberg is disabled and requires the use of a walker and entering from the left would save Mrs. Greenberg a few steps.  When the matter could not be resolved, the Greenbergs filed suit. Continue Reading Just Because a Resident Has a Disability, an Accommodation May Not Be Reasonable

Security Cameras

Facts

The plaintiff, Jody Goldstein, was beaten and robbed, resulting in serious, permanent injuries while staying as a guest at the Chateau Orleans, a combination hotel, timeshare, and condominium facility located in the French Quarter in New Orleans.  The defendant, Leisure Management, Ltd. maintained and operated the Chateau.  Upon arriving at the Chateau, the plaintiff informed management that there was a large crack in the center of the door to his unit.  The manager on duty told Mr. Goldstein that the door would be replaced, but it never was.  Further, there were no staff members or security personnel present at the Chateau at the time of the break-in.  The only security measures the management company had in place were cameras, a gate to access the property, and spike-topped gates around the Chateau. Continue Reading Managers of Condominiums Who Know or Should Know of Security or Safety Concerns May be Required to Engage in Enhanced Security Measures

Association Academy.220325

Thank you to all who attended the Husch Blackwell Condominium & HOA Law Team virtual Association Academy on March 25, 2022.  We covered what’s new with the Fair Debt Collection Practices Act (FDCPA), collections and the new mortgage underwriting requirements..  No need to worry if you missed it, we recorded it for you, and you can access at any time.

To access the recording click HERE.

Empty Street
Facts

Developer subjected property to the condominium act in Massachusetts in 2008.  By the terms of the deed, it included all the “land and improvements at the property…”  There were to be six wings and up to 109 units built over a period of seven years.  When the deed was recorded, 33 units had already been constructed.  The additional wings were shown on the plans and noted on the master deed as “presently constitute common areas and … may be completed as additional phases.”  The declaration contained a reservation of developer rights that provided the developer seven years to “substantially complete the additional phases” and that a failure to complete them would constitute a waiver of development rights. The day before the developer rights were to expire, the developer recorded a series of documents to expand its ownership rights and extend the development rights an additional seven years.  Sixteen days after the documents were recorded the association filed suit.  The association sought declaratory relief that the developer’s rights had expired and that the developers attempts to extend those rights was invalid.  The developer answered and counter-claimed that it was in the right. Continue Reading Expiration of Developer Rights – What Happens to the Land where Units were Not Constructed

Fiduciary Duty
Facts

In 2014, Kato purchased a unit at an association, thereby becoming a member of the association. Kato also joined the board and became its President/Treasurer.  Later that year, Kato’s unit, and two other units in the association were destroyed by fire.  The association collected the insurance proceeds from the loss, but decided not to rebuild.  Kato was the president was president at the time and remained president until 2020.  Three years later the association entered into a “Confidential Settlement Agreement” (“CSA”) with the three units for their fire losses, and as part of that agreement was obligated to pay Kato $30,500.  The payment was to be made in installments and until the last payment was made Kato would:

“maintain all rights detailed in the By-Laws of [the Association]. On the other hand, the Members shall omit any responsibilities related to fees (such as maintenance fees) detailed by the By-Laws of [the Association]. When the settlement amount for each Member [has] been paid in full, the Members shall forfeit all rights and responsibilities[ ] granted by the By-laws, related to the units mentioned in the foregoing.”

Two years later, in 2019, while Kato was still president, the association sued Kato for allegedly stealing “hundreds of thousands of dollars from the Association.”  In January of 2020 Kato was removed as an officer and director of the association.

Six months later, Kato sued the manager, board members, attorney for the association, and the association claiming the officers and directors had breached their fiduciary duties, that the attorney had engaged in deceptive trade practices and seeking an order prohibiting the association from paying the management company or allowing the management company to take any action on behalf of the association.

Two months later, on September 10, 2020, the association tendered to Kato the last of the payments due him under the CSA.  “Kato refused to deposit the check.” Continue Reading Former Association Member Can’t Sue for Breach of Fiduciary Duty