When you are headed down the wrong path – TURN BACK. This applies to owners and associations when they act on their belief of what their documents say, but then learn that their understanding may be wrong. Often parties who make a mistake, or learn that they might have made a mistake, refuse to reevaluate their situation and at least allow turning back to be an option. Such appears to have been what happened in the recent case of Fritz v. Lake Carroll Property Owners Association, Inc., (2019 unreported case out of Illinois) where the association passed a rule that required inspection and pumping of the owners privately owned septic system every four years and that if an owner failed to follow the rule they would be fined $250 and $25 per day. After failing to follow the rule and being fined, Mr. Fritz contended many things, but from the case it appears that his initial contentions were 1) that the association had “no power over septic systems on private property…”, 2) that the board did not have authority under the covenants and 3) that the board breached its fiduciary duties to Fritz. In addition to these two contentions, presumably as things may have seemed not to be falling in his favor, Fritz also contended that:
4) State regulations only allow association authority over homeowners pump septic systems when the system exceeds specific criteria;
5) Case law did not give the board authority to adopt the rule;
6) The bylaws may not have been properly recorded;
7) The bylaws cannot supersede the covenants which required the association to perform the required maintenance and then bill the owner, not fine him; and
8) The covenants were ambiguous.
The trial court ruled in favor of the association and Fritz appealed.
The Court of Appeals ruled against Fritz on every one of his arguments and affirmed the trial court’s decision. As part of that decision the court held that rules need not be recorded and that where the covenants specifically allow for power in bylaws, “and the bylaws provide the authority for the board to enact rules” it will not say that the rule was improperly enacted or lacked the necessary authority.
Almost all Declaration and Covenants allow for the board to adopt rules. Sometimes they do require the rules to also be approved by the owners, but most times not. Regardless, since the recorded documents allow for rules to be adopted, absent some other contradiction with the statutes or other association documents, they will be enforced, if reasonable, by the court.
If you have any questions, please feel free to contact the Husch Blackwell LLP Condominium and HOA Law Team.