Summary

Even where homeowners characterize their claims against an Association as civil rights violations, the claims involved in the parties’ rights under the declaration, and the declaration’s attorney’s fees provisions applied.

Facts

In 2011, David Merritt, a former HOA board member, and his wife, Salma, sued their Sunnyvale HOA, Classics at Fair Oaks (Classics), as well as three of its board members. The dispute centered on the Association’s covenants, conditions, and restrictions (“CC&Rs”) involving parking restrictions at the Classics. The HOA’s parking policy requires residents to pay for and obtain a permit for each vehicle parked on the street versus in the garage of each residence. The Merritts had a two-car garage, but only parked one car inside it. They argued that they can only park one car in the garage, because Salma is disabled, and needs additional space to enter and exit the vehicle when it is parked inside the garage.
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Summary

If your Association excessively fines an owner, expect a court to find a way to penalize the association.

The Facts

In 2004 Mr. and Mrs. Mills (“Mills”) bought a home in the subdivision called Galyn Manor.  In 2007 Galyn Manor began fining Mills for a commercial work vehicle parked in their driveway in violation of the association rules.  Galyn Manor advised Mills that the fines would be $50 for each day that the commercial vehicle was parked on their property.  By the end of 2007, the fines amounted to $645.  In January of 2008, the association hired the Andrews Law Firm (“Law Firm”) to collect the fines.  Between 2008 and May of 2015 many demands for payment were made, and many payments were made.
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Summary

Not following ALL of the required procedures when preparing amendments to your association governing documents can be VERY expensive.  Take the time, money and effort to do it right.

The Facts

In 2015 the board for Forest Lakes Master Association distributed notice that it would be holding a vote to amend its voting procedure at its annual meeting.  The board and property manager alleged that they had received the required votes for the amendment.  Because of some interesting counting techniques, the number of votes in favor of the amendment kept rising.  One owner, Johnson, emailed the board and stated that he believed the board failed to follow proper voting procedures and that the amendment did not pass.  After counting the votes, Johnson confirmed his belief that the board had violated the voting procedures in their documents.  Johnson demanded that the Board find the voting procedure void.  When the board refused Johnson filed suit.  Both parties moved for summary judgment and the association also asked for attorney fees.
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Summary

If smoking is otherwise allowed in your association, you do not need to ban it as a reasonable accommodation for a person with asthma.

The Facts

Phyllis Davis suffers from asthma but lives in a condominium complex that allows residents to smoke in their units.  Davis claimed that the smoke from a neighboring unit aggravated her asthma.  Davis is a cancer survivor with “a history of asthma and multiple chemical sensitivity disorder.”  When the association didn’t ban smoking in her building she sued alleging that the association had discriminated against her by not granting her reasonable accommodation request to ban smoking in her building thereby violating the Fair Housing Act because of her disability.  Davis also alleged a nuisance claim under the bylaws.
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Summary

Declarant owned nine of 10 units, controlled the board and association, failed to have an association bank account, intermingled the assessments that were paid into his business account, never held elections or annual meetings and kept no separate corporate records.  Yet, the Court held that these failures could not be used as an excuse for not paying assessments that were due under the condominium documents.  In other words, you bought into an association, pay your assessments.
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Summary

An entity that ultimately bought the prior interests of the declarant learned the hard and expensive way that not perfectly following the documents can be very costly.

The Facts

Property owners brought action against declarant and their associations seeking a declaratory judgment that declarant was not a proper successor declarant and requiring the alleged declarant to pay assessments they otherwise would have been exempt from paying.  The property owners claimed that the defendant had not validly obtained declarant rights and therefore had wrongfully claimed the unilateral right to appoint the directors of the homeowners’ associations.  The property owners also claimed that they did not owe the assessments because: the right to levy assessments was vested in the associations’ boards of directors; the boards were never duly elected or were otherwise illegally constituted; and in the absence of properly constituted boards, the associations lacked authority to impose the assessments and record the liens at issue.  At the heart of the issue was a foreclosure on a couple of loans against the original declarant followed by a number of subsequent transfers of the declarant rights and the property.  Both parties moved for summary judgment.
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Summary

A 79-unit condominium association held a meeting to remove the directors from office and elect new ones. The president objected to the meeting, the procedure and the notice, but since the association followed the documents and had more than half of the unit owners vote for the removal, the directors were removed.
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As Condominium and HOA attorneys, we often receive questions from our clients dealing with all the issues that can get in the way of conducting a successful annual meeting. Most often, it is the issue of not being able to achieve a quorum of owners in attendance—which stymies the Association’s ability to hold Board member elections, approve the budget, and take other important actions to further the HOA’s business for the coming year.  So what happens if an Association’s Bylaws calls for annual board elections, but the Association does not hold elections for a number of years?  Is there a Board? Does the Board have any authority? A recent case addressed these issues, and the court’s findings might surprise you.
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Disgruntled unit owners love to review their association documents and then demand every document that they think they might be entitled to.  In this case, the court made clear that reasonableness and discretion will play some part in what must be provided.

The Facts

In December of 2014 the Plaintiff sought to inspect the Associations records, including the:

  1. December 2012 and 2013-2014 bank statements;
  2. General ledger from 2013-2014;
  3. Specific 2013 and 2014 invoices;
  4. Official communications between the Association board members and the New Mexico Office of the State Engineer (OSE);
  5. 2012 and 2014 end of fiscal year and year-end balance sheets;
  6. 2012 and 2014 profit and loss reports;
  7. December 2014 accounts receivable aging report; and
  8. December 2014 open invoices report.

The Association was incorporated in 1973 in New Mexico. Plaintiff wanted to inspect the records because she was concerned over the increase in unpaid dues owed the Association and the Board’s financial reporting.

The Board produced most of the records, but “did not produce for inspection the bank statements, the general ledger, invoices, the accounts receivable aging reports, an open invoice report, and communications between board members and the OSE.”
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