The Condominium Statutes are written such that associations can collect their actual attorneys’ fees if they proceed in a lien enforcement action for unpaid assessments. But, as in many things law-related, there are traps for the unwary, and if your attorney is not savvy, you may miss out on collecting everything you are owed…

Facts.  In a 2017 case, a unit owner was delinquent in paying assessments and the Association hired an attorney to file a lawsuit against the owner seeking collection of the assessments.  The attorney filed suit, seeking a “breach of contract” cause of action against the owner, since he violated the portion of the condominium documents that says owners must timely pay assessments. The attorney was successful in getting a judgment in favor of the association for the unpaid assessments, but when he asked the court for an award of his attorneys’ fees, the Court’s answer was no.
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The Business Judgment Rule can be a great protection for condo and HOA boards—but only if the board is following the documents.

Facts.  The Declaration for an HOA stated that the Board had the discretion to raise the “maximum annual assessment” without a vote of the homeowners as long as it was “in an amount equal to 150% of the rise, if any, of the [CPI] for the preceding month of July.” Higher increases required the vote of the homeowners. The Association’s Bylaws contained a formula for calculating this “maximum annual assessment” raise, but the formula allowed the Board to accumulate the CPI increases year over year in calculating the maximum assessment. The Board followed the Bylaws formula, and owners sued, contending (1) that the increase to the maximum annual assessment was higher than the Board had authority to do under the Declaration; and (2) that the Bylaws formula conflicted with the Declaration. The HOA Board argued that it exercised good Business Judgment in following the Bylaws formula.
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Condominium associations generally have a number of legal remedies to pursue when an owner stops paying assessments. An Ohio court recently found that associations may collect assessments as they come due during a lien foreclosure action by and through a court-appointed receiver.

Facts.  In a 2017 case, an investor owner of a condominium unit, who had a rent-paying tenant living in the unit, failed to pay a special assessment to the association. The association filed a lien for the unpaid special assessment and started a lien foreclosure action. While the foreclosure action was in progress, the association also asked the court to appoint a receiver who would collect the rents from the tenant, as well as the current assessments as they come due. The unit owner argued that having the receiver collect assessments was a stretch of the statute, which only allowed a receiver to collect “reasonable rental” during the pendency of a foreclosure action.
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A defense owners can raise if the Board claims the owner has violated the rules is “selective enforcement,” meaning the Board arbitrarily picks on some violators and not others. In addition, owners oftentimes like to rely on approval given by one board member, taking that as “Board approval” of the owner’s actions.  The case below tackles both of these issues, in the context of a dispute over an owner’s installation of hard-surface flooring.

Facts.  In a 2017 case, an owner who lived in an upper-level condominium unit replaced her carpeting with laminated flooring.  The problem is, the Association’s Declaration prohibited the installation of any flooring other than carpet, without prior Board approval. The owner had not received approval from the Board prior to installation of the flooring, but she did allegedly have an email exchange with the Board president wherein he said it would be ok.
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An owner violates the rules. The Board assesses fines to the unit owner.  Will the fines hold up in a court of law? In this case, they did—and your Association can take note of what this Court says the HOA did right.

Facts.  In a 2017 case, an owner who lived in a subdivision with an HOA planted bamboo in their yard, which then spread and infested a neighboring owner’s yard and some common areas.  When the owner failed to remove the offending plants after notice, the HOA Board started to fine the owner, rather than to exercise “self-help” and take care of the bamboo infestation for the owner. 
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In a 2017 New York case, a dispute arose over what authority the Association had to perform landscaping maintenance on an individual homeowner’s lot (Minkin v. Board of Directors of Cortlandt Ridge Homeowners’ Association, Inc., 149 A. D.3d 723 (2017)).  When the owner refused to pay the assessment for the landscaping services, the Board started assessing fines.  The owner sued the Board.  The New York Supreme Court (the lowest level court in New York) decided that the Board did have the authority to perform the landscaping services on the front lawn and the homeowner was required pay the assessment as well as the fines.  Unfortunately for the Association, there was also a larger issue dealing with the work performed and assessed on the side and rear of the house.  The problem was that the Board and managing agent could not provide backup or evidence for exactly what work was done in each area, and accordingly, the assessments and fines were not upheld in those areas.
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A Court in Colorado recently dealt with a developer who placed a provision in the declaration of a condominium association prohibiting amendment of the declaration – ever – without the declarant’s written consent, and requiring that all construction defect claims be resolved through arbitration (Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. (395 P.3d 788)).
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A Court in Louisiana recently tackled the issue of short-term rentals (New Jax Condominium Association, Inc. v. Vanderbilt New Orleans, LLC, 219 So.3d 471). A Condominium Association adopted an amendment to its bylaws during its annual meeting prohibiting short term rentals. When a Unit Owner continued to engage in short-term rentals, the Association sued and received a permanent injunction, preventing the Unit Owner from continuing to engage in short-term rentals. The Unit Owner appealed, alleging that the amendment to the bylaws was invalid because certain board members had conflicts of interest, and because one board member changed his vote during the voting.
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A Maryland Court recently ruled on the extent of powers a Condominium Board had in dealing with a unit owner who was delinquent in assessments (Elvation Towne Condominium Regime II, Inc. v. Rose, 162 A.3d 1027). The Association at issue adopted a policy by which delinquent unit owners would be deprived of their right to enjoy certain common elements – namely the pool and parking of the Association. When they suspended those rights for the delinquent unit owner, the unit owner filed suit alleging the policy was unlawful, since the Association’s declaration did not provide for the Board to withhold common element use rights.
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A Court in Arizona recently provided one more reason for your association to have a fine schedule and late fee policy (Turtle Rock III Homeowners’ Association v. Fisher, 2017 WL4837821 and 2017 Ariz. App. LEXIS 187). This particular Homeowners’ Association (“HOA”) required their owners to maintain their property in various ways relative to cleanliness and attractiveness, via the HOA’s declaration. The declaration allowed the HOA to assess daily fines if the violations were not corrected. The HOA sent a particular owner 90 separate notices but started fining the owner less than 30 days from the relevant notice.
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