Even though most private residential Associations are not subject to the Americans with Disabilities Act (the “ADA”), the Fair Housing Act (the “FHA”) still applies and protects owners who have service animals. In some cases, the Association has the right to ask the owner for documentation supporting the need for a service animal, but not always…and the case below illustrates how pressing for documentation when the Association is not entitled to it can end up being quite costly for the Association.
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Frequently we are asked about either inconsistent association documents or advised that although our documents say X we have always done Y so won’t our past precedent control? The answer is NO.  Your documents control.  You must follow what your documents say, unless there is something in them that is illegal or against public policy. This same point is continually stressed by the courts around the country.
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For years the FDCPA (Fair Debt Collection Practices Act) has been used as a sword by debtors and debtors attorneys as a means of exacting revenge from those creditors attorneys who failed to strictly, and I mean STRICTLY, follow every small detail of the law. It reached the point that one court called it a “cottage industry” for debtor’s attorneys.

The FDCPA was so difficult to comply with, that even the Federal Circuit Court (the 7th Circuit) in one of its opinions literally included in the opinion the language that it recommended that debt collectors (including attorneys) use in order to comply with the FDCPA.  Unfortunately, even the letter that they wrote within the opinion failed to comply with one aspect of the FDCPA illustrating how difficult compliance can be.
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Harbour Island Condominium Owners Association, Inc. v. Alexander, No. B285755 (Cal. Ct. App. Jan. 24, 2019)

Summary

In Harbour Island, the Court of Appeals of California held that tenants renting a unit that was part of a condominium association did not have standing before the board concerning meeting attendance and fines imposed for violations. The association did not have to give the tenants an opportunity to be heard, unlike the rights of actual unit owners.
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Becker Boards Summit, LLC v. Summit at Copper Square Condominium Association – 2018 WL 6695279 ( 2018 Ariz.)

Issues:  The court in this case addressed two important issues:

  1. Can a Developer, before turnover, amend a Declaration to convert Common Element to Limited Common Element for the benefit of a Developer Unit?
  2. Can Developer contracts entered into before turnover be voided after turnover?


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IMPRESSION: Unit owners who initiate litigation over common elements do not necessarily recoup attorney fees from the association—even when their lawsuit is successful, and benefits the association as a whole.

DETAILS: A shared sewer system in Adams County, Wisconsin, was the focus of a recent dispute between the Sunset Condominiums at Northern Bay Owners Association (“Sunset Condo Assoc.”), and a unit owner of the Sunset Condominiums. Larson v. Castle at the Bay, LLC, 2018 WI App 71, 384 Wis.2d 633, 2018 WL 5307100.  Prior to 2013, the area’s local sewage system was mutually utilized by neighboring developments Timber Shores and Castle at the Bay—despite being considered a common element of Sunset Condominiums.  In 2013, Castle at the Bay declared partial ownership of the sewer system, and proceeded to impose a usage fee upon Sunset Condo Assoc. Rather than respond by threatening litigation, the Sunset Condo Assoc. chose a two-tiered amicable and less expensive approach: (1) agree to shared ownership of the sewer system; and (2) consent to Castle at the Bay’s obligatory usage fees. 
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Master v. Country Club of Landfall, — S.E.2d — (2018)

Issue

Does due process require a hearing before an impartial tribunal (Board)? NO!!!

The Facts

Masters was a member a private golf club within his HOA. The golf club (“Club”) sought to make significant changes to its bylaws. Masters opposed the changes and wrote and sent a series of emails to other members claiming the proposed changes were unethical and immoral.  Specifically, within the emails Masters “made references to Hitler, Barabbas, Jesus and slavery.”  After several Club members complained, the Board concluded that Master’s actions were “insulting and inappropriate and had no place within the Club.” As a result they voted unanimously to terminate his membership.  In accordance with the Rules the president referred the matter to a hearing panel.  Master’s was given notice of the hearing and although he did not appear, his attorney did attend and argued for “suspension” instead of termination, but did not ask any members to recuse themselves. The hearing panel voted to terminate Masters membership and he filed suit.
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Eith v. Ketelhut, — Cal.Reptr.3d — (2018)

The Facts

Homeowner bought home in 2003.  In 2005 they planted a vineyard consisting of 600 plants on around .4 acres after obtaining approval of the Board’s Architectural Committee to their landscape plan that included the grape vines.  The CC&R’s (Covenants Conditions and Restrictions) specifically prohibited that “No lot shall be used for any purpose (including any business or commercial activity) other than for a residence of one family…”  The first wine harvest was in 2008 and the owner began selling the wine in 2009.  In a good year he would produce 720 bottles of wine.  Neighbors objected and when the Board did nothing, they filed suit seeking declaratory and injunctive relief claiming that the Board breached its fiduciary duty and to prohibit the owner from operating their business.  At trial the owner admitted that “the sale of wine is a business,” that the vineyard “operates like a business” and that “this was a hobby.”  The owner also testified that he filed IRS Schedule C for the vineyard, which is entitled “Profit or Loss of Business (Sole Proprietor).”  Under the IRS rules you would not file Schedule C if the business was only a hobby 
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Courts across the country have been hearing cases about short-term rentals of homes and condominium units, and there is not much consistency in the decisions made. Sometimes, it is the homeowners’ association that is trying to enforce its covenants in a manner that prohibits short-term rentals, and sometimes it is a municipality trying to enforce its zoning ordinances.  In the two cases discussed below, we have one of each—and in both cases, the language of the covenant and the ordinance made all the difference.
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