Rules

Please join Husch Blackwell’s Condominium & HOA Law Team on February 5, 2021, as we outline the NEW 2020 Robert’s Rules, how parliamentary procedure should be used to run meetings more efficiently, some case examples of fine issues that arise and how to solve them, some basic collection reminders relating to death, trusts and mortgages and why your Rules matter more than you think. We hope this will be both interactive and fun while we share the latest information that homeowner associations (HOAs), condo boards and managers need to know. Looking forward to 2021 and making things as straightforward as possible. Continue Reading Association Academy: Your Rules, Robert’s NEW Rules and Court Rules Relating to Fines

Facts

A dispute arose between four condominium associations within a master association as to obligations to pay for the maintenance, repair and upkeep of a roadway easement.  The road connected the four condos and other properties.  The master deeds for each association were recorded in the 1970s.  In 2013, Plaintiff, Bayberry Group, Inc. (“Bayberry”) sought an agreement to share the costs of the road.  As a result, a Common Area Maintenance Agreement (“CAM Agreement”) was created.  The CAM Agreement covered the road and the “lawns and entirety of any … landscaping in the roadway easement.”  A majority of the associations in the master association executed the CAM Agreement, but the four defendant associations did not.  The defendants also refused to pay their share of the fees under the CAM Agreement.  Bayberry filed suit alleging the road easement is a general common element of each of the associations.  Defendants answered denying any road easement as a common element. Continue Reading Road Maintenance – Who Pays? (Duties under Association Documents and Case Law)

Grill Fire
Facts

Defendant, Acacia on the Green (“Association”), is a 273-unit condominium in Ohio.  The Association has a common grilling area because the Association bans grills on patios and balconies because of, among other things, the fire code.  Weiss and Phillips, two Unit Owners, wanted grills on their patios: Weiss asked for a grill and demanded a grill repeatedly over a five-year period and was denied.  Weiss was then diagnosed with lymphoma, had to undergo chemotherapy, and learned he had an immune deficiency.  Weiss took medication for his lymphoma, but did not use a cane or other mobility aid.  Despite his ability to walk, Weiss claimed he had episodes when he was only able to walk a few steps within his unit.  In 2018 Weiss sent a letter from his doctor to the Association Board which stated:

The accommodation for Mr. Weiss to have a grill on his patio is necessary due to his disability from cancer and CVID.  These two diseases substantially affect Mr. Weiss’s ability to walk.  The accommodation will give him full use and enjoyment of his unit.

Phillips also claimed to be handicapped and in need of having a grill on her patio.

When both Unit Owners’ requests were denied, they sued alleging that their requests to have gas grills on their patios was reasonable and imposed little, if any, burden on the Association.  The complaint also alleged that the denials caused a “disruption to their full enjoyment and use of their respective dwellings,” as well as emotional distress. Continue Reading YES Associations Can Deny a Request for a Reasonable Accommodation Under the FHA and WIN!!!

Fiduciary Duty
Facts

Plaintiff, Ms. Carmichael, is on the board of directors of Commerce Towers Condominium (“Association”).  On the board with her is Mr. Frese and Mr. Vickers.  Mr. Vickers, Mr. Frese and Mr. Tarantino are the officers of the Association. (collectively “Officers”).  All three are also the officers of Tarantino Properties, Inc. (the “Management Company”). Carmichael and other unit owners (collectively “Owners”), individually and on behalf of the Association, sued the Officers and the Management company for breaches of fiduciary duties and for unjust enrichment because the Officers caused the Association to provide for the maintenance and preservation of property that was not part of the Association (the retail space of the buildings).  The Officers and Management Company asserted that the Owners did not have standing to sue on behalf of the Association (a derivative suit). Continue Reading Self-Dealing by Director is a Breach of Fiduciary Duty (Case 2)

Virtual Meetings

Most condominiums and homeowner associations (HOAs) are nonstock corporations under Wisconsin Chapter 181.  As such their members can make decisions one of three ways:

  1. Holding a meeting;
  2. Action by written consent (181.0704 Wis. Stat.). This may be used unless “limited or otherwise provided in the articles of incorporation or bylaws…”  For an association to act by written consent, the action must be “approved by members holding at least 80 percent of the voting power, or a different percentage, not less than 50 percent, specified in the articles of incorporation or bylaws.”  The written consents must be signed and dated after the date of the last meeting of the members and kept with the minutes
  3. Action by written ballot (181.0708 Wis. Stat.) This may be used “if permitted by the articles of incorporation or bylaws, any action that may be taken at an annual, regular or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter, the ballot sets for the proposed action and provides an opportunity to vote for or against the proposed action.”  “Approval by written ballot … valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.”

Continue Reading Condo and HOA Virtual/ZOOM Meetings in Wisconsin – How Legal Are They?

Fiduciary Duty
Facts

Plaintiff, Coley, owns a home in an HOA, the Eskaton Village (“Association”).  Two other Eskaton named entities (“Eskaton”) develop and support HOAs.  A five-member board runs the Association, subject to the Declaration.  Eskaton has always controlled three of the five directors on the Association Board because it owns 137 of the 267 units.  The three directors are always employees of Eskaton and are “financially incentivized to run the Association for the benefit of Eskaton.”  In short, the better Eskaton performs the higher their compensation, which is directly related to the expenses of the Association.  Coley, one of the other two directors, filed suit because of various acts by the other directors to benefit their employer at the expense of the Association, including disclosing attorney client privileged communications. Continue Reading Self-Dealing by Director is a Breach of Fiduciary Duty (Case 1)

Dog by Pool
Facts

Plaintiff, Cohen (“Tenant”) and Defendant, Clark (another tenant, “Clark”) leased separate apartments in the same building on the same day, July 21, 2006.  Both leases prohibited pets in the building or on the premises.  Tenant picked the apartment in part because of its no pet policy, as she had a severe allergy to pet dander that caused her to carry an EpiPen to protect against anaphylactic shock.  A month after entering into the lease, Clark requested an emotional support dog as a reasonable accommodation.  Clark provided the landlord with a letter from his psychiatrist stating that he had mental illness that impaired his ability to function.  The psychiatrist recommended that for his well-being he own and care for a dog.  The manager advised the tenants of the request and asked if any had allergies.  Tenant responded providing detailed information relative to her pet allergy.  The manager contacted the Iowa Civil Rights Commission (“ICRC”) and requested it to review the matter.  “The ICRC’s housing provision is nearly identical to the Federal Fair Housing Act (FHA).” The ICRC told the manager that Clark could not be moved to another building as that was unreasonable and that the manager had to attempt to accommodate both issues (Clark’s pet and the Tenant’s allergy).  The manager had them use separate stairwells.  Tenant had allergic reactions such that she seemed to have a permanent cold and her throat swelled at times. Continue Reading Another Helpful Emotional Support Animal Case

Thank you to all who attended our FIRST EVER virtual Association Academy!  We had record-breaking attendance by property managers and board members.  If you missed it, don’t fret, we recorded it for you, and you can access at any time.

To view the recording click HERE.  We reveal the 10 commandments of what association management “Shalt Not” do while governing. Covering the basics of what homeowner associations (HOAs), condo boards and managers need to know. We also dive into the nitty gritty of assessment collections.

Vacant Land
Summary

The language and definitions in your governing documents reflect the intentions of the Association.  You need to either follow them or amend them, but NOT ignore them.

Facts

Sunnyside Resort Condominiums is a private resort property located on Lake Gogebic in Gogebic County, Michigan, and governed by the Sunnyside Resort Condominium Association, Inc. (SRCA).  In 2006, the Plaintiffs purchased vacant lots within SRCA with an individual value of $13,000.  Unlike other lots, the Plaintiffs’ lots, among other things, lacked improvements to the property, utilities, and septic systems.

Assessments on Vacant Lots.  Although the Plaintiffs’ lots were free from any structures, Plaintiffs were charged assessment fees despite the association documents essentially providing that the Plaintiffs were not required to pay association assessment fees until a structure was built on the lot.  In part this was due to the fact that the percentages of value for the units were calculated based on several factors including, market value, size, and allocable expenses for maintenance. Plaintiffs stopped paying the monthly assessment fees for their two units in July 2015. Continue Reading Vacant Land Units Can Have a 0% Percentage Interest

Money Exchange
Summary

Earlier this year, I blogged on the case of Johnson v. Board of Directors of Forest Lakes Master Association, 454 P.3d 623 (2019) unpublished (Kansas) and explained how improperly passing and/or filing amendments can be VERY expensive. This is true in every state, and today we learn of another way that amendment errors can be costly.

The Facts

The developer created the condominium in 2008 that authorized the development of 109 units in a seven-year period.  The initial phase consisted of 33 units and through properly filed amendments the developer authorized another 18 units, for a total of 53 units.  Before the expansion time passed, the developer had sold 48 of the 53 units.  The day before the development period was to expire in 2015, the developer recorded two amendments to the deed to add 56 partially completed units.  In the initial 2018 case, the association argued and won, the court finding that “the final number of the units in the Condominium was fixed at 53 and that no additional units could thereafter be phased into the Condominium without the vote of the then existing 53 unit owners…” The association then argued that the unbuilt and partially completed units were part of the common area owned by the owners of the completed units, thereby significantly affecting the five mortgages that existed on these partially completed units.  The five mortgagees and developer took the opposite position, as otherwise the mortgages would be subordinate to the master deed and declaration of trust of the association.  It is undisputed that at the time of the sale of each of the 48 units, the mortgagees released its interest in all the common area. Continue Reading Improper Amendments Are VERY Expensive