Most condominium associations’ Declarations and Bylaws give the Board of Directors the power to create and amend Rules and Regulations. But Boards must take caution, because Rules that are well-intentioned and that seem to make sense for your community may be found unenforceable by a court. Continue Reading That Rule we Just Passed is Enforceable…Right? Think again…
Harbour Island Condominium Owners Association, Inc. v. Alexander, No. B285755 (Cal. Ct. App. Jan. 24, 2019)
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. Continue Reading Tenants Due Process Rights are NOT the same as Owners Rights
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:
- Can a Developer, before turnover, amend a Declaration to convert Common Element to Limited Common Element for the benefit of a Developer Unit?
- Can Developer contracts entered into before turnover be voided after turnover?
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. Continue Reading Stuck with the Tab: Initiating Suit Over “Common Elements” Without Association Approval can Lead to Unit Owners Covering Unexpected Attorney Fees
Master v. Country Club of Landfall, — S.E.2d — (2018)
Does due process require a hearing before an impartial tribunal (Board)? NO!!!
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. Continue Reading Are Grievance Committees Impartial Enough?
Eith v. Ketelhut, — Cal.Reptr.3d — (2018)
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. Continue Reading When is a Business NOT a Business?
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. Continue Reading Short-Term Rentals—A Tale of Two Cases
Facts: The facts in the case of Forrest v. The Ville St. John Owners’ Association, Inc., No. 2018-CA-0175 (La. Ct. App. Nov. 7, 2018) are straightforward. In March of 2016 there was a fire. It damaged common element and the Forrest unit. The Association had two insurance policies: one for Property and one for Community Association Management Liability Coverage. The Property policy was issued by Lloyd’s of London. Lloyd’s paid on its policy, for both the common element and unit damages, but the funds were insufficient to repair the common elements and the unit. So the Association repaired the common elements.
Trial Court: The unit owner, Forrest, filed suit against the Association alleging breach of fiduciary duty and various other claims under state law. Continue Reading Insurance is NOT all the Same-Another Case Proving Why You Need an Insurance Committee
Castilian Hills Homeowners Association v. Chaffins, (Wash. Ct. App. Oct. 22, 2018)
Homeowner bought home in 2004. In 2016, the homeowner failed to pay his $147 assessment. The homeowners association (“HOA”) assessed a $20 late fee. The homeowner still did not pay, despite the normal language in the HOA governing documents about interest, the right to lien and reasonable attorney fees. After more notices, the HOA filed a lien for $525.52 and then a complaint against the homeowner seeking the $525, plus interest and attorney fees. The homeowner argued to the court that the HOA was “required by statute to provide notice and an opportunity to be heard” prior to filing a foreclosable lien. Continue Reading How to Turn $147 into $10,000 – the WRONG Way
Davis v. Echo Valley Condominium Association, No. 17-12475 (E.D. Mich. Nov. 7, 2018)
The Eastern District of Michigan court held that a smoking ban demanded by a disabled owner was an unreasonable accommodation for purposes of the Fair Housing Act since the measure was not approved by the owners, and the Association was powerless to impose a ban without an owner vote.
Plaintiff owned a Unit in the Echo Valley Condominium Association (the “Association”). Plaintiff complained to the Association that her neighbors smoked tobacco. She alleged that she could regularly smell it and that it exacerbated her existing respiratory health conditions.
Plaintiff informed the Association about her medical issues and asked the Association to address the smoking by creating a rule that all smokers in the Association should be required to seal gaps around doors and windows to prevent smoke from escaping. The Association declined to enforce a rule because neither the Association documents nor state law prohibited people from smoking in their homes. Continue Reading Smoking Ban Was An Unreasonable Request