Attorney Daniel Miske was recently quoted in a Community Association Management Insider Article, “‘Continuous Operation’ Language Declaration Requires Association to Keep Lift Working“:

Lessons for Community Associations

Associations would be wise to review their governing documents to determine whether the documents impose similar strict obligations.

“If the declaration and bylaws put a duty

Facts

In 2016, a Master Association adopted seven amendments to its declaration.  The amendments addressed the Master Association’s authority to approve proposed uses of certain buildings, increased assessments on them, and imposed additional restrictions on those buildings’ tenants.  In response, the building’s prior owner (“Building Owner”) filed suit against the Master Association and eight individual directors and officers, seeking six forms of relief: (1) a declaratory judgment concerning the legality of the amendments; (2) damages for tortious interference with a business relationship; (3) damages for breach of fiduciary duty; (4) an accounting; (5) a temporary injunction; and (6) a permanent injunction.
Continue Reading Amendments to Condominium Documents MUST be Reasonable to be Valid

Facts

The property was subject to a discriminatory restrictive covenant recorded in 1953 that stated: “No race or nationality other than the white race shall use or occupy any building on any lot, except that this covenant shall not prevent occupancy by domestic servants of a different race or nationality employed by an owner or tenant.”  In 2017 Plaintiffs obtained the property by deed referencing that the deed was subject to covenants.  Plaintiff then filed suit to “have the discriminatory restrictive covenant declared void and to ‘strike that same subsection from public record and eliminating it from the title of the property.’” 
Continue Reading Covenants that Discriminate on Race – ARE STILL A PROBLEM

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)

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)

Facts

Plaintiffs were two owners (Maples and Brown) at Compass Harbor Village Condominium Association in Maine (the “Association”) who had purchased their respective units sometime in 2007.  The Declarant was an LLC that held more than 50% of the votes (15 of the 24 units) and therefore controlled the board.  For many years the Association common areas were not property maintained in many ways.  In addition, the Association failed to hold meetings, take votes on Association matters, maintain banking or other records and refused to provide financial information to the owners.  The Declarant’s position was that “because it holds a majority of the voting power in the Association and therefore any dispute between it and any of the unit owners would ultimately be decided in its favor.”  Plaintiffs claimed to have lost about $53,000 in value in each of their units because of the actions of the Declarant.
Continue Reading Failing to Maintain and Properly Collect Assessments is a Breach of Fiduciary Duties

Facts

Diane Steele owned a home in the Diamond Farm development, which was managed by the Association. While in accordance with the Association’s declaration of covenants, conditions and restrictions, the Association must obtain at least two-thirds of the members’ total votes to increase annual assessments, assessment increases in 2007, 2011, and 2014 did not receive the requisite two-thirds vote for approval. Consequently, Steele ceased making payments. The Association brought suit seeking unpaid assessments and attorney’s fees. Steele’s defense was that she did not owe dues for the amounts of increases imposed without the supermajority required under the Declaration of Covenants.
Continue Reading Can Homeowners Sue an Association for Increasing Assessments Where the Association Did Not Receive the Requisite Votes Required?

Declarant/Developers of Community Associations love to reserve themselves rights within the Declaration that extend far beyond their Declarant control powers.  This is nothing new.  But when a Homeowners Association puts it foot down, who will end up on top?  It depends on how all the sections in the Declaration read together, and as this case shows, ambiguity does not favor the Declarant.

Facts

In a 2019 case, a court had to interpret the Declaration governing an HOA (subdivision) and determine who was right.  The Developer, after turning over control to the homeowners, sold the final lot to a buyer with a planned home that did not fit the specifications of the Declaration.
Continue Reading Post-Turnover Declarant Rights? Think Again…This One has a Happy Ending for the HOA

Developers of condominium communities and HOAs often reserve access easement rights within the Declaration/Deed Restrictions for the subdivision, especially when the Developer owns yet-undeveloped neighboring property. But what happens if the Developer forgets to reserve such easement rights specifically within the Declaration or Deed Restrictions? A recent case explores this dilemma, and at least in this case, the HOA owners come out on top.

Facts

In a 2019 case, some lot owners within a subdivision, which had been advertised as a private, gated community, sued the Developer for trying to enforce an access easement he had for the main road within their subdivision. The Developer claimed he needed access to that main road in order to develop the neighboring lots behind the gated community.  The Developer also believed he could grant access to the owners of the neighboring lots through the gated community. 
Continue Reading HOAs Unite! Developer’s Easement Rights are Not Never-Ending