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This is too Much

Facts

Montana Developer of three condominium-hotels at Big Sky Ski Resort sold units subject to Declarations that required “all unit owners to use [Developer], or an agent designated by [Developer], as their exclusive rental agents,” when renting out their condominiums.  The Declarations also provided that “Unit owners may decline to renew the rental management contract with [Developer] after three years, but only if 75% of unit owners vote to end the contract with [Developer].”  Of course, Developer also owned all of the commercial units, which constituted 22% of the voting units, and several residential units, practically making it impossible for 75% of the unit owners to do anything that the Developer didn’t want.…

Continue Reading Claims for When Developers Have TOO Much Control of Association

Money House

Facts

Developer recorded a Declaration in 2001 for the 260 Jamie Lane Condominium Association (“Association”) consisting of nine units in what seemed to be one building, with an allocation of the percentage interests based on the square feet of each unit.  Like most Declarations, it provided that “[e]ach Unit Owner shall pay his proportionate share of the Common Expenses … in the same ratio as his percentage of ownership…” with corresponding lien rights if the payment was not made.  The Developer sold five of the units in 2001 upon apparently completing a building within the Association.  The Developer filed an amendment to the Declaration and Plat which stated that the building where the five sold units were, was complete and describing “the proposed units for a different building to be constructed on Lot 1.”  The Developer continued to own the four uncompleted units.  The Association at some point began assessing the Developer for the four unbuilt units, and when the Developer refused to pay, the Association placed a lien on the unbuilt units. …

Continue Reading Developer Liable for Assessments on Unconstructed Units

Assignment
Facts

Seaside is an 80-acre development in Florida.  In the 1980’s the developer recorded declarations for nine separate neighborhood associations.  The language in each of the declarations are identical, providing the association with “the right to enforce, by any proceedings at law or in equity, all restrictions, conditions, covenants, reservations, liens and charges now or hereafter imposed by the provisions of this Declaration.”  In 1991 the nine neighborhood associations amended their declarations and formed the Seaside Town Council (“Manager”) to “[a]ssume management of the administration and operations of the Association.”  Sometime thereafter the developer amended the Manager’s code and acted unilaterally to operate the architectural review committee of the associations in violation of the Manager’s code.  In 2011 the nine associations then voted to have the Manager file a lawsuit against the developer to protect their rights and to “assign “to Manager” the right to otherwise prosecute this lawsuit on their behalf.”  The Manager then sued the developer for various alleged violations of the declarations.  The developer answered the complaint. …
Continue Reading Association Can Assign Enforcement Authority to a Manager

Bike Accident
Facts

The plaintiff, James Schnurr, and his wife were riding their bicycles in the Jonathan’s Landing community when Mr. Schnurr struck a bollard that was installed just before the promenade they were riding along crossed a roadway.  Mr. Schnurr fell off his bicycle and fractured his neck.  He became a quadriplegic as a result of the accident.  At trial, several experts testified that the bollards were difficult to see because the Association had painted them beige, so they blended into the background. There were also no pavement markings to warn pedestrians on the promenade that they were approaching the bollards.  Mr. Schnurr and his wife sued the Association, which had a duty to maintain the promenade in its governing documents.  The Schnurrs did not sue Jonathan’s Landing, Inc., the developer of the community.
Continue Reading Condominium Association Liable for Construction Defect it Had a Duty to Maintain

Empty Street
Facts

Developer subjected property to the condominium act in Massachusetts in 2008.  By the terms of the deed, it included all the “land and improvements at the property…”  There were to be six wings and up to 109 units built over a period of seven years.  When the deed was recorded, 33 units had already been constructed.  The additional wings were shown on the plans and noted on the master deed as “presently constitute common areas and … may be completed as additional phases.”  The declaration contained a reservation of developer rights that provided the developer seven years to “substantially complete the additional phases” and that a failure to complete them would constitute a waiver of development rights. The day before the developer rights were to expire, the developer recorded a series of documents to expand its ownership rights and extend the development rights an additional seven years.  Sixteen days after the documents were recorded the association filed suit.  The association sought declaratory relief that the developer’s rights had expired and that the developers attempts to extend those rights was invalid.  The developer answered and counter-claimed that it was in the right.
Continue Reading Expiration of Developer Rights – What Happens to the Land where Units were Not Constructed

Buyer Beware
Facts

This case involved a dispute between the owner/operator of a golf course and the owners of adjacent property in a residential community.  Originally all the land was owned by one entity, that then sold lots overlooking the golf course at a premium.  The deed for the property in the residential community described the property by reference to the lot and the recorded subdivision plat that included a map of the subdivision depicting a golf course.  The plat map was recorded with the county.  The developer later transferred the golf course to another entity.  The purchaser, CE, was losing money on the golf course and proposed to develop the land.  The adjacent property owners sued.  The property owners and CE filed cross motions for summary judgment.
Continue Reading Implied Easements – Can You Prohibit a Neighboring Property Owner from Changing the Use of its Property?

Asphalt Road
Facts

Plaintiffs are property owners in what were originally three separate planned communities known as Mystic Lands.  Defendants are the developer/declarant and its sole shareholder, Shinitzky.  In October of 2006 the Plaintiff and his wife entered into a contract with declarant to purchase Lot 28 in Mystic Ridge.  The Property Information Sheet stated “the streets throughout Mystic Ridge are private and shall be maintained by the … Association.  The initial capital expense for the streets, including the asphalt, shall be bourne (sic) by the Developer.”  Shinitzky said this statement represented the intention of the Developer and that other similar representations meant “asphalt paved roads.”  However the deed described the lot by reference to the plat which stated “ALL INTERIOR ROADS ARE 14’ GRAVEL.”  Developer did pave some of the roads in Mystic Ridge as the development progressed, but in 2013, for the first time, Shinitzky stated in a Property Disclosure Statement that the roads “would be gravel.” …
Continue Reading Developers/Declarants Breached Contract by Failing to Pave Roads

Defect
Facts

Plaintiff, Brooktree Village Homeowners Association, Inc. (“Association”), filed suit “on behalf of itself and on behalf of its members” in May 2017 against the second developer, Brooktree Village, LLC (“Developer”).  Developer had acquired the remaining undeveloped portions of the development, other than the common areas.  “A construction company affiliated with Developer, Rivers Development, Inc. (“Builder”), completed construction of the development.  Developer sold all the newly constructed townhomes to individual homeowners.”  The Association sought damages for the cost of repairs.  The claims asserted by the Association were breach of implied warranty, negligence, and negligence per se.
Continue Reading Developers/Declarants are Liable for Implied Warranties to Association for Construction Defects

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)

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)