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

Holding:  The Supreme Court of Vermont held that a homeowners association, as assignee from the developer, could charge lot owners for its reasonable costs to maintain the subdivision private roads and water system, including litigation and other overhead costs.

The Facts:  A 92 lot subdivision in Vermont was developed in the 1960s. The subdivision contained private roads and a private water system that was to be maintained by the developer. Owners/Purchasers of the lots were granted the right to use the private roads and water system, and a service fee for said use was imposed.

In 1998, maintenance of the private roads, streetlights, water system, and recreational facilities was turned over from the developer to a homeowners association (the “Association”). The Association continued to charge the homeowners a service fee to maintain these parts of the subdivision per the relevant subdivision deed, which included litigation and overhead costs.

In 2009, a Homeowner Plaintiff alleged that the service fee was unreasonable and refused to continue paying. Continue Reading Owner Responsible for Share of Costs to Maintain Subdivision Facilities

The Business Judgment Rule can be a great protection for condo and HOA boards—but only if the board is following the documents.

Facts.  The Declaration for an HOA stated that the Board had the discretion to raise the “maximum annual assessment” without a vote of the homeowners as long as it was “in an amount equal to 150% of the rise, if any, of the [CPI] for the preceding month of July.” Higher increases required the vote of the homeowners. The Association’s Bylaws contained a formula for calculating this “maximum annual assessment” raise, but the formula allowed the Board to accumulate the CPI increases year over year in calculating the maximum assessment. The Board followed the Bylaws formula, and owners sued, contending (1) that the increase to the maximum annual assessment was higher than the Board had authority to do under the Declaration; and (2) that the Bylaws formula conflicted with the Declaration. The HOA Board argued that it exercised good Business Judgment in following the Bylaws formula. Continue Reading How is the Business Judgment Rule Applied to Board Actions?

A defense owners can raise if the Board claims the owner has violated the rules is “selective enforcement,” meaning the Board arbitrarily picks on some violators and not others. In addition, owners oftentimes like to rely on approval given by one board member, taking that as “Board approval” of the owner’s actions.  The case below tackles both of these issues, in the context of a dispute over an owner’s installation of hard-surface flooring.

Facts.  In a 2017 case, an owner who lived in an upper-level condominium unit replaced her carpeting with laminated flooring.  The problem is, the Association’s Declaration prohibited the installation of any flooring other than carpet, without prior Board approval. The owner had not received approval from the Board prior to installation of the flooring, but she did allegedly have an email exchange with the Board president wherein he said it would be ok. Continue Reading Hard-Surface Flooring in Upper Units—A Lesson in Selective Enforcement and Officer’s Authority

In Welsh v. McNeil, 162 A.3d 135 (2017) a board member and unit owner (“Board Member”) sued another unit owner (“Landlord Unit Owner”) for violation of the Association documents claiming that the Landlord Unit Owner violated the leasing provisions by allowing someone (the “Tenant”) to occupy the premises who was not on the lease.  The lease was only to an unincorporated entity, and did not name who would be occupying the premises.  Before suit was filed the Landlord Unit Owner and Tenant asked the Board to waive the bylaw provision as a reasonable accommodation under the Fair Housing Administration (“FHA”) to afford recovering alcoholics an equal opportunity to use and enjoy a single family dwelling of their choice. Continue Reading Can Your Association End a Unit Owner’s Suit by Post-Suit Filing Actions?

A Court in Colorado recently dealt with a developer who placed a provision in the declaration of a condominium association prohibiting amendment of the declaration – ever – without the declarant’s written consent, and requiring that all construction defect claims be resolved through arbitration (Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, Inc. (395 P.3d 788)). Continue Reading Developers Sometimes Draft Documents for Their Own Benefit

A Court in Louisiana recently tackled the issue of short-term rentals (New Jax Condominium Association, Inc. v. Vanderbilt New Orleans, LLC, 219 So.3d 471). A Condominium Association adopted an amendment to its bylaws during its annual meeting prohibiting short term rentals. When a Unit Owner continued to engage in short-term rentals, the Association sued and received a permanent injunction, preventing the Unit Owner from continuing to engage in short-term rentals. The Unit Owner appealed, alleging that the amendment to the bylaws was invalid because certain board members had conflicts of interest, and because one board member changed his vote during the voting. Continue Reading Banning Short-Term Rentals

A Maryland Court recently ruled on the extent of powers a Condominium Board had in dealing with a unit owner who was delinquent in assessments (Elvation Towne Condominium Regime II, Inc. v. Rose, 162 A.3d 1027). The Association at issue adopted a policy by which delinquent unit owners would be deprived of their right to enjoy certain common elements – namely the pool and parking of the Association. When they suspended those rights for the delinquent unit owner, the unit owner filed suit alleging the policy was unlawful, since the Association’s declaration did not provide for the Board to withhold common element use rights. Continue Reading Delinquent Owners – Withholding Access to Common Elements

A Court in Arizona recently provided one more reason for your association to have a fine schedule and late fee policy (Turtle Rock III Homeowners’ Association v. Fisher, 2017 WL4837821 and 2017 Ariz. App. LEXIS 187). This particular Homeowners’ Association (“HOA”) required their owners to maintain their property in various ways relative to cleanliness and attractiveness, via the HOA’s declaration. The declaration allowed the HOA to assess daily fines if the violations were not corrected. The HOA sent a particular owner 90 separate notices but started fining the owner less than 30 days from the relevant notice. Continue Reading Does Your Association Need a Fine Schedule and Late Fee Policy? Yes!

In a recent case out of New York (Board of Mgrs. Of 325 Fifth Ave. Condominium v. Continental Residential Holdings LLC, 139 A.D.3rd 472 (2017)) a condominium board signed a broadly worded document, releasing the developer and multiple other developer-related entities and their “heirs, executors, administrators, successor and assigns” from claims associated with the construction and design of balconies and their related structures.  The Board then sued some of the developer-related entities and individual members of the entities under “alter ego” and “pierce the veil” theories. Continue Reading Thinking of Signing a Release? Do Your Homework