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

Facts

In May of 2016 the Association implemented a rule that allowed owners to bring furniture to the pool area for their use “but they must remove these items daily when they leave the pool area.”  Unit Owner claimed he needed a reasonable accommodation to leave his orthopedic lounge chair at the pool for medical reasons.  The Association initially allowed the chair to be left at the pool, but also requested further clarification of the request, specifically seeking: 1) a doctor’s recommendation that the chair was medically necessary for the owner’s physical disability, 2) confirmation that the chair he was using was in fact an orthopedic lounge chair, and 3) the weight of the chair.  The unit owner submitted three doctor letters:

  • Doctor 1 stated the Unit Owner’s “disability required the “use of an appropriate chair to accommodate his disability.”
  • Doctor 2 stated that he recommended that the Unit Owner “use an orthopedic lounge chair for his neck and back issues and also that he not lift ‘equipment or materials over 15 pounds.’”
  • Doctor 3 stated that the Unit Owner’s “anti-gravity chair helps his prostate condition.”

The Association took the position that the doctor letters did not clearly address the Unit Owner’s situation or the need for a certain type of chair, and then rescinded the initial accommodation.  The Association did state that it would reconsider the matter if the Unit Owner submitted all requested documents.
Continue Reading Residents are Not Owed Preferred Accommodations for Disability

Facts

Plaintiffs live in Ashbrooke Property Owners Association (“Association”) and missed their annual assessment payments of $115 for three straight years.  The Association hired Defendant, Equity Experts, to collect the past due amounts.  Under the Declaration the past due assessments accrued interest at the rate of 18% per annum, plus the Association could charge a late fee and the Owner was “liable to the Association for all costs and attorney’s fees…”  Equity Experts added fees for their constant contact package and their Pre-Foreclosure package in the amount of $750 and $1,495 respectively.  In December of 2013, Defendant advised Plaintiffs that their balance was $3,199.60, but that if they did not pay within 10 days the balance may be at least $6,644.60.  Plaintiffs filed suit seeking class certification because the interest rate charged exceeded the amount allowed under Georgia law and because the demands were in excess of sums allows under the Association documents.
Continue Reading Class Action Status Granted to Association Homeowners Alleging FDCPA Violations

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?