Master v. Country Club of Landfall, — S.E.2d — (2018)

Issue

Does due process require a hearing before an impartial tribunal (Board)? NO!!!

The Facts

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.
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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.
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Some states have statutes that require that Associations provide a notice and opportunity to be heard to a resident before the Association can fine them for a violation of the governing documents. Even though Wisconsin does not have such a statute, providing residents a notice of the alleged violation and opportunity to give their side of the story is an important component of providing due process—which will help make your fines ultimately enforceable.
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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.
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An owner violates the rules. The Board assesses fines to the unit owner.  Will the fines hold up in a court of law? In this case, they did—and your Association can take note of what this Court says the HOA did right.

Facts.  In a 2017 case, an owner who lived in a subdivision with an HOA planted bamboo in their yard, which then spread and infested a neighboring owner’s yard and some common areas.  When the owner failed to remove the offending plants after notice, the HOA Board started to fine the owner, rather than to exercise “self-help” and take care of the bamboo infestation for the owner. 
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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.
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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.
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An association in southeast Wisconsin consists of plots of land upon which the various unit owners can park a mobile home or trailer. Under the association documents, unit owners cannot be in the trailer more than 60 days between October and April or a $10,000 monthly fine will be assessed.  A unit owner owed more than $13,000 in fines in addition to unpaid monthly assessments.  When the unit owner continued to refuse to pay, the association started foreclosure on its lien. 
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Noise coming from adjacent units is a common problem. It can be caused by many things, including music, instruments, appliances, running, jumping, or a myriad of other causes.  Our advice has almost always been that if you have a rule, you need to enforce it uniformly against all.  However, with noise, it is often difficult to determine what is too loud and what is simply an over-sensitive neighbor.  To combat some of the noise issues, many associations require second floor and above units to have carpeted floors.  For those who want hardwood or tile, it is sometimes permitted provided the plans are pre-approved by the board.  These plans then often require soundproofing to be placed between the two floors.
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A condominium association in the Milwaukee area was owed more than $2,000 in fines by one unit owner. For more than a year, the unit owner had been fined numerous times due to the same violations of the bylaws which the unit owner refused to correct.  While the unit owner paid assessments monthly, the unit owner ignored the fines and the association’s attempts to demand that the unit owner correct the violations.
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