Unjust Enrichment

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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

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)

This is Too Much
Summary

When faced with the question of how much is too much for a “reasonable fee” the US Court of Appeals for the 7th Circuit held that it could not answer the question because the right parties were not before the court.

The Facts

Keith Horist owned a condominium in downtown Chicago building’s condominium association. Joshua and Lori Eyman also owned a condominium in Chicago, but at a difference association. Both associations hired Sudler Property Management to manage their day-to-day operations.

In 2017 Horist and the Eymans put their units up for sale and found buyers. …
Continue Reading How Much Can an Association Charge for Providing Disclosure Documents as Part of a Sale?

Paying the Bill

IMPRESSION: Unit owners who initiate litigation over common elements do not necessarily recoup attorney fees from the association—even when their lawsuit is successful, and benefits the association as a whole.

DETAILS: A shared sewer system in Adams County, Wisconsin, was the focus of a recent dispute between the Sunset Condominiums at Northern Bay Owners Association (“Sunset Condo Assoc.”), and a unit owner of the Sunset Condominiums. Larson v. Castle at the Bay, LLC, 2018 WI App 71, 384 Wis.2d 633, 2018 WL 5307100.  Prior to 2013, the area’s local sewage system was mutually utilized by neighboring developments Timber Shores and Castle at the Bay—despite being considered a common element of Sunset Condominiums.  In 2013, Castle at the Bay declared partial ownership of the sewer system, and proceeded to impose a usage fee upon Sunset Condo Assoc. Rather than respond by threatening litigation, the Sunset Condo Assoc. chose a two-tiered amicable and less expensive approach: (1) agree to shared ownership of the sewer system; and (2) consent to Castle at the Bay’s obligatory usage fees. …
Continue Reading Stuck with the Tab: Initiating Suit Over “Common Elements” Without Association Approval can Lead to Unit Owners Covering Unexpected Attorney Fees

The answer to the question of when are fees unreasonable is simple: when a court says they are.  Fairfield Ridge Homeowners Association (association) is an HOA in Ohio.  The association entered into a management agreement with Elite Management Services, Inc. (EMS) to manage the association, including providing closing certification letters to sellers just before the closing on a sale.  EMS charged a unit owner $395 for these letters along with a $100 fee if they needed expedited service.  The association declaration provided that a “reasonable charge” could be assessed to a unit owner for these letters.  Ms. Barger viewed the $495 in charges as unreasonable and filed a class action suit against EMS.
Continue Reading When Are Fees Unreasonable?