Self-Help and Covenant Enforcement- Drawing a Line in the Sand

Frustrated board members often find themselves in a predicament: how far is too far in covenant enforcement?  Oftentimes, the governing documents of an association will allow the board to use self-help to enforce the covenants in a handful of situations.  For example, the covenants may state that if an owner refuses to maintain his or her yard the board may hire a landscaper to mow and then charge the owner for the service.  Unfortunately, boards sometimes go too far in seeking enforcement measures and step into the realm of vigilante justice.  This was the situation in a Florida case where the board of Palomino Lakes Subdivision literally blocked access to the subdivision on three occasions to prevent an owner from delivering what they thought was a mobile home.  Parton v. Palomino Lakes Prop. Owners Ass’n, Inc., 928 So. 2d 449 (Fla. Dist. Ct. App. 2006).

The covenants for Palomino Lakes prohibited mobile homes, but the owner was actually delivering a modular home, which was to be attached to a concrete slab and was permitted by the covenants.  By blockading access to the neighborhood, the board violated the covenants.  The owner later sued the association and the board members individually for breach of contract and injunctive relief. 

At trial, a jury determined that the owner was entitled to $5,000 in compensatory damages and punitive damages of $60,000 against one board member, $50,000 against another board member, and $40,000 against a third.  As the prevailing party, the owner was also entitled to reasonable attorney’s fees.

Board members should think twice before taking self-help measures and subjecting themselves to personal liability.  Always ensure that board actions are permitted by the governing documents.

This site and any information contained herein is intended for informational purposes and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

ADA Pool Regulations and Community Associations

In 2010, the Department of Justice (DOJ) issued revised requirements for the Americans with Disabilities Act (ADA) regarding accessible swimming pools.  In light of these new regulations, many community associations have approached me with questions regarding their association’s compliance.  This article seeks to address those concerns and provide a brief summary of the scope of the 2010 Standards for Accessible Design.

The ADA strives to provide equal opportunity to people with disabilities.  Title II of the ADA applies to state and local government services and Title III applies to public accommodations and commercial facilities.  The updated swimming pool accessibility provisions are intended to affect all newly constructed, altered and existing swimming pools with very limited exceptions.  However, privately owned community associations are generally not encompassed under the ADA. 


Title III defines a public accommodation as a facility owned by a private entity whose operations affect commerce. In order to fall under the purview of the ADA, a community association must be engaged in commerce.  This would include, by way of example, selling memberships to the general public, providing a place of lodging to the public (e.g. hotels, “condotels,” and resorts), offering swimming lessons to the general public, or hosting swim meets or events where the public is invited to access the pool.

           
If the community association is a public accommodation, there must be an accessible means of entry and exit on all newly constructed and altered swimming pools, wading pools and spas on or after March 15, 2012.  Existing pools must be brought into compliance to the extent that it is readily achievable on or after March 15, 2012.  This readily achievable standard takes into consideration financial constraints and overall feasibility.

                       
Larger pools, those with more than 300 linear feet of pool wall, are required to have two accessible means of entry, one of which must be a sloped entry.  Smaller pools are only required to have one accessible means of entry, which can be either a lift or a sloped entry.  Public accommodations also must consider maintenance and staff training as it relates to the accessible features.  Tax credits and deductions are available through the IRS for small businesses making these accessible means of entry.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Alcoholic Beverage Licences for Homeowners’ Associations

H. 3295 is a bill introduced in the House on January 12, 2011 and signed by Governor Haley into law on June 17, 2011. This bill authorizes homeowners associations to hold state licenses to sell alcoholic beverages. In order to meet the definition of a homeowners association under H. 3295, the association must be chartered as a nonprofit by the Secretary of State and “conduct[ ] a business bona fide engaged primarily and substantially in the preparation and serving of meals or furnishing of lodging.”  Prior to the enactment of H. 3295, the Department of Revenue ruled that homeowners associations were not entitled to alcoholic beverage licenses. 

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Risk Management Assessment for Condos and HOAs

Here is a link with tips on how to be sure you are covered by your association’s Directors and Officers (D&O) insurance.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Keeping the Reins: Beware of Underhanded Boards and Their Tactics to Remain in Power

Although the SC Nonprofit Code and the governing documents of an association maintain safeguards for fair elections, many boards are coming up with crafty ways to ensure re-election. An article in the Orlando Sentinel lists these as the most popular methods for power-corrupt boards to hold on to their seats:

1. Create a Nomination Committee, stacked with spouses and friends of the sitting board members. They plainly nominate the sitting board members – nobody else — and the ballot mailed out to the eligible voters will only contain the names of the “wanted” candidates, because the committee declares every other candidate who volunteers not fit to serve. Any owner trying to “nominate himself or herself as a candidate for the board at a meeting” has anyway no chance. The written mailed-in ballots already give the sitting board members the votes necessary for re-election.

2. HOA elections normally require a quorum of 30% of the total voting interests present in person or by proxy. 30% is quite a high hurdle, and the proxies collected by the board will only be used if it serves the advantage of the sitting board. It’s much easier to declare: “No quorum present” – therefore the old board is the new board.  Before anybody can object, the board and its supporters quickly leave the meeting room. Election won – no matter how many of the other owners complain about procedure.

3. Mail out general proxies, claiming these proxies only serve the purpose to fulfill the quorum requirements. But since they are actually made out as general proxies, they can be used by the board secretary to count as votes – if necessary.

4. Intimidation is another often used method to swing the election. Sitting board members go door-to-door to “collect” proxies with themselves named as proxy- holders. Especially the many elderly will often sign the proxy, just to live in peace. Violation letters and fines are the common threats used to “convince” the owners who are not voluntarily willing to sign over their voting rights!

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Proposed Gun Range in Posh Condo Penthouse

Here’s an article from the Balitmore Sun about a penthouse unit owner in the Baltimore Ritz-Carlton Residences seeking to obtain a permit to build a gun range inside the unit.  Condo association rules, state laws and local ordinances may prove to be a difficult burden to overcome in getting the firing range approved. 

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Association Meetings Must be Properly Noticed

Bd. of Managers of Park Regent Condo. v. Park Regent Assoc., No. 2009-04227, N.Y. Supr. Ct., App. Div., March 30, 2010.

A condominium regime in New York was recently involved in litigation over the validity of an association member annual meeting. Several unit owners called the meeting and purported to elect a new board of managers for their regime. The board of managers in place prior to the meeting brought suit for a declaratory judgment that the meeting was invalid for lack of proper notice; therefore no new board members were elected. A unit owner also sued past and current board members for fraud and breach of fiduciary duty. The trial court held that the unnoticed meeting was invalid and issued a permanent injunction against the board members elected at the meeting, preventing them from acting as members of the board. The appeals court affirmed this holding.

The individual unit owner later amended his complaint to recover attorney’s fees and expenses, as permitted in the regime’s governing documents. This motion was also granted.

In sum, when associations fail to properly give notice of member meetings and board meetings very costly results may follow. Associations should closely read their governing documents for notice requirements and follow these requirements to the letter. Contact an attorney for help in complying with your governing documents.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Board Committees

From time to time, a Board of Directors may find it helpful to delegate responsibilities to Board Committees.  Committees are authorized by the Nonprofit Code in S.C. Code Ann. § 33-31-825, except where prohibited by the Association’s bylaws or articles.

A majority of Board members must approve the creation of a Committee, unless the Association’s bylaws impose a more stringent requirement.  Committees must abide by the same rules as the Board in terms of meetings, actions without meetings, notice and waiver of notice, and quorum and voting requirements.  Additionally, the Board may delegate non-board functions to Committees.

Some examples of Committees include: a Nominating Committee, Architectural Standards Committee, Covenants Committee, and a Social Committee.  Board Committees should always exercise reasonable care in delegating and supervising Committees and Committee members, as this delegation of authority does not exonerate Board Members from their responsibilities to the Association.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Ambiguous Covenant Construed to Permit Pet Bird

Breakwater Cove Condo. Ass’n v. Chin, No. A-1420-09T3, N.J. Super. Ct., App. Div., Dec. 2, 2010.

A unit owner at Breakwater Cove kept two birds in her unit. The association informed her that she was in violation of the master deed and her birds were a nuisance to other owners. The Master Deed provides: “No bird, reptile or animal of any kind shall be raised, bred or kept in any unit or anywhere else upon the property except that dogs, cats or other household pets are permitted, not to exceed two in the aggregate, provided they are not kept, bred or maintained for any commercial purpose, are housed within the unit and abide by all applicable rules and regulations. No outside dog pens, runs or yards shall be permitted.”

The association pursued alternative dispute resolution with a mediator in hopes of resolving the dispute. When mediation did not resolve the issue, the association sued the owner. The trial court sided with the association, finding that the owner’s birds did not qualify as “other household pets” under the master deed. The trial judge also determined that the birds were a nuisance based on testimony of other owners.

On appeal, the court determined that the pet policy in the master deed was ambiguous because it is reasonably susceptible to two meanings. The court held that based on this ambiguity, the covenant did not provide fair notice to unit owners and could not be upheld.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.

Association Can Enforce Zoning Regulations

Ariyan v. Pine Orchard Ass’n, Inc., No. CV084034207S, Conn. Super. Ct., Dec. 3, 2010.

The court in this case held that the Pine Orchard Association had the authority to enforce zoning regulations within the association.  Ariyan began constructing a gazebo on her lot, which is zoned with a 20-foot rear setback. Behind her lot is a private, unimproved right-of-way.  Ariyan did not initially seek approval of the zoning board before starting construction.  However, she eventually did submit an application for a permit, which was denied.  She later submitted a second application for a permit and that was also denied based on the setback requirement.

Ariyan then submitted a variance request for the setback requirement, arguing that because there was no barrier between her property and the private right-of-way, the gazebo would not be noticeable if it violated the required setback requirement.  Her variance was also denied, and was shortly followed with a cease and desist order for the partially constructed gazebo.  Ariyan was asked to remove the gazebo.  After the Zoning Board of Appeals upheld the decision, Ariyan appealed to the Connecticut Superior Court.

Ariyan argued on appeal that the decision was illegal, arbitrary and an abuse of discretion.  She based most of her argument on the fact that the regulations did not define “structure.”  The court found this unconvincing and held that “structure” is defined using its common and usual meaning.  The court also held that the appeal lacked merit because zoning regulators are required to apply the regulations when appropriate, and the fact that the gazebo would not obstruct her neighbors’ views was irrelevant.

This site and any information herein is intended for informational purposes only and should not be construed as legal advice.  Seek a competent attorney for advice on any legal matter.