Self-Help; Maybe Not the Best Remedy

Every so often we hear of something that makes us want to shake our heads and murmur to ourselves “WHAT WERE THEY THINKING?” (Okay – maybe more of a shout than a murmur, but we ask ourselves nevertheless). This happened to me recently when I read about a Texas Court of Appeals decision in which the homeowners association (Happy Hide-A –Way Civic Club) became upset with how some owners were (really, were not) maintaining their home. The association, relying on the language in its governing documents, decided that it was entitled to demolish the owners’ home, and proceeded to do just that.

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There's a cloud on my title? What's that?

You may have heard that there is a "cloud" on the title to your property.  Generally speaking, a "cloud" appears when a recorded document indicates that some other person may have an interest in the property.  Liens, court orders, easements, and random documents can be recorded to cloud a title.  Some clouds aren't really cloudy at all.  For example, while a mechanic's lien may appear on your record, they expire quickly and become unenforceable.

Usually, a document clouding your title is there for a good reason.  If you don't pay your taxes or HOA assessments, the unpaid entities will record liens against your property.  Remove the liens by paying your bills.

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Withholding Records - We Can Do That, Right?

 We all know that the Colorado legislature last year revised the records definitions and disclosure requirements under the Colorado Common Interest Ownership Act ("CCIOA") (we do all know that, right?).

Well, here is an example of what could happen if your community doesn’t take seriously the responsibility to provide records to its members when they request them.

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Fair Housing - Take a Look at Your Rules!

We are often asked to review rules and regulations for our clients during the cold winter months, before the community pool becomes the haven of unsupervised children running wild on summer break.  Our clients are shocked when we advise them that their rules could cause problems under the federal Fair Housing Act.

It seems reasonable to impose rules limiting access to attractive nuisances like swimming pools, but some courts have held that rules restricting or limiting access to pools, clubhouses, and park facilities on the basis of age violate the Fair Housing Act's prohibition against discrimination on the basis of familial status.

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Hoarding May Cause Owner to Lose Unit

The Tennessee Court of Appeals in the case of 4215 Harding Road Homeowners Association v. Harris, 2011 WL 145915 (Tenn.Ct.App.2011) recently ruled that a homeowners association had the right to permanently force a resident out of her condominium unit as a result of hoarding activity leading to unsanitary conditions within the unit and a resulting offensive odor in the common areas.

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             The Colorado  Supreme Court held that the non-developer owner of a parking space did not receive an unrestricted title that would allow it to sell the space to a third party non-condominium owner B.B. & C. v. Edelweiss Condominium, 218 P.3rd 310 (Colo. 2009)

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When Can a Homeowner Be Joined as an Indispensable Party

In a recently reported appellate court case, Clubhouse at Fairway Pines v. Fairway Pines Estates Owners, 214 P.3d 451 (Colo. App. 2008) the appellate court based on prior court holdings stated that joinder of an indispensable party can be raised for the first time on appeal. The appellate court pointed out a decision in the Colorado Supreme Court that held, “….a court of appeals should, on its own initiative, take steps to protect the absent party, [by ordering joinder of the unnamed party] who of course had no opportunity to plead his interest below [in the trial court]” (cite omitted) at p. 455. The Court of Appeals then reasoned, that if the Court could on its own initiative protect the interest of an absent party, then there should be no reason a party should be foreclosed from raising the same issue on appeal. 

Colorado Rules of Civil Procedure, Rule 19, Joinder of Persons Needed for Just Adjudication, provides for the addition of parties who are necessary for a complete adjudication of all issues. This column does not answer the question of who is an indispensable party necessary for joinder in a lawsuit. The intent is to discuss the timing of when homeowners can be added as indispensable parties during pending litigation. The case cited below does talk about homeowners as indispensable parties, but it does not focus on the factors that make the owners indispensable to the litigation. In fact the law on whether homeowners are necessary parties in homeowner association litigation has the possibility of being radically revised as the Supreme Court has granted review of the case discussed below. 

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The Importance of Signed and Recorded Covenants

The Colorado Court of Appeals, in the recent court decision of Abril Meadows Homeowner’s Association v. Castro, 211 P.3d 64 (Colo. App. 2009), ruled that an association whose declaration of covenants was unsigned did not have the right to enforce its covenants against its homeowners.

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When is One Story One Story?

When the documents say how tall it is. And when it does not say how tall one story is, there is a very good chance that language in the governing document limiting a structure to one story will be unenforceable as a restrictive covenant.

In a recent Colorado Court of Appeals decision, Allen v Reed, 155 P.3rd 443 (Colo. App. 2006) the appellate court reversed the trial court’s granting a permanent injunction ordering the defendants to remove their A-frame addition to their home, which contained a bedroom loft suite. The lawsuit did not involve the Association, but was an action between two homeowners regarding an interpretation of the Association’s restrictions limiting structures to one story.   It was unclear whether the Association Board had the authority to enforce and there was no existing architectural control committee to enforce the restriction.

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A Constitutional Right to Free Speech in Your Association? Not Yet

Those of us that work in the community association industry have been closely following the path of the New Jersey case of Committee for a Better Twin Rivers v. Twin Rivers Homeowners Association. On July 26, 2007, the New Jersey Supreme Court announced its decision, affirming the trial court and reversing the court of appeals, in determining that, under the New Jersey Constitution, the homeowners association’s rules restricting signage did not violate the right of free speech, that the constitutional right of free speech is not absolute, and citizens may waive or otherwise curtail their rights. A little background is helpful to understanding this case, and what its implications are to those of us in Colorado.

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Court Deference to Board Business Decisions

The good faith acts of directors of profit or non-profit corporations which are within the powers of the corporation and within the exercise of an honest business judgment are valid.  Rywalt v. Writer Corp, 526 P.2d 316, 317 (Colo. App. 1974).

It is educational to review the Rywalt case, above, to show the deference the courts will give to Board decisions. In this case, a group of homeowners sued the Association in an attempt to prevent the Association from entering into an agreement with the developer to build a second tennis court on the common area close to the plaintiffs' homes. The cost of the tennis court would be borne by the developer. The plaintiffs argued, among other things, that the Association's decision was arbitrary and capricious.

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Jefferson County District Court Rules HOA Can Ban Smoking In Units

The Jefferson County District Court ruled last week that a condominium association can prohibit smoking in their four-unit building.   The Heritage Hills #1 Condominium Owners Association amended its bylaws to ban smoking after an owner complained about smoke seeping into her unit.  The District Court upheld the bylaw change stating that second hand smoke "constitutes a nuisance" similar to "extremely loud noise."  Click here to read an article on this ruling recently published in the Denver Post. 

 

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New Jersey Supreme Court to Hear Community Association Case

You may recall we reported earlier this year on a New Jersey case that made community associations subject to the state constitution, and therefore subject to free speech provisions of the constitution.

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NPR Coverage of New Jersey HOA Case

If you're interested in hearing more about the New Jersey case that extends state constitutional rights to private HOAs, NPR released a story yesterday. The voice of the Community Association Institute is notably missing, but it is still useful to hear how the case is being reported. The story does end noting that 71% of homeowners are happy with their associations.

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Jersey HOAs Subject to State Constitution

Recently, a New Jersey court issued a decision regarding homeowner associations that has caused quite a stir among associations, owners, and professionals serving associations.

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SB 100 - Limits on Board's Authority to Modify Common Elements?

We have received a number of questions about whether SB 100 limits an Association's ability (acting through its board of directors) to make changes to its common elements - as an example, can the board change hardscape landscape improvements to irrigated sod? While SB 100 does a number of things, including imposing a number of additional requirements on the association's board of directors, the simple answer is that it does not restrict the board's authority to make this type of decision.

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HOMEOWNER ASSOCIATIONS WIN STANDING AND RIGHT TO SUE SUBCONTRACTORS

In a recent decision, the Colorado Supreme Court has affirmed the authority of Associations to seek damages from subcontractors for defective construction. The HOA filed a lawsuit against the developer, the contractor and various subcontractors for defective construction of the project. The HOA settled with the developer and general contractor before trial. The trial court dismissed the negligence claim against the subcontractors before trial.

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Litigation/Construction/Review of Governing Documents

In consideration of filing a construction defect or similar lawsuit, the importance of reviewing governing documents as well as the underlying construction documents and reports is of the utmost nature in this day and age when legislatures and Developers work to limit access to courts.

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The Fiduciary Duty of Board Members: No "Playing Favorites" Allowed

A homeowner association board of directors has a fiduciary duty to the association and its members. That fiduciary duty requires the board members to act in good faith and for the benefit of the association as a whole. Board members also have a duty of loyalty and a duty to deal impartially with beneficiaries, or members. Board members should remember the role of their fiduciary duty to the association when considering or making requests that affect the individual, private interests of any board member. One Colorado case provides a useful illustration for how boards might handle potential breaches of the fiduciary duty.

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