What the Courts Say

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

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. Continue Reading Court Deference to Board Business Decisions

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"…

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.
Continue Reading SB 100 – Limits on Board’s Authority to Modify Common Elements?

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.
Continue Reading HOMEOWNER ASSOCIATIONS WIN STANDING AND RIGHT TO SUE SUBCONTRACTORS

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.
Continue Reading The Fiduciary Duty of Board Members: No “Playing Favorites” Allowed