November 2005
In This Issue:
Unimproved Land Can Be Condominium Units Subject to Assessments
Association Did Not Breach Duty to Act in Good Faith
Assessments Are Subject to Fair Debt Collection Practices Act
Landowners Cannot Assert Relative Hardship Doctrine
Claim for Breach of Implied Warranty Is Barred to Subsequent Purchasers
Mortgagee May Not Have to Approve Declaration Amendments
Declarations and Bylaws Are Preempted by Federal Law
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CAI's 27th Annual
Law Seminar

 

January 27-28, 2006
Las Vegas

The premier event for community association professionals grappling with issues of condominium and HOA law! Highlights include:

  • Opening remarks by Karen Mathis, Esq., president-elect of the American Bar Association
  • Wayne Hyatt Lecture Series
  • 18 education sessions
  • And much more!

Visit CAI's website for more information. Register by Dec. 22 and save $50.


Unimproved Land Can Be Condominium Units Subject to Assessments
Bear Creek Master Association v. Edwards, 130 Cal. App. 4th 1470 (2005)
Covenants Enforcement/Assessments: A condominium unit is defined by boundaries on a recorded document; notice of delinquent assessments is properly given to the address at which the association corresponds with the homeowner; and the amount of a lien includes future assessments due and associated fees and costs.


Parlan Edwards acquired undeveloped property in the Country Club Villas section of Bear Creek, a master-planned community, when he bought the property at a foreclosure sale. Edwards did not conduct a title report at that time. The deed conveying the property to Edwards described the property as eight condominium units and contained a return address for Edwards that actually belonged to his attorney, Lucila Enriquez. Enriquez had telephoned the Bear Creek property manager to inform the association of the foreclosure sale and to state that Enriquez represented Edwards in connection with the properties. 

Over time, the association corresponded with Edwards using Enriquez's address, and she responded to the association on Edwards' behalf. Among the correspondence sent to Edwards in this manner were association ballots for all eight units, which Edwards himself used to vote and returned to the association. The ballots included a space for the responding homeowner to write his address, and Edwards wrote Enriquez's address on all but two of those ballots. The only time Edwards provided a different address was when he gave the property manager his office address to receive parking decals.

Units in Bear Creek were sold in phases; when the first unit in a phase was sold, the duty to pay assessments was triggered for all other units in that phase. The first property in Edwards' phase was sold several years before Edwards acquired the property, and the previous owner had been assessed. However, Edwards refused to pay assessments from the start of his ownership of the properties. When unpaid assessments accumulated, the association sent Edwards a pre-lien notice of delinquent assessments that complied with California law. Two copies of this notice were sent, one by certified mail and one by first-class mail. The certified-mail copy was returned to the association, unsigned, but the first-class-mail copy was not returned. After other statutory prerequisites were met, the association sued Edwards for, among other things, judicial foreclosure, foreclosure of an equitable lien, and breach of contract. 

The association prevailed on all claims, and Edwards appealed. Among Edwards' various claims, he maintained that he was not required to pay assessments because there was no actual structure on the properties. To support this, he asserted that a condominium cannot exist without a structure, and therefore the Davis-Stirling Common Interest Development Act ("Act") did not apply to his unimproved property. He also claimed that the association did not give proper notice of the delinquent assessments and that the lien amount was limited to the amount stated on the notice of lien.  The appeals court ruled that Edwards was required to pay assessments on his properties even though there were no actual structures on them. The court pointed out that, under the Act, a condominium is defined in terms of space.

When the Act was adopted in 1985, it defined a "condominium" as a space described by a recorded document. Therefore, the condominium plan recorded against Edwards' property created eight condominium units on the land. Furthermore, because the duty to pay assessments under both the Act and under Bear Creek's CC&Rs begins on all units after the first unit in a phase is sold, and the first unit in Edwards' phase was sold long before he acquired his units, his duty to pay assessments commenced at the time he took title to the property.

The court also ruled in the association's favor on the issue of whether proper notice of the impending lien had been given. The association used the proper address by mailing the notice to Enriquez's address because it had mailed all prior correspondence to her address, and Edwards had never notified the association to send correspondence elsewhere and even responded to correspondence sent to Enriquez's address. Also, Edwards' claim that he never received the certified-mail pre-lien notice was disingenuous, because the first-class letter was not returned. Under California law, there is a presumption that mail properly mailed is received, and there was no testimony in this case to rebut this presumption. 

Moreover, applicable case law states that an addressee cannot assert failure of service by certified mail after he willfully disregarded a notice of certified mail delivered to his address under circumstances where it can be reasonably inferred that the addressee was aware of the nature of the correspondence. Furthermore, Edwards could not claim that Enriquez was not his agent because his behavior in permitting her to communicate extensively with the association on his behalf had indicated that she was either his actual agent or his ostensible agent with regard to the Bear Creek properties. Finally, the court reaffirmed that a foreclosure lien includes not only the amount stated in the pre-lien notice, but also the assessments, collection costs, interest, and attorney's fees occurring after notice had been given.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

Association Did Not Breach Duty to Act in Good Faith
Depot Square Business Center Condominium Association Inc. v. Charbonneau, No. CV040184471S, Conn. Superior Ct., April 12, 2005
Assessments/Architectural Control: A condominium association did not breach its duty to act in good faith by denying a request by an owner to make exterior alterations to a unit, or by foreclosing on a unit for nonpayment of common charges.


Raymond and Judith Charbonneau owned a unit in the Depot Square Business Center Condominium Association Inc. ("association"). Due to the Charbonneaus' failure to pay common charges for more than six months, the association foreclosed on the unit. After the foreclosure action was filed, the Charbonneaus filed an answer and a counterclaim. One element of the seven-count counterclaim was an allegation that the association breached its duty to act in good faith by not allowing the Charbonneaus or prospective tenants to make exterior alterations to the unit. The association countered that this argument was legally insufficient.

To determine whether an association has acted in good faith, there must be a contract; the obligation to act in good faith arises from the contract and has its underlying basis in contract law. The Charbonneaus argued that the association’s bylaws constituted a contract, and the court assumed that to be true in this case.
 
The court decided that every contract carries an implied duty requiring that neither party do anything that will injure the right of the other party to receive the benefits of the agreement. This does not, however, answer the question of what constitutes bad faith. Under Connecticut law, to prove a claim of bad faith, one is required to prove the other party "engaged in conduct designed to mislead or to deceive….” Under the law, bad faith is not simply judgment or negligence -- it implies the "conscious doing of wrong because of dishonest purpose or moral obliquity.”

The threshold for an argument that an association has acted in bad faith is reasonably high, and it puts a burden on the party asserting that argument to show there has been a conscious intention to do wrong beyond merely making a decision (or failing to make a decision) in a negligent or thoughtless way. The court  found that the defendants had not shown any facts demonstrating a “conscious doing of a wrong because of a dishonest purpose” to show that the plaintiff acted in bad faith when it barred the defendants from making modifications to the exterior of their unit.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Assessments Are Subject to Fair Debt Collection Practices Act
Dikun v. Streich, 369 F. Supp. 2d 781, E. Dist. Va. 2005
Federal Law and Legislation: A law firm potentially violated the Fair Debt Collection Practices Act by not verifying a debt, failing to cease collection when notified that the owner was disputing the debt, communicating directly with the owner instead of with her counsel, and falsely representing the compensation it could be paid.


Miriam Dikun owned property in the Villages at Saybrooke until November 2004 and was obligated to pay quarterly assessments to the Saybrooke-Village of Bristol Homeowners Association Inc. ("association"). In February 2004, the association retained a law firm to pursue collection of Dikun's past-due assessments, late fees, and interest. The firm sent Dikun a collection letter on Feb. 3, 2004, and a subsequent letter on June 10, 2004. Dikun sued the attorneys involved, alleging that they were debt collectors under the Fair Debt Collection Practices Act ("Act"). There were two issues before the court: 1) whether the monies the firm attempted to collect were consumer debt and therefore regulated by the Act; and 2) whether the law firm violated the Act when it attempted to collect the debt.

The Act defines debt as "any obligation or alleged obligation of a consumer to pay money…in which the money, property, insurance, or services which are subject to the transaction are primarily for personal, family, or household purposes…." Analyzing this definition, the court ruled that association assessments are debts subject to the Act.

Dikun alleged that the February 2004 collection letter sent to her failed to tell her how to properly dispute its accuracy. However, the court determined that the letter included a statement that clearly explained how to dispute the letter's accuracy and that satisfied the Act's requirements, and it dismissed that claim. The court also dismissed Dikun's claims that the firm’s letter failed to include clauses required by the Act, made false or misleading representations in order to collect the debt, and filed a memorandum of a lien without verifying the debt, as well as her claim that the June 2004 letter failed to include clauses required by Act.

However, the court determined that Count 11 of Dikun's complaint was valid: It determined that when Dikun disputed the debt, the law firm did not verify or cease collection of it, but instead filed a warrant in debt, potentially violating the Act. The Act also prohibits debt collectors from communicating directly with the owner in the collection of a debt if the debt collector knows the consumer is represented by an attorney with respect to the debt, or can readily ascertain the attorney's name and address. The court determined that the law firm may have also violated this section of the Act, as Dikun alleged in Count 13 of her complaint.

Finally, the Act prohibits debt collectors from making false representations as to the compensation they could receive for debt collection. Under the Act, a statement of attorney's fees sent by a debt collector is a communication that attempts to collect debt. As alleged in Count 14 of Dikun's complaint, the firm may have violated the Act by submitting an affidavit for attorney's fees in court. Since the law firm may have violated the Act, the court let stand Counts 11, 13, and 14 of Dikun's complaint, but it dismissed the other claims.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Landowners Cannot Assert Relative Hardship Doctrine
Green v. Lawrence, No. RE-03-23, Me. Superior Ct., Oct. 1, 2004
Developmental Rights: Individual landowners can sue to enforce restrictive covenants unless the restrictions are found to substantially harm one landowner without benefiting other landowners in a subdivision.


Menatoma Realty Corporation owned the Camp Menatoma development, in Readfield, Maine, which was once a summer camp for children. The corporation intended to subdivide the property into 18 lots and sell them, but James Lawrence, corporation president, discovered during the approval process with the Department of Environmental Protection ("DEP") and the town's planning board that four of the lots did not have soil conditions suitable for construction of a wastewater septic system. As a result, the DEP required that those four lots be limited to wood-lot use.

To notify future purchasers of the DEP requirement, the final subdivision plan for the development demarcated the four unusable lots with the phrase "Lot not suitable for subsurface sewerage disposal." The final plans also stated: "Lots 8, 9, 10, and 11 are restricted to use as wood lots only. The above restrictions apply to all purchasers of property in Camp Menatoma, their heirs, successors, and assigns." The Readfield Planning Board approved the subdivision plan with these restrictions, and the restrictions were subsequently incorporated into the deeds for each parcel.
 
In 1980, Camp Menatoma property owners formed the Menatoma Association ("association") to administer certain aspects of the subdivision. The association's bylaws incorporated language about the budget for the group, including a provision explaining how the four unusable lots would be assessed if they were to become developable. In 1984, the corporation sold all of the lots, including the four unusable lots, to the corporation's president, James Lawrence.

Twenty years later, the requirements for subsurface disposal systems changed, potentially rendering Lawrence's lots developable. Lawrence successfully filed applications with the DEP and the planning board to eliminate the "wood lots only" provision of the subdivision plan.  However, Camp Menatoma property owners, the plaintiffs in the case, argued that the "wood lots only" language in the subdivision's plan and similar language in their individual deeds constituted a restrictive covenant preventing Lawrence's four lots from being used for anything but wood lots.

The first issue for the trial court was the question of what was meant in the deed by "wood lots only," since Lawrence argued that it was ambiguous. Courts interpret a restrictive covenant by first considering the covenant's plain language. If its language is ambiguous, extrinsic evidence of the covenant's meaning is used in interpretation. The trial court determined that "wood lot" is a commonly understood concept in Maine describing the use of a piece of property for growing and harvesting trees.

Lawrence also argued that the deed restrictions could be enforced only by the association and not by individual property owners. However, the court disagreed and concluded that, to have any legal significance, deed restrictions must be enforceable by individual property owners. Lawrence attempted to bolster his case by stating that the budgetary provisions in the association's bylaws anticipated the possibility that his four lots would become developable, therefore giving notice to the other owners that his lots might eventually be used for something other than wood lots. The trial court gave little weight to this argument, stating that the association's bylaws were ambiguous and barely related to the issue of Lawrence's development rights. Instead, the court focused on the unambiguous restrictive covenants in the owners' deeds to determine Lawrence's rights.

Finally, Lawrence argued that the court should apply the "relative hardship doctrine," which would lead to the voiding of the "wood lot" covenant if that restriction would unduly harm him without substantially benefiting the other owners' land. Lawrence reasoned that the "wood lot" requirement, coupled with the soil changes on his land, resulted in an undue hardship for him relative to the benefits received by other landowners from the restrictive covenant. The court reasoned that, while there was no hardship for Lawrence -- who knew his lot was unusable when he purchased it -- a hardship did occur when the decision was made by the corporation to live with the reduced profits of not being able to develop Lawrence's four lots. The court reasoned, however, that Lawrence was prevented from reaping any benefit from that previous hardship, since, as the president of the corporation in 1980, any hardship was his own making.

The court permanently enjoined Lawrence from using his land for anything but wood lots and declared his four lots restricted to wood-lot use unless members of the association later voted to remove the restrictive covenant.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Claim for Breach of Implied Warranty Is Barred to Subsequent Purchasers
Hayden Business Center Condominiums Association v. Pegasus Development Corporation, 209 Ariz. 511, 105 P.3d 157 (2005)
Warranties/Developer Liability/Risks and Liabilities: Subsequent purchasers of commercial condominium units cannot collect damages for substandard workmanship under a claim for breach of implied warranty.


Hayden Airpark Venture L.L.C. ("Hayden") built the Hayden Business Center, a commercial condominium in Scottsdale, Arizona. Pegasus Development Corporation ("Pegasus") performed construction-related services on the building for a monthly fee. Hayden sold condominium interests in the building to individual owners, who are members of Hayden Business Center Condominiums Association ("association"). Purchasers of units claimed that the building contained construction defects, and assigned their claims to the association. The association sued Hayden and Pegasus for breach of implied warranty of good workmanship.

The parties disputed whether Pegasus was a general contractor or a construction manager. The trial court determined that if Pegasus were a construction manager, there could be no implied warranty to subsequent purchasers, and if Pegasus were a general contractor, the association's claim still failed because the implied warranty did not extend to claims by subsequent owners of commercial property in Arizona. The court found that the association was also barred from recovering damages under a tort action. After the court's ruling, the association moved to amend its complaint to add a negligence count, and re-characterized some of its repair costs as property damage. When the court denied the motion to amend and ruled in Pegasus' favor, the association appealed.

The appeals court noted that an implied warranty of good workmanship is a contract claim, and relevant only to the parties to the contract. The court cited one exception, Richards v. Powercraft Homes Inc., 139 Ariz. 242, 678 P.2d 427 (1984), in which the Arizona Supreme Court ruled that homebuilders should anticipate that the houses they construct will likely often change ownership -- and that the implied warranty of good workmanship ran to subsequent purchasers because the effect of latent defects was as damaging to subsequent owners as well as to original buyers.
 
However, the court in this case considered that the Powercraft decision was grounded in public-policy considerations pertaining to new-home construction and applied only to homebuilder vendors because of the gross disparity that exists in sophistication between homebuilders and homebuyers. Based on these considerations, the court saw no reason to extend the implied warranty-of-good-workmanship claim to subsequent owners of commercial buildings because, in its opinion, no gross disparity in sophistication generally exists between buyers and sellers of commercial real estate.
 
Although the association relied on a series of cases outside Arizona to support its claim that privity is not required for commercial claims, the appeals court found that a majority of jurisdictions other than Arizona refused to extend the cause of action to commercial construction, noting significant differences between commercial and residential construction. The court relied on Rhode Island Supreme Court and Missouri appeals court cases that refused to extend the implied warranty to commercial construction because no contractual relationship existed between the respective parties. Finding no merit in the association's arguments that privity was not a technical requirement to assert a claim for implied warranty of good workmanship, the court upheld the privity requirement in commercial cases and affirmed the trial court's decision in Pegasus' favor.
 
Addressing the association's appeal of the trial court's refusal to allow its amended complaint, the court found that the decision lay within the trial court's discretion, which it upheld absent any clear abuse of that discretion. The court further suggested that leave to amend was properly denied when the amendment was so legally insufficient on its face that it could not affect the outcome of the litigation. The court found that the association could not assert a personal-injury claim on behalf of the purchasers because such claims are not assignable, and, moreover, the association did not disclose any harm to personal property or any personal injury; all the purchasers' losses were economic in nature. The court affirmed the trial court's ruling in all respects and granted Pegasus its reasonable attorney's fees.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Mortgagee May Not Have to Approve Declaration Amendments
Keller v. Sixty-01 Association of Apartment Owners, 127 Wn. App. 614, 112 P.3d 544 (2005)
Documents: Where a declaration provides that approval of the holders of first mortgages on units must be obtained to make material amendments to the declaration, the amendment must be material to the holders of such mortgages -- not merely material to the homeowners -- before the approval requirements are triggered.


The Sixty-01 Association of Apartment Owners ("association") governs a complex of condominiums in Redmond, Washington, formed in 1978. From 1978 until 1992, condominium common expenses were allocated to each unit according to its percentage of undivided interest in the common elements pursuant to the condominium declaration. This allocation was in accordance with the governing statute for condominiums at the time, the Horizontal Property Regimes Act ("Act"), which provided that each unit's undivided interest in the common elements was determined by each unit's value relative to the value of the entire property.

In 1989, the Washington Condominium Act ("Condominium Act") was enacted, governing all condominiums created after July 1, 1990. Specifically, the Condominium Act permits common expenses to be allocated to the units on a basis other than relative value. In response to the Condominium Act provisions, the Sixty-01 homeowners voted in 1992 to amend the declaration to change the method for allocating the common expenses. The amendment provided that "expenses will be allocated against the basic unit types in a direct relationship to actual expenses incurred and benefits received by those unit types." The amendment also delineated the percentage value for each type of home for the purpose of determining each type of common expense allocation.

After consulting with an attorney, the association's board of directors was concerned that the amendment might be invalid because Sixty-01 had not relied on the correct provision of the declaration to determine the percentage vote of unit owners necessary to pass the 1992 amendment. In 1999, the board voted to revoke the 1992 amendment and reinstated the prior assessment method, but a vote of the homeowners was not taken. In 2002, Louis and Betty Keller sued the association, alleging that the 1999 revocation violated Sixty-01's duties to homeowners and claiming damages with respect to the higher assessments allocated to their unit after the 1999 revocation.

The trial court granted Sixty-01's motion for summary judgment in part, ruling that because the 1992 amendment was improperly adopted, it was void ab initio because the amendment was not adopted by 100 percent of the homeowners and 100 percent of the first mortgage holders. In addition, the trial court granted the association's motion to dismiss and its request for attorney's fees. The Kellers appealed.

The Kellers first argued that no amendment to the condominium declaration was necessary to put into effect the Condominium Act provisions related to assessment allocation. However, the Condominium Act provides that specified retroactive sections "apply only with respect to events and circumstances occurring after July 1, 1990, and do not invalidate or supersede existing, inconsistent provisions of the declaration, bylaws, or survey maps or plans of those condominiums." Thus, an amendment to the declaration is required where the declaration provisions are inconsistent with the Condominium Act and homeowners wish to take advantage of the statutory change.

The Condominium Act also provides that such amendments must be adopted in conformity with the procedures and requirements specified by the declaration and bylaws and by the Act itself. The Act provides that an "amendment to a declaration that alters the percentage of undivided interest in the common areas requires unanimous consent of the homeowners." In addition, the declaration requires unanimous consent of the homeowners for "an amendment altering the value of the property and of each apartment or the percentages of undivided interest in the common areas and facilities." The declaration further provides that, other than a few other significant changes requiring unanimous approval, all other amendments to the declaration require 60-percent owner approval and compliance with the mortgagee-approval provisions of the declaration.

The court determined that the 1992 amendment did not change the values or percentages of undivided interest in the units, and thus it required the approval of only 60 percent of the homeowners. The parties did not dispute that at least 60-percent owner approval was obtained, and thus the amendment was not void ab initio due to insufficient homeowner approval. However, the mortgagee-approval requirements still had to be met.

The declaration provides that, unless the amendment changes the percentages of undivided interest in the common areas allocated to each unit, the prior written approval of institutions holding 75 percent of the first mortgages on units is required for any material amendment to the declaration. Thus, whether any approval of the mortgagees is required depends on whether the amendment is material. The court held that, for mortgagee approval to be required, the amendment must be material to the mortgage holder. The court stated: "It would be nonsensical to read the section to require 75-percent lender approval for an amendment that was material to the homeowners but was not material or significant to the institutional lenders."

The Kellers argued that first mortgage holders first had to request notice of amendments to trigger the mortgagee-approval requirement. The declaration provides that first mortgagees that file requests with the association must be given notice of certain events and meetings. The court determined that this provision applies to notice for items and actions completely separate from the declaration amendment provisions, and that nothing in the mortgagee-notice section indicates that it is meant to apply to declaration amendments. 

The Kellers also asserted that the Condominium Act's definition of "eligible mortgagee" includes only those lenders that requested notice of actions that require mortgagee consent, and that this definition retroactively applied to the association. The Condominium Act defines an "eligible mortgagee" as "the holder of a mortgage on a unit that has filed with the secretary of the association a written request that it be given copies of notices of any action by the association that requires the consent of mortgagees." The Condominium Act makes certain definitions in the Act applicable to condominiums created before 1990, but only to the extent necessary in construing the retroactive sections of the Act. The term "eligible mortgagee" is not used in the retroactive provisions of the Act, and the court found that the term was not necessary in construing such retroactive provisions. Further, not only is the term "eligible mortgagee" not used in the declaration, it is inconsistent with the definition of "institutional holder" found in the declaration. Therefore, the court held that the Condominium Act's definition of "eligible mortgagee" did not apply when determining whether mortgage-holder approval was required.

The court held that there were genuine issues of material fact as to whether the 1992 amendment was material to the mortgage holders, whether and how many first mortgagees existed at the time of the amendment, and whether 75 percent of the mortgagees approved the amendment. The grant of summary judgment to the association was reversed, and the case was remanded to the trial court to resolve whether the 1992 amendment was material to the mortgage holders, whether it was properly adopted with the approval of 75 percent of the first mortgage holders, and, if it was not, whether it was void ab initio or merely voidable. The trial court must also resolve whether it was voidable, whether the revocation of the board was barred by the statute of limitations or equitable principles, and whether the board followed proper procedures in voiding it in 1999.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Declarations and Bylaws Are Preempted by Federal Law
Woodbridge Condominium Owner's Association v. Jennings, No. 2003-L-112, Ohio App. Ct. (Sept. 30, 2004)

Federal Law and Legislation: A tenant can keep a satellite dish on the patio despite condominium regulations because federal law preempts condominium restrictions.

       
Richard and Virginia Jennings own a unit in the Woodbridge Condominium. Phillip and Carol Spensiero were the Jennings' tenants under a written lease. The Woodbridge Condominium Owner’s Association ("association") administered the condominium's governing documents.  The Spensieros placed a satellite dish on their patio without the written approval of the association's board of managers. The dish was attached to a mobile device that allowed the Spensieros to bring the dish inside the unit when not in use. According to the condominium declaration, the patio adjacent to the unit is part of the condominium complex's limited common area. The association's regulations prohibit occupants from changing, altering, or decorating the limited common area of the condominium without the board's written approval.

The association sued the Jennings and the Spensieros to require removal of the dish from the limited common area of the condominium complex. The Jennings and the Spensieros relied on two defenses: that the placement of the dish on the patio did not violate condominium regulations as it was not affixed to the limited common area; and that, even if the placement of the dish in the limited common area of the condominium complex did violate regulations, the regulations were preempted by federal law.  The Code of Federal Regulations Title 47 Section 1.4000 (a)(1)(i)(A), (B) ("47 C.F.R. 1.4000")  provides:

Any restriction including, but not limited to...homeowner's association rule or restriction on property which is in the exclusive use or control of the antenna user...who has direct or indirect ownership or leasehold interest in the property...that impairs the installation, maintenance, or use of an antenna one meter or less in diameter used to receive direct broadcast satellite service is prohibited.

The association countered with the argument that the limited common area adjacent to the unit was not in the exclusive use and control of the Spensieros because the association had access to it to remedy a violation. As such, the association argued that 47 C.F.R. 1.4000 was not applicable and that the association's regulations were not preempted.

The trial court ruled in favor of the Jennings, finding that because the satellite dish apparatus was not affixed to the patio it did not violate the condominium's regulations against changing, altering, or decorating a limited common area. The court also found that the Spensieros had exclusive use of the patio and that the regulations unreasonably interfered with their ability to use their dish, and dismissed the complaint.

The association appealed. On appeal, the court concurred with the trial court and focused specifically on the issue of whether unit owners have exclusive use and control of the limited common area adjacent to their property. The condominium declaration provides that patios are limited common areas, but they are restricted to use by the owners of facilities appurtenant to them. The court stated that the language of the governing documents demonstrated that owners have exclusive control of the patio area adjacent to their units. The court also determined that the association's right to access and remedy a violation alone does not establish that unit owners do not have exclusive use and control of their patios. 

The court also noted that the association's general regulations allow the association to enter any portion of a property to remedy a violation. The court reasoned that if it followed the association's arguments to their ultimate conclusion, unit owners would not have exclusive use or control of any portion of their units. This assertion presented by the association is in direct contravention of the condominium's declarations and bylaws and conflicts with Ohio's ownership interest laws.

©2005 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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