November 2006
In This Issue:
Association Must Give Members Access to Employee Records
Association Did Not Violate Fair Housing Act
Association May Sue Owner to Require Son to Comply With Association's Traffic Regulations
Developer Could Not Withdraw Parcel
Declaration Requires That Principal View Be Unobstructed
Lien to Collect Assessments Is Valid Even if Notice to Owner Is Not Timely
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Association Must Give Members Access to Employee Records

Koslow v. Woodbridge Lake Property Owners Association Inc., No. CV010092738, Conn. Superior Ct., June 7, 2006

Association Operations: Because members of a common-interest community need detailed financial information to evaluate the goods and services for which they are paying, and because such access is required under Connecticut law, members possess rights of access to an association's financial information, including all accounting records. Associations are barred from denying members access to information concerning the job titles, dates of employment, and compensation of individual association employees.

Jay and Marilyn Koslow owned and resided in a single-family residence at Woodbridge Lake, a planned community in Connecticut. Woodbridge Lake Property Owners Association Inc. ("association") operates and controls the common areas, activities, and interests at Woodbridge Lake. The Koslows wrote to the association's board of directors on Nov. 19, 2003, seeking the association's financial records showing the title, position, and salary being paid to each individual the association employed. The board orally denied the request, citing privacy and confidentiality laws. On Jan. 22, 2004, the Koslows wrote the board with a further request, which the board again denied, this time by letter, relying on nonstock corporations' provisions requiring a certain level of specificity and a demonstration of a proper, good-faith purpose when requesting to see records.
The Koslows sued the association on March 16, 2004, seeking the following: 1) a court order permitting them to inspect and photocopy the financial records and "all other records" of the association; 2) a court statement declaring null and void that portion of the association's bylaws that granted the board the option to deny access to financial and other records upon a showing of good cause; and 3) a declaration from the court that they were entitled to know the job titles, dates of employment, and compensation of the association's employees. Because, over time, the composition of the board had changed, and the board began to maintain a more open policy that granted greater access to its financial records, the court ruled only on the third issue.
The court noted that although members of nonstock corporations are limited in their rights to inspect and copy accounting records of the corporation, in this case the rights of common-interest owners went beyond those of members of other types of nonstock corporations. Because the dues and common charges paid by owners in a common-interest community almost entirely finance the maintenance of the common areas and other expenses, the court recognized that the Connecticut legislature granted to those owners the "unfettered right" to examine the association's accounting records. 
Furthermore, because the members possessed the right to view all accounting records and could very well deduce the compensation of various individual employees by examining all individual payroll checks and benefit disbursements, the court ruled that the owners were entitled to such specific information directly and that the association was permanently enjoined from denying access to it.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited. 

Association Did Not Violate Fair Housing Act

Dubois v. Association of Apartment Owners of 2987 Kalakaua, 453 F.3d 1175 (Ninth Cir. 2006)

Federal Law and Legislation: Condominium owners' claim of discrimination under the Fair Housing Act failed when one element of the claim was not met. Because the condominium association never asked the owners to remove their dog from their property, the element of the test requiring the refusal to make the requested accommodation was not met, and the defendant's Fair Housing Act claim therefore failed.

John Dubois owned a unit in a residential condominium known as 2987 Kalakaua in Honolulu, Hawaii, and lived there with Timothy Prindale. In January 2000, Dubois brought home Einstein, an English bulldog, and submitted letters from doctors to the Association of Apartment Owners of 2987 Kalakaua ("association") to satisfy a requirement in the condominium's bylaws. That requirement prohibited individuals from owning animals unless the individuals had a disability and could provide medical documentation justifying the need for an assistance animal. Dubois and Prindale also eventually submitted letters from a behavioral-medicine specialist and two doctors stating that Prindale suffered from depression and would benefit from animal-assisted therapy.
The association granted Dubois and Prindale temporary permission to keep Einstein, and although the association never sought to evict the dog, Prindale filed a housing discrimination complaint against the association with the Department of Housing and Urban Development, which referred the complaint to the Hawaii Civil Rights Commission. Dubois and Prindale then sued the association, alleging discrimination and retaliation in violation of the Fair Housing Act ("Act") and its Hawaii counterpart, the Discrimination in Real Property Transactions Act. The trial court granted summary judgment in favor of the association, and Dubois appealed.
Dubois's primary claim was that the association discriminated against them on the basis of handicap in violation of the act by refusing to allow them to keep the dog. The following five elements constitute a valid claim under the act: 1) the plaintiff or associate is handicapped within the meaning of the act; 2) the defendant knew or should reasonably be expected to know of the handicap; 3) accommodation of the handicap may be necessary to afford the handicapped person an equal opportunity to use and enjoy the dwelling; 4) accommodation is reasonable; and 5) the defendant refused to make the requested accommodation. The court ruled that because the association never actually refused to make the accommodation and never attempted to evict Einstein, one of the essential elements of the claim under the act was never met, and, therefore, the claim failed.
Regarding Dubois's claim of alleged discrimination and retaliation under Hawaii's Discrimination in Real Property Transactions Act, Dubois claimed that the association discriminated against him and Prindale by refusing to accommodate the dog and to provide them a parking stall closer to their unit. By failing to set forth any evidence of such denials, he failed to make out a prima facie case of discrimination under the state statute. 
He also failed to make out a prima facie case of retaliation for the Fair Housing Act claim under the state statute because the evidence presented was irrelevant to the claim, no evidence was presented to show that Dubois was prevented from attending a board meeting, Dubois could not demonstrate that any other allegedly retaliatory action was motivated by the complaint under the act, and, finally, Dubois presented no evidence that the association's initiation of foreclosure and attorney's fees proceedings against him was motivated by a desire for retaliation. The court also dismissed Dubois's other claims for intentional and negligent infliction of emotional distress, defamation, invasion of privacy, breach of fiduciary duty, and abuse of process.
Editor's Observation: There is a lesson here, and all would do well to heed the court's conclusion. This litigation undoubtedly took a substantial toll on the individual parties and other persons connected with them and with this condominium project, not only in terms of time and expense, but also from the disharmony and aggravation that burdened their lives. Racing to the courthouse is not always the right approach. Albert Einstein, namesake of the dog in this case, was known not only as a genius but also as a peaceful and patient man. On conflicts large and small, he once remarked, "In the last analysis, every kind of peaceful cooperation among men is primarily based on mutual trust and only secondly on institutions such as courts of justice and police." Einstein's owners would do well to heed that advice.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Association May Sue Owner to Require Son to Comply With Association's Traffic Regulations

The Meadows Community Association Inc. v. Russell-Tutty, 928 So. 2d 1276 (Fla. Dist. Ct. App. 2006)

Covenants Enforcement: An association is entitled to bring suit to enforce its prohibition against reckless driving on private roads maintained by the association.

The Meadows Community Association, a Florida condominium association ("association"), sued Louise Russell-Tutty, a unit owner, in an effort to clarify its rights under the Declaration of Maintenance Covenants and Restrictions and to compel Russell-Tutty to require her adult son to comply with the association's traffic rules. The son lived with Russell-Tutty and had violated speed limits and engaged in reckless driving several times. The local sheriff's department refused to pursue the traffic violations because the roads within the Meadows were private roads.
Russell-Tutty filed an answer and asked the trial court to dismiss the case on grounds that the association failed to state a cause of action. She argued 1) that traffic enforcement was within the sole province of law enforcement and that courts cannot enjoin criminal behavior; 2) that the complaint failed to establish a nexus between her and her son; and 3) that she could not be ordered to control the actions of another person. Following a hearing, the trial court granted her motion to dismiss, and the association appealed.
On appeal, the association argued that it sufficiently pleaded a cause of action based on Russell-Tutty's alleged violations of restrictive covenants. The appeals court agreed that the facts alleged in the suit stated a cause of action for injunctive and declaratory relief. The court noted, "The test for sufficiency of a complaint for declaratory judgment is not whether the plaintiff will succeed in obtaining the decree he seeks favoring his position, but whether he is entitled to a declaration of rights at all. In other words, once a cause of action for declaratory relief is sufficiently pleaded, the plaintiff is entitled to a judicial determination of the rights at issue." The court found that the association sufficiently pleaded its interest and doubt as to its rights under the declaration. Because the complaint stated a cause of action, the appeals court found that the trial court erred by dismissing the action. Accordingly, it reversed the trial court's decision and remanded the case for further proceedings.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Developer Could Not Withdraw Parcel

Snowmass Land Company v. Two Creeks Homeowner's Association Inc., No. 05CA0024, Colo. App. Ct., July 13, 2006

State and Local Legislation and Regulation: A Colorado appeals court ruled that proper notation was not given on a plat, as required by Colorado law, for a reservation-of-rights provision to be valid.

This case involves a dispute concerning the reservation of the right to withdraw and develop a particular tract of real property that was originally developed in 1994. At that time, Snowmass Land Company ("SLC") recorded a declaration of covenants, conditions, and restrictions for two adjoining communities, East Village and Two Creeks, intending to reserve certain development rights for a later date. Specifically, the developer intended to reserve the right to withdraw a portion of property known as the "pasture parcel" from East Village.
In 2004, SLC attempted to exercise its right and was faced with the objection of Two Creeks Homeowner's Association Inc. ("association"). The trial court granted summary judgment in favor of the association, accepting its argument that SLC's reservation failed to conform with Colorado law because it failed to label the pasture parcel on the plat with its asserted rights to withdraw or develop that property.
On appeal, SLC argued that the court misapplied an earlier provision from the Colorado Common Interest Ownership Act ("Act") that had since been amended. Despite that argument, the appeals court cited the language from the amended statute that stated "[n]o common interest community is created until the plat or map for the common interest community is recorded." Therefore, SLC was required to file a plat or map under the amended act in order to create a reservation right.
SLC also argued that the trial court erred when it stated that SLC had failed to comply with the requirements of maps and plats as set forth under the act. The disputed provision stated that a map must show "[a] legally sufficient description of any real-estate subject to development rights, labeled to identify the rights applicable to each parcel." SLC's plat was found to provide a legally sufficient description of the property on the plat by describing the pasture parcel as "Lot 3, Parcel A." The problem, however, was that nothing on the plat was labeled to identify any development rights applicable to the particular parcel in question.
The only indication that SLC attempted to label was noted under the heading "Reservation." Under that section, SLC "reserved to itself...the following rights: [t]he reservation of development rights of [SLC] set forth in the declaration of covenants, conditions and restrictions of Parcel B/Two Creeks, Parcel G/The Pines, and East Village P.U.D., all of which are incorporated by reference herein." The reservation provision in the declaration stated in part, "The right of Declarant to withdraw from the CIC or to convey all or any one of the following to the Specific Parcel Association for Two Creeks as a common element...Lot 3, Parcel A."
The notation on the plat, however, failed to refer to Lot 3, Parcel A, or the disputed property. As a result, the appellate court found nothing on the plat containing the "legally sufficient description" of the pasture parcel. The court concluded that the description of the plat with the attached notations failed adequately to label the plat or map to identify the developer's right to the disputed property.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Declaration Requires That Principal View Be Unobstructed

Cordan v. Kahn, No. H029400, Cal. App. Ct., July 24, 2006

Covenants Enforcement: In an unpublished opinion, a California appeals court affirmed a trial court's order that the undefined term "principal view" in a declaration allowed for the modification of such view so long as the principal view remained unobstructed.

In 1988, Alan and Sandra Cordan purchase a lot in the Carmel Views subdivision. The Cordans' home was located uphill from property owned by the Kahn Family Trust, of which Sandra Kahn is trustee. Kahn purchased her home in 1974. All lots in Carmel Views Subdivision are subject to the First Restated Declaration of Covenants, Conditions, and Restrictions, which provides:

No trees or shrubs shall be planted, or permitted to grow, on any lot so as to obstruct the principal view from a neighboring lot or residence. If trees or shrubs grow so as to obstruct the view from the neighboring lot or residence, the owner of the view lot shall have the right to require the owner of the tree lot to trim, top, or remove the trees or shrubs so as to restore the principal view from the view lot. 

The declaration also sets out the procedure for an owner of an obstructed view lot to follow to resolve a dispute with his or her neighbor: 1) The owner of the view lot notifies the owner of the tree lot of the need for a trim; 2) the owners must meet and confer about the scope of the work required; and 3) if the owners cannot agree, the issue is submitted to the board for mediation. The owner of the view lot (a lot that overlooks a lot with trees) must obtain all necessary permits as well as bear the cost of the work.
In 1998 and again in 2004, the Cordans requested that Kahn top or trim the trees growing on her lot. Because of Kahn's concern about the effect that overly aggressive previous trimming was having on her trees, Kahn resisted the Cordans' request. The Cordans requested that the board visit their lot to determine whether the principal view was obstructed. The board determined that the Cordans' principal view was obstructed by Kahn's trees in violation of the declaration. Kahn then consulted with an arborist to advise her on the best way to remedy the situation with the Cordans without killing her trees. In the initial declaration, the requirement to trim or top trees or shrubs obscuring the principal view related only to adjoining lots. In September 2001, that provision was extended to neighboring lots.
In September 2002, the Cordans sued Kahn, seeking an injunction requiring the topping or removal of the trees interfering with their primary view. Prior to hearing arguments, the trial court judge visited the Cordans' and Kahn's lots. The trial court agreed with the Cordans' argument that in this development the view takes precedence over the trees. If a tree obstructs the principal view of a lot, the tree must be removed; however, the declaration did not define what comprises a principal view. The Cordans maintained that the principal view must be defined as the view that existed when they purchased their lot in 1988. 
The trial court determined that the term should be given its regular meaning and defined "principal view" as the view with primary importance, or the primary view. Drawing on observations obtained when visiting the lots, the judge found the primary view to be the ocean and Point Lobos. The judge further noted that such view was not obstructed. The trial court also found that the requirement that there be no obstruction of the primary view does not mean that there cannot be some modification of that view, and that the declaration did not require the primary view to be the same as when the lot was purchased in 1988. The Cordans appealed.
The appeals court concurred with the trial court in finding that the declaration did not define the term "principal view." In relying on 14859 Moorpark Homeowner's Association v. VRT Corporation, 63 Cap.App.4th 1396 (1998), (CALR September 1998) and Ticor Title Insurance Company v. Rancho Santa Fe Association, 177 Cal. App. 3d 726, 223 Cal. Rptr. 175 (1986) (CALR July 1986), the court ruled that the language in a declaration must be interpreted in its ordinary and popular sense. The court agreed with the trial court that the term "principal view" was equivalent to primary view and that nothing in the declaration compeled the conclusion sought by the Cordans that the principal view necessarily encompasses the view visible when they initially purchased their lot. The court also determined that any decision the board made concerning whether the Cordans' principal view was obstructed was merely to mediate the situation and not to reach a binding agreement.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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Lien to Collect Assessments Is Valid Even if Notice to Owner Is Not Timely

Twenty-Four Merrill Street Condominium Association Inc. v. Murray, 96 Conn. App. 616, 902 A.2d 24 (2006)

Assessments: Even if an association does not give timely notice to an owner of his assessment obligations, if the owner suffers no prejudice because of the delay in notification, a statutory lien for the assessment obligations is still valid.

On April 18, 2000, Twenty-Four Merrill Street Condominium Association Inc. ("association") sued Michael and George Murray, owners of Unit C-3 at the condominium in Hartford, Connecticut, to foreclose on their unit. The foreclosure action stemmed from the Murrays' failure to pay $1,845 in common charges. The trial court ruled in favor of the association and entered a judgment of strict foreclosure against the Murrays on Sept. 5, 2000. Almost a year later, the association commenced another foreclosure action against the Murrays that stemmed from fines and repair charges arising from faulty plumbing in their unit that damaged other units.
As reported in the June 2005 issue of CALR, the trial court ruled in favor of the association in the second foreclosure action, but only Michael Murray was a party to the appeal. At the trial level, he did not dispute that Unit C-3 had faulty plumbing, which he failed to repair, causing damage to other units.  His chief argument on appeal was that the association did not comply with the notice requirements in its bylaws, which require written notice of the proposed action and the association's ultimate decision.  The bylaws also state:

[t]he party proposing to take the action...shall give written notice of the proposed action to all unit owners or occupants of units whose interests would be significantly affected by the proposed action. The notice shall include a general statement of the proposed action and the date, time and place of the hearing.... The affected person shall be notified of the decision within thirty days in the same manner in which notice of the meeting was given.

Michael Murray conceded that he received proper notice of the proposed action and the hearing date, but he did not attend the March 13, 2000 hearing. The association acknowledged that it sent notice of its decision to Michael Murray nine months after the hearing instead of within the required 30 days. Murray argued that because he did not receive notice of the association's decision within 30 days, the statutory lien against his unit was invalid.
Even though the association did not follow the mandate of its bylaws, the appeals court used a "harmlessness" analysis to determine whether late notice compromised Murray's interests. The court pointed out that notice requirements serve to promote fairness and to give parties the opportunity to know when their interests are implicated in a matter. It also stated that if it is proven that delayed notice does not prejudice the individual affected, then the penalty is not forfeited. Since the association did not assess Murray for fines and repair costs until after it had given late notice, the lawsuit to foreclose on the lien was not filed until after Michael was given notice, and Murray admitted to the court that he was not prejudiced by the delay, the court ruled that even though the association gave delayed notice, the lien against Murray's unit was still valid.

©2006 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

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