October 2013
In This Issue:
Assessments Against Undeveloped Lots Are Proper
Foreclosure Extinguished Associationís Liens for Assessments
Condominium Unit Owners Must be Members of Master Association
Developer Is Liable for Ineffective Drainage System Repair Costs
Arbitrator Is Given Wide Latitude to Resolve Claims
Association May Not Use Reserve Funds to Pay Litigation Costs
Hotel Condominium Sales Are Not Securities Transactions
Limitation Period Begins When Homeowner Suffers Damage Due to Governing Document Provisions
Quick Links:
Contact Law Reporter
Visit Our Home Page
View Archives
View Credits
CAI College of Community Association Lawyers
printer friendly

Assessments Against Undeveloped Lots Are Proper

Marmic Properties, L.L.C. v. Silverglen Town-Homes Homeowners Association, No. 14-12-00312-CV (Tex. App. Aug. 29, 2013)

Assessments/Covenants Enforcement: A Texas appeals court affirmed a judgment that assessments levied on undeveloped lots were proper because the declaration provided for assessments to be fixed at a uniform rate for all lots.

Silverglen Townhomes is located in Harris County, Texas. It is subject to a declaration of covenants (declaration) that provides for subdivision operation, management and maintenance to be funded through common assessments paid to Silverglen Town-Homes Homeowners Association (association) by each unit owner.

The original developer intended to construct 43 townhomes in Silverglen, but only 26 were actually built. The remaining 17 lots were purchased in 2008 by Marmic Properties, L.L.C. After purchasing the undeveloped lots, Marmic refused to pay assessments to the association.

In 2011, the association sued Marmic, seeking to foreclose its assessment lien on the lots and moved for summary judgment (judgment without a trial). Marmic opposed the motion, arguing that assessments were not authorized by the declaration or that they were arbitrary and capricious. The trial court ruled in the association’s favor and Marmic appealed.

On appeal, Marmic argued that the assessments were used to pay for water, trash collection and other services that were not used by its 17 undeveloped lots. Marmic asserted that the assessments were arbitrary and capricious under Section 202.004 of the Texas Property Code, which provides that discretionary authority exercised by an association is presumed reasonable unless a court determines by a preponderance of the evidence that the action was arbitrary, capricious or discriminatory.

The declaration specifically provided that “[b]oth Common and Special Assessments must be fixed at a uniform rate for all Lots.” Since Marmic did not dispute the declaration’s clear, plain language, the appeals court concluded that the association did not exercise discretionary authority in charging Marmic the same assessments it charged owners of developed lots.

In deposition testimony, the association’s president stated that the association kept records of the assessments it collected but did not have documentation demonstrating the actual expenses paid after Marmic purchased the undeveloped lots. Marmic argued that it was hard to imagine how collecting assessments could not be arbitrary and capricious when there was no evidence of how the assessments were spent.

The appeals court held that, to overcome the presumption of reasonableness established by Section 202.004, it was Marmic’s burden to prove that the association exercised its discretionary authority in a manner that was arbitrary, capricious or discriminatory.

Marmic argued that the water and trash collection services provided by the association conferred no benefit on its 17 undeveloped lots, and paying assessments for these services only served to subsidize the developed lots.

The appeals court, however, found that these complaints were insufficient to overcome the presumption of the association’s reasonableness. There was no way for the association to apportion the water costs based on each lot’s use. Moreover, the association had used the assessments to repair a broken water pipe on one of Marmic’s lots and to clean up vandalism to the sprinkler system on another Marmic lot. The desirability of developed and undeveloped lots would be diminished if trash were allowed to accumulate on lots or if waste management were improperly managed.

The appeals court affirmed the trial court’s judgment.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

Foreclosure Extinguished Associationís Liens for Assessments

River Oaks Condominium Association v. Donovan, No. 4:12-CV-01880-SPM, (E.D. Mo. Aug. 30, 2013)

Assessments/State and Local Legislation and Regulations: A federal district court ruled in favor of HUD in a dispute over whether condominium assessment liens were extinguished by foreclosure.

River Oaks Condominium is located in Florissant, Missouri. The condominium is managed and maintained by River Oaks Condominium Association (association). Pursuant to the Declaration of Condominium for River Oaks, the association is authorized to impose assessments against unit owners for common expenses and levy late fees and interest for nonpayment or enforce a lien against the unit from the time the assessment becomes due until it is paid.

Tracy Snipes purchased a unit in River Oaks and granted a purchase money deed of trust to U.S. Bank, N.A. in 2006. When she defaulted on the loan, the bank foreclosed its lien in January 2011. In July 2011, the bank conveyed the unit to the U.S. Department of Housing and Urban Development (HUD).

In March 2012, the association issued a “Payoff Memorandum” to HUD seeking $6,056.69 in unpaid assessments, late fees and interest. HUD paid $2,853.32, stating this was the amount it was legally obligated to pay from the foreclosure date going forward. The association claimed it had liens against the unit for unpaid assessments that had accrued up to six months before the foreclosure under Missouri’s Condominium Property Act (act).

The association filed suit against HUD to collect amounts it claimed were due. HUD filed a counterclaim to determine whether, under Missouri law, foreclosing a purchase money deed of trust extinguished the association’s lien. The court determined that, as a general rule “[t]he proper foreclosure of a senior deed of trust extinguishes deeds of trust and other interest junior to it.” However, the court also recognized that Missouri enacted a statute specifically to address the priority status accorded condominium association liens. The act provides that a condominium association lien has priority over all other liens and encumbrances on a unit except: (1) liens and encumbrances recorded before the declaration is recorded; (2) a mortgage or deed of trust for a unit purchase recorded before the assessment becomes delinquent; (3) liens for real estate taxes and other governmental assessments; and (4) a maximum of six months’ delinquent assessments or fines which are due prior to any subsequent financing or second mortgage.

HUD argued that exception 2 applied. The association argued that exception 4 is an exception to the other three exceptions that gives it super-priority status for up to six months’ of assessments prior to foreclosure. The court agreed with HUD and found that exception 4 was inapplicable. The Missouri courts have previously held that exception 4 applies when an assessment lien is pending at the time an owner refinances or creates a second mortgage. Here, the unit owner never refinanced or took out a second mortgage. Further, U.S. Bank’s deed of trust was recorded in 2006, before the assessments became delinquent in 2010 and 2011.

Accordingly, HUD’s motion for partial summary judgment on the lien priority issue was granted.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Condominium Unit Owners Must be Members of Master Association

Point’s Reach Condominium Council of Unit Owners v. The Point Homeowners Association, Inc., No. 1070 (Md. Ct. Spec. App. Aug. 30, 2013)

Covenants Enforcement/Assessments: A Maryland appeals court found that, although the planned unit development declaration did not clearly apply to condominium units, the condominium unit owners must be members of the master homeowners association.

The Point is a planned unit development in Section 17 of Ocean Pines in Worcester County, Maryland that consists of at least 124 single-family homes developed by Banker’s Development, LLC (developer). The developer also built three waterfront condominium buildings known as Point’s Reach Condominium (condominium). A dispute arose as to whether condominium unit owners were required to belong to the Point Reach Homeowners Association, Inc. (HOA), which governs The Point, in addition to the Point’s Reach Condominium Council of Unit Owners (condominium association).

The condominium association and condominium unit owners William and Elizabeth Iampieri and Leonard Nemec (collectively, plaintiffs) sued the HOA, seeking a declaration that the condominium was not part of The Point subdivision, was not subject to the declaration of restrictions for The Point (Point declaration) and condominium owners were not required to be HOA members. The condominium owners also sought reimbursement for HOA assessments they had already paid and an injunction to prevent the HOA from assessing them further.

The trial court found that The Point’s declaration was unclear as to whether it covered the condominium. The trial court allowed testimony on this issue and applied the equitable doctrine of implied negative reciprocal covenants to find that condominium owners were subject to The Point’s declaration and must belong to the HOA. The plaintiffs appealed.

The doctrine of implied negative reciprocal covenants recognizes that, when a common grantor develops lots according to a general plan or development scheme and imposes substantially uniform restrictions on the lots, those same restrictions may be enforced against the land retained by the developer if the land is part of the same general development plan.

The original development plans for Section 17 approved by the county showed single-family and multi-family structures, the latter where the condominium is now located (condominium property). A 1999 plat filed by the developer depicts 90 single-family lots and the condominium property as remaining land belonging to the developer and reserved for future development. The Point’s original declaration recorded in 1999 describes The Point subdivision in an introductory “whereas” clause as including all real property in Section 17. However, the body of The Point’s declaration provides that it applies to all “Lots” (defined as the single-family, detached residential lots described in the plats that are filed or are to be filed in the land records).

The Point’s declaration provides that the HOA’s architectural control committee’s authority extends only to “Lots and shall not apply to any parcels to be developed by the Declarant for any use other than single-family detached numbered residential lots.” However, The Point’s declaration also contains provisions for multi-family design standards and permits architectural review fees to be established for residential products other than single-family. The Point’s declaration further provides that every person who acquires title to a “Lot” must become an HOA member.

The developer revised and restated The Point’s declaration in 2000 while it still owned the condominium property. Again, The Point’s declaration applied to all “Lots” and again defined “Lots” as single-family residential lots shown on the plats. However, The Point’s declaration use restrictions provided that “Lots” may be used for single-family or multi-family residential purposes. The Point’s 2000 declaration also provided that “every owner of property” in Section 17 is required to be a member of the HOA, but another section provided that HOA membership was required of every person who acquires title to a “Lot.”

Marketing materials for The Point stated it comprised 124 single-family lots and 75 luxury condominiums. The seller’s disclosure statement for The Point also included a projected HOA budget showing 199 HOA members. 

The condominium declaration made no mention of The Point’s declaration or the HOA, but condominium marketing materials described the condominium as being in The Point subdivision comprising 124 single-family homes and 75 condominiums. The condominium marketing materials stated “homeowners association dues” included annual HOA dues in addition to condominium association dues. Some condominium unit owners’ deeds state that the unit was taken subject to The Point’s 1999 declaration, but none of the deeds reference The Point’s 2000 declaration.

Finally, a developer representative explained that he included HOA dues in the condominium marketing materials because he intended condominium owners to be HOA members since “there needed to be an umbrella organization on behalf of all the residents to manage and maintain all the common areas, street lights, the park areas, entrance features.”

The plaintiffs argued that the implied negative reciprocal covenant doctrine should not be applied because the usual instances where this equitable remedy is applied involve use restrictions. They argued the restriction at issue had nothing to do with use since it only required HOA membership and fees.

The appeals court disagreed and held that a covenant requiring owners to pay money can be enforceable as part of a general development plan of which the property owner had notice. The appeals court concluded that the implied negative reciprocal covenant doctrine was properly applied since the condominium unit owners had notice of HOA membership. The trial court’s judgment was affirmed in its entirety.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Developer Is Liable for Ineffective Drainage System Repair Costs

Raleigh Court Condominiums Homeowners’ Association, Inc. v. E. Doyle Johnson Construction Company, No. E2012-02474- COA-R3-CV (Tenn. Ct. App. Aug. 29, 2013)

Developer Liability/Warranties: A Tennessee appeals court affirmed a ruling that the developer was liable to a condominium association for damages arising from negligent construction of the development’s drainage system.

E. Doyle Johnson Construction Company (developer) developed the Raleigh Court Condominium in Knoxville, Tenn. During construction, members of Raleigh Court Condominiums Homeowners Association, Inc. (association) noticed a drainage problem. Standing water collected in the common areas between units, threatening property values and residents’ health, safety and welfare. 

The association notified the developer’s president, Doyle Johnson, about the drainage and resulting flooding problems. In response, Johnson assured association members the problems would be repaired before the association took control of the development. 

In July 2006, the developer turned over control to the association, but it had not corrected the drainage problem, as Johnson had previously represented. The association again brought the continuing problem to Johnson’s attention; and he again affirmed, both individually and in his capacity as developer president, that the drainage and flooding problem would be corrected at the developer’s expense within 30 days. However, the developer failed to repair the drainage system within 30 days.

In January 2008, the developer conveyed the common elements to the association. The drainage and flooding problem had not been corrected at this time. As a result, the association was forced to hire a contractor to repair the problem at a cost of $40,000.

The association sued the developer and Johnson, individually, to recover the repair costs, claiming fraud, negligent misrepresentation, negligence, breach of the implied warranty of good workmanship and violations of the Tennessee Consumer Protection Act. At a bench trial (trial before a judge instead of a jury) the court ruled in favor of the association. The developer and Johnson appealed.

The appeals court held that, once the developer undertook the Raleigh Court project, common law imposed a duty to complete the condominium in a workmanlike fashion. It also found there was sufficient evidence to support the trial court’s conclusion that the developer breached that duty by failing to remedy the problems with the drainage system.

Witnesses testified that Johnson told members at a 2008 meeting that he would correct the drainage problem at his expense within 30 days. The appeals court held that the trial court properly concluded he did not intend to correct the problem. In fact, Johnson himself testified he never attempted to deal with the issue.

Johnson also asserted that, since the city released the performance bond posted for the condominium, it had approved the project; therefore, Johnson could not be held liable for damages. However, the city recognized that, despite the system’s compliance with city-approved plans, drainage problems remained, and the city advised Johnson of the situation. Clearly, releasing the performance bond did not establish that all drainage issues were resolved.

Finally, the developer argued that he was not liable for the defective drainage system because a former association president had indicated he was satisfied with drainage at Raleigh Court; thus, the association was precluded from asserting a claim. After reviewing the association’s bylaws, the appeals court concluded they did not authorize an association president to sign documents without the secretary’s countersignature. Accordingly, the former president’s statement did not waive the association’s right to pursue its claim against Johnson and the developer. 

The trial court’s judgment was affirmed in its entirety.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Arbitrator Is Given Wide Latitude to Resolve Claims

Observer Plaza Condominium Association, Inc. v. Observer Highway Plaza, LLC, Nos. A-3151-11T4, A-3339-11T4 (N.J. Super. Ct. App. Div. Aug. 27, 2013)

Developer Liability: A New Jersey appeals court affirmed a finding that an arbitrator did not exceed her authority in awarding damages to a condominium association for the developer’s negligent building construction.

Observer Plaza is a condominium in Hoboken, N.J.  Observer Plaza Condominium Association, Inc. (association) sued Observer Highway Plaza, LLC (developer) for breach of contract and warranty due to alleged negligent construction and failure to provide adequate financial reserves for repairs. The developer responded that the association violated its bylaws by improperly charging emergency assessments and late fees.  

After four years of litigation and failed mediation attempts, the parties agreed to submit the claims to binding arbitration. The arbitrator issued a two-part award in the association’s favor—one for construction defects and the other for unpaid maintenance fees. Although the arbitrator issued a detailed opinion regarding the construction defects, she failed to disclose her reasons for the maintenance fee award because the developer failed to pay its share of the arbitrator’s fee. Thereafter, the association filed a court action to confirm the arbitration award, and the developer filed an action to vacate (set aside) the arbitration award. The trial court heard both matters and confirmed the arbitration award, entering judgment against the developer. The developer appealed. 

The arbitrator found that most building defects were caused by the developer’s failure to follow construction plans. She also awarded the association amounts for the developer’s unpaid invoices. However, the arbitrator failed to award damages to the association in instances where she determined the developer had not violated any code or had complied with the construction plans. She also refused to award damages based on a failure to provide adequate reserves.

The developer contended that the arbitrator exceeded her powers under the Uniform Arbitration Act (UAA) because she decided issues that should not have been included in the arbitration, modified the award without following proper procedures and failed to make a record of the award. The UAA provides that an arbitrator may act in a manner he or she considers appropriate to dispose claims fairly and expeditiously. “An arbitrator is not required to give reasons for the award and does not have to write a decision explaining his or her view of the facts.” Further, arbitrators are given wide latitude, and a court will only overturn an arbitration award where the arbitrator is shown to have committed fraud, corruption or similar wrongdoing. 

The appeals court considered the developer’s arguments and rejected them. The court found that the arbitrator acted properly, did not exceed her powers and made an adequate record of her determination, including her award for maintenance fees.

The appeals court noted that an arbitrator must make a record of the award, but all that is necessary to satisfy this requirement is a signed document that resolves the dispute. An arbitrator is not required to give reasons for an award and does not have to write a decision explaining his or her view of the facts. The appeals court held that there was no question that the arbitrator’s award met this standard. 

The trial court’s judgment was affirmed.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Association May Not Use Reserve Funds to Pay Litigation Costs

Pointe at Gateway Condominium Owner’s Association, Inc. v. Schmelzer, Nos. 98761, 99130 (Ohio Ct. App. Aug. 22, 2013)

Developmental Rights/Powers of the Association: An Ohio appeals court affirmed a ruling that ordered an association to stop using reserve funds to pay the costs of suing the developer.

Pointe at Gateway Condominium, L.L.C. (developer) developed the Pointe at Gateway Condominium in a historic building in Cleveland, Ohio. The condominium is administered by Pointe at Gateway Condominium Owner’s Association, Inc. (association) pursuant to the Ohio Condominium Act. 

In March 2004, the developer subdivided the parcel separating ownership of the building façade from the rest of the building. Two months later, the developer created the association and dedicated all the property to the association except the property façade. In 2011, the association assumed control of the building but not the façade. The association claimed the developer split the lot to continue leasing the façade for commercial advertising.

In 2012, the association sued the developer, seeking a determination, among other things, that the subdivision was unlawful or, alternatively, that the façade parcel was part of the condominium common elements as of May 2009, when the developer’s association control ended.

The developer filed a motion for a restraining order and injunction to stop the association from expending its reserve funds on attorney and accountants’ fees and other litigation costs. The developer also asked that unit owners be provided an accounting of the litigation costs already incurred and an estimate of future costs and that the specific unit owners who supported the litigation be specially assessed for the costs already incurred and the future litigation expenses. The developer also filed a motion to dismiss the association’s lawsuit on grounds that the claims were fictitious and unsupported by law. 

The trial court granted the motion in part and ordered the association to stop using reserve funds for litigation expenses. The trial court also granted the developer’s motion to dismiss, but it denied the request for an accounting and restoration of funds. The association appealed.

The association contended the façade parcel primarily comprised foundations and supports and, therefore, must necessarily be part of the common elements. The condominium act’s definition of “common elements” includes building foundations and support features. The court determined, however, that the condominium declaration specifically provided that the building facade was excluded from the property submitted to the condominium. The association’s argument ignored the condominium act’s language, which states that condominium common elements are defined by statute unless the declaration provides otherwise.

The association also contended that the trial court erred in granting the developer a permanent injunction prohibiting the association from using reserve funds for non-capital expenses because the developer failed to show irreparable harm. However, the court relied upon testimony by a local realtor that an association would suffer in value and saleability if its reserve funds were depleted.

Moreover, this type of expenditure was not authorized by the association’s governing documents. The declaration provides that a reserve fund is to be established to fund repair and replacement of common areas and facilities. The association’s bylaws authorize the association to use reserve funds for “extraordinary expenditures.” However, the appeals court determined that, when this sentence was read in the context of the section pertaining to common area facilities repair and replacement, it became clear the bylaws did not authorize the expenditures at issue here.

The trial court’s judgment was affirmed in its entirety.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Hotel Condominium Sales Are Not Securities Transactions

Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. Aug. 13, 2013)

Federal Law and Legislation: A federal appeals court affirmed a ruling that sales of hotel condominium units and subsequent rental management agreements did not constitute securities transactions.

Hard Rock Hotel San Diego is a 12-story, mixed-use development in San Diego, Cal., containing commercial space and 420 residential condominium units. A number of condominium unit purchasers brought a putative class action against 5th Rock, LLC, the project developer, Tarsadia Hotels, the hotel operator and manager, the broker and other related entities for alleged violations of state and federal securities laws.

The purchasers complained that their purchase contracts obligated them to enter into rental management agreements with the manager, which constituted the sale of a security. The purchasers alleged they had no control over their units and expected a profit only through the developer’s and manager’s efforts. A local zoning ordinance prohibited owners from  occupying their units more than 28 days per year, so the units had to be operated as part of the hotel. The purchasers were not issued keys to their units but had to obtain keys from the manager when staying in their units.

The district court dismissed the purchasers’ case, finding that the purchasers had not alleged facts sufficient to show that the transaction constituted a security. The purchasers appealed.

The Securities Exchange Act of 1934 defines “security” as including “investment contracts.” Case law establishes that “investment contract” can mean any number of “schemes devised by those who seek the use of the money of others on the promise of profits.” The standard for an investment contract is “(1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits induced by the efforts of others.” Although real estate investments are not usually considered securities, what matters is “the economic reality of the transaction.”

The appeals court agreed that the purchasers’ allegations were insufficient to show that a security was sold when the condominiums were sold. The purchasers alleged no facts that showed the purchase contracts and rental management agreements were offered as a package or that the rental management agreement was promoted at the time the units were sold. They also did not allege they were told the rental management agreement would generate profit.

The purchasers contended that external factors, such as the zoning ordinance, gave them no choice but to sign rental management agreements when they were later presented. However, the rental management agreements were executed 8 to 15 months after the purchase agreements.

The appeals court found the purchasers’ argument was undermined by the extended time between agreements and by the fact that the purchase agreement and rental management agreement were executed with two separate entities. The appeals court saw the two transactions as distinct. Moreover, the purchasers’ argument rested on the assumption that the only viable use for the condominium units was as investment property, but the appeals court found no reason why there could not be a viable market for owner-occupied hotel condominiums as short-term vacation homes.

The appeals court agreed with the district court that, since the purchasers did not adequately allege a security sale, the facts did not show that the common-law fraud claims can survive a motion to dismiss. Accordingly, the district court’s judgment was affirmed.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]

Limitation Period Begins When Homeowner Suffers Damage Due to Governing Document Provisions

Harris v. Aberdeen Property Owners Association, Inc., No. 4D12-1435 (Fla. Dist. Ct. App. Aug. 21, 2013)

State and Local Legislation and Regulation: A Florida appeals court held that the statute of limitations for a claim concerning governing document provisions began to run when the homeowner purchased her property and became subject to the governing document rather than when the document was recorded.

Bristol Lakes is a neighborhood within the Aberdeen planned unit development in Palm Beach, Fla. Aberdeen Property Owners Association, Inc. (Aberdeen POA) is the master association for the development, and Bristol Lakes Homeowners Association (Bristol Lakes HOA) is the association for the Bristol Lakes neighborhood.

Leslie Harris purchased a home in Bristol Lakes in 2006. At the time, the governing documents for Bristol Lakes did not require membership in the Aberdeen Golf & Country Club (Club); however, the governing documents for the Aberdeen POA did require mandatory membership. Seeking to resolve this conflict, Bristol Lakes HOA sued Aberdeen POA in 2005. The Club intervened in the suit. The Club and Bristol Lakes HOA reached a settlement in 2010, four years after Harris purchased her home. The settlement agreement provided Club memberships that had no fees and no privileges for Bristol Lakes homeowners. However, the settlement required homeowners who had purchased after October 30, 2004, and not joined the Club, to join the Club as fee-paying members and to pay back Club fees from the date of purchase.

After the settlement, Harris sued Aberdeen POA, the Club and Bristol Lakes HOA, seeking a judicial declaration regarding the Club’s membership requirements. She claimed that Bristol Lakes HOA breached its fiduciary duty to homeowners by entering into the settlement agreement. Aberdeen POA argued that the five-year statute of limitations barred Harris’ action. The trial court ruled in favor of Aberdeen POA, finding that Harris’s claim accrued in 2004 when Aberdeen POA’s governing documents requiring mandatory membership were recorded, and Harris’ claim was brought outside the limitation period. Harris appealed.

On appeal, Harris contended that the claim did not accrue until 2006 when she took title to the property. She had no interest in the matter and suffered no damages until she acquired title to the property. Aberdeen POA argued that the limitations period for anyone who might at some point challenge the mandatory membership document began to run in 2004 when the document was recorded.

Florida law provides that a cause of action accrues when the last element constituting the cause of action occurs. The appeals court found that no claim accrued until Harris took title in October 2006 or (alternatively) until she was assessed mandatory Club membership fees. Therefore, because Harris filed her suit within five years of taking title to her property, it was improper for the trial court to enter summary judgment based on the statute of limitations.

The trial court’s judgment was reversed, and the case was remanded for further proceedings.

©2013 Community Associations Institute. All rights reserved. Reproduction and redistribution by CAI members or nonmembers are strictly prohibited.

[ return to top ]


6402 Arlington Blvd. | Suite 500 | Falls Church, VA† 22042 | (888) 224-4321
This e-mail was sent to inform you of CAI products, services or events.
For more information, please visit www.caionline.org.
Change your e-mail address