December 2013
In This Issue:
Association Did Not Violate Fair Housing Act in Upholding Architectural Standards
Debt for Unpaid Assessments Was Not Discharged in Bankruptcy Proceeding
Insurer Is Not Obligated to Defend Association in Lawsuit
Owner Cannot Transfer Ownership Interest in Limited Common Elements
Inartful Drafting Leads to Years of Controversy Over Declaration’s Terms
Ambiguous Declaration Provisions Cause Amendment and Enforcement Problems
Assessment Lien Is Void Due to Lack of Notice
Zoning Regulations Prohibit Home-based Dog Grooming Business
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Association Did Not Violate Fair Housing Act in Upholding Architectural Standards

Hollis v. Chestnut Bend Homeowners Association, No. 3:12-cv-0137, U.S. Dist. Ct. (D. Tenn. Sept. 24, 2013)

Architectural Control/Covenants Enforcement/Federal Law and Legislation: A Tennessee federal court ruled that an association’s refusal to approve a sunroom addition where handicapped children resided did not constitute discrimination under the Fair Housing Act.

Architectural Control/Covenants Enforcement/Federal Law and Legislation: A Tennessee federal court ruled that an association’s refusal to approve a sunroom addition where handicapped children resided did not constitute discrimination under the Fair Housing Act.

The Chestnut Bend community in Franklin, Tenn., is subject to a declaration of covenants, conditions, and restrictions (declaration) administered by Chestnut Bend Homeowners Association (association). Charles and Melanie Hollis reside in the community with their five children, two of whom are physically and mentally disabled.

The declaration provides that exterior improvements must be approved by the association’s architectural review committee (ARC). Applications for architectural approval must include “exterior elevations; a plot plan indicating property lines and building setbacks; a sample of materials to be used; and color samples of paints and stains.”

In March 2011, Melanie Hollis submitted a request to add a sunroom to her house because the awning over her patio awning was damaged by winter weather. Although she included measurements for the sunroom and a photograph of a proposed design, her application lacked the required specifications. The ARC rejected her application for aesthetic reasons and forwarded it to the board for final say.

The board expressed concern about the proposed metal frame of the addition and asked Hollis to provide a more complete application. In response, Hollis mentioned her desire to create a room for her disabled children, for which she preferred the metal framework. She indicated that she wanted the addition because the tarp over the existing deck was damaged.

In April 2011, Hollis’ contractor provided the ARC with more information about the addition, including renderings of the design. The ARC rejected the design and denied approval based solely on aesthetic concerns. The board also denied the request and urged Hollis to resubmit a design using brick and a shingled roof to conform to the neighborhood look.

Hollis submitted a second request for a metal frame sunroom in August 2011, which still did not contain the required information. When the ARC asked about the height of the room, Hollis indicated it would sit about one foot above ground level so the two disabled children could pass easily between the sunroom and the backyard. When she was again asked to consider using brick, Hollis responded that she had been unable to find brick that matched the house. Hollis also threatened court action if the application was not approved. The board rejected the application since it still did not contain all of the required information, and Hollis refused to meet with the board.

In September 2011, Hollis requested permission to build a copy of another resident’s sunroom. When the board requested additional information, Hollis for the first time explained that the purpose of the sunroom was to give her disabled children a play space. Hollis’ response also included physicians’ letters that said that a sunroom would be beneficial to the disabled children and a copy of the statute on reasonable accommodations under the Fair Housing Act (FHA). The board again informed Hollis that it could not approve the addition without a complete application.

In December 2011, Hollis submitted her fourth application. It was thorough and contained all the required information. The letter accompanying the application asked that the sunroom “be a reasonable modification” under the FHA. The ARC and the board approved the application with one change—a shingled roof consistent with the neighborhood’s architectural standards.

In February 2012, Hollis sued the association for discrimination in violation of the FHA. The association filed a motion for summary judgment (judgment on the merits without a trial), arguing that Hollis did not demonstrate all the necessary elements for a FHA claim.

FHA defines discrimination as including “a refusal to permit at the expense of a handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises.”

Although Hollis claimed to have submitted four requests for a reasonable modification, the court determined that the record only supported the existence of one. Under FHA, an applicant makes a reasonable modification request whenever she makes it clear that she is requesting permission because of a disability. She must explain she has a disability, the type of modification she is requesting and the relationship between the requested modification and her disability. The request must be made in such a way that a reasonable person would understand the request was made because of a disability.

The court granted summary judgment to the association on claims arising from the first three requests for approval because Hollis failed to mention a relationship between the proposed addition and the children’s handicaps.

The court found that Hollis’ claim as to the fourth application set forth a legally sufficient case of discrimination under the FHA because she had submitted a complete application which made clear that her children were disabled and that the sunroom was intended as a necessary home modification to enhance the children’s quality of life.

The association contended that it had exercised its obligation to maintain an architectural standard and to preserve the property values of other homes in the community by not allowing improvements that were inconsistent with that standard. Hollis was aware of the declaration when she purchased her home. Moreover, the evidence clearly showed that the association’s sole focus was on the aesthetic design of the addition and its impact on the value and architectural standards of neighboring homes. Therefore, the court concluded that the association had proffered a legitimate, nondiscriminatory reason for denying Hollis’ fourth application.

Hollis failed to produce any evidence to suggest that the association’s aesthetic reasons for denying the application were not legitimate. Accordingly, the court ruled in the association’s favor.

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

Debt for Unpaid Assessments Was Not Discharged in Bankruptcy Proceeding

Casas-Rodriguez v. Cosmopolitan on Lindbergh Condominium Association, Inc., No. A13A1103 (Ga. Ct. App. Sept. 30, 2013)

Assessments: A Georgia appeals court affirmed a monetary award to a condominium association seeking to foreclose its lien against a bankrupt unit owner for unpaid assessments, late fees and interest as well as attorneys’ fees incurred by the association before the owner’s bankruptcy filing.

Luisa Casas-Rodriguez owned a unit in the Cosmopolitan on Lindbergh Condominium in Atlanta, Ga. In July 2010, she filed a Chapter 7 bankruptcy petition and was granted discharge in January 2011. In May 2011, Cosmopolitan on Lindbergh Condominium Association, Inc. (association) sued Casas-Rodriguez personally for unpaid assessments, late fees, interest and attorneys’ fees. It also sought to foreclose its statutory lien on her unit. Casas-Rodriguez filed a counterclaim, alleging, among other things, that the association violated the automatic stay of her bankruptcy.

The court trial entered judgment in the amount of $8,211.77 in the association’s favor and permitted the association to foreclose its lien on her unit, which the court valued at $15,342.36. Casas-Rodriguez appealed.

Casas-Rodriguez argued that the trial court erred when it awarded the association attorney fees incurred before she filed her bankruptcy petition. She contended that the association should have pursued relief in her bankruptcy proceeding, rather than waiting until the bankruptcy ended, and she contended that she was entitled to attorneys’ fees and punitive damages for the association’s violation of the bankruptcy automatic stay.

The appeals court held that the association was not required to seek relief in the bankruptcy proceeding since the association was entitled to select and pursue any number of remedies until the debt was satisfied. The appeals court further held that discharging the bankruptcy had no impact on the association’s right to enforce its lien since discharges in bankruptcy do not affect liens on property unless unavoidable under the Bankruptcy Code, which Casas-Rodriguez did not allege. Thus, the lien on her unit remained enforceable after the bankruptcy was discharged. The appeals court further held that the trial court correctly calculated the association’s lien amount to include pre-bankruptcy petition attorney fees since that obligation was not discharged in the bankruptcy.

The trial court’s judgment was affirmed.

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Insurer Is Not Obligated to Defend Association in Lawsuit

San Miguel Community Association v. State Farm General Insurance Company, No. G047738 (Cal. Ct. App. Oct. 1, 2013)

Association Operations/Risks and Liabilities: A California appeals court ruled that an insurer did not have a duty to defend an association where the lawsuit did not seek damages.

The San Miguel community in Orange County, Cal., is managed by San Miguel Community Association (association). The association obtained a comprehensive business liability and directors and officers’ liability policy from State Farm General Insurance Company that obligated State Farm to defend any claim or suit seeking damages payable under the policy.

In 2008, two San Miguel residents complained that the association was not enforcing the declaration’s parking restrictions, and its failure to do so was causing the residents distress and affecting their property values. They claimed that they had incurred out-of-pocket costs in their efforts to persuade the board to enforce the declaration.

The association rejected the residents’ complaints, and the residents demanded mediation of the dispute in accordance with the declaration. The mediation notice identified issues to be addressed but did not identify damages allegedly suffered or demand compensation. After receiving the mediation demand, the association asked State Farm to defend it.

In March 2009, State Farm formally denied the claim on the basis that the residents had not asserted a claim for damages covered by the policy. State Farm explained there was no coverage under the policy because the claims involved the alleged failure of the association to enforce parking regulations, replace fire signs and provide notice of election results. Those claims did not qualify as “bodily injury, property damage, personal injury, or advertising injury” as required by the policy to trigger coverage under the business liability policy. As for the directors and officers coverage, State Farm stated that “the claims do not seek recovery of money damages.”

Mediation did not resolve the matter, and the residents filed suit against the association and its president, William Beggs. The claims against Beggs were for breach of the declaration and nuisance. The residents alleged that the association’s declaration violations caused them “irreparable injury . . . which cannot be fully compensated in damages.” Although the complaint included an allegation that Beggs’ conduct was willful and despicable, which could be the basis of a punitive damage award, the complaint neither alleged nor sought compensatory damages. (Compensatory damages compensate the plaintiff for the injury sustained and nothing more. Punitive damages are over and above what will compensate the plaintiff for his loss; it may be awarded, where circumstances are aggravated, to comfort the plaintiff for mental anguish or to punish the defendant.) The sole remedy sought by the residents was an injunction (a court order requiring someone to do something or refrain from doing something). 

The association again asked State Farm to defend it, and State Farm again denied the claim because the “action does not seek damages that would be covered under the policy.” The residents amended their complaint and for the first time sought compensatory damages.

The association once again submitted a claim to State Farm. State Farm agreed to defend the lawsuit but specified that its obligation to provide a defense commenced on August 9, 2009, when the association tendered the amended complaint. State Farm refused to compensate the association for costs incurred in defending the case prior to that time.

The association sued State Farm, alleging breach of contract and breach of the covenant of good faith and fair dealing. The association specifically alleged that the residents’ complaint had included a claim for money damages within the coverage of the directors and officers liability policy from the outset; and, thus, State Farm was obligated to pay the costs of defending the suit from the beginning.

State Farm moved for summary judgment (judgment on the merits without a trial) based on the assertion that the policy did not obligate it to provide a defense to any claim unless “covered damages” were sought, and contrary to the association’s argument, no such damages had been sought by the residents until they filed an amended complaint. The trial court entered final judgment in State Farm’s favor. The association appealed.

The association contended that a claim for actual damages was implied in the residents’ underlying allegations of nuisance, breach of fiduciary duty, irreparable damage and request for punitive damages. The appeals court rejected the assertion that, because the residents purportedly sustained some actual damage as a result of the association’s wrongs, albeit minor, and could have sought those damages in earlier pleadings, State Farm was obligated to infer they had actually done so.

Further, the appeals court rejected the association’s claim that the residents’ request for punitive damages in the earlier pleadings necessarily implied that compensatory damages were sought, even though compensatory damages are a prerequisite for punitive damages.

Because the residents were not seeking damages against the association prior to amending the complaint, there was no coverage under the policy prior to that filing, and, thus, no requirement that State Farm provide the association with a defense.

The trial court’s judgment was affirmed.

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Owner Cannot Transfer Ownership Interest in Limited Common Elements

Sinatra v. Bussel, 119 So. 3d 473 (Fla. Dist. Ct. App. July 10, 2013, rehearing denied Aug. 16, 2013)

Covenants Enforcement: A Florida appeals court ruled that condominium unit owners did not have authority to transfer interest in a limited common element to purchasers of a unit in another phase of the development.

Arthur and Lori Bussel owned a unit in The Sterling Condominium (Sterling unit) in Pinellas County, Fla. A dock and boat slip were assigned to the Sterling unit as a limited common element by the Declaration of Condominium (declaration). The declaration originally provided that ownership interests in docks and boat slips could be transferred without having to transfer ownership of the appurtenant unit, but only to another unit in The Sterling.

Several years after The Sterling was completed, a second phase of development was constructed named Sunset Watch. The Bussels purchased a second condominium unit in Sunset Watch (Sunset Watch unit). The declaration was amended to allow Sterling owners who were assigned docks and boat slips to lease them to Sunset Watch unit owners.

The Bussels sold their Sunset Watch unit to Stephen and Janice Sinatra and gave the Sinatras a deed that purported to also convey their interest in the Sterling unit’s dock and boat slip. Subsequently, the Bussels sold the Sterling unit to John Balog. The deed conveying the Sterling unit also provided that the property being transferred included the limited common elements assigned to the Sterling unit. After purchasing the Sterling unit, Balog sought to exclude the Sinatras from using the dock and boat slip.

The Sinatras sued Balog, seeking a judicial determination that title to the dock and boat slip vested in them, pursuant to their deed, which was executed prior to Balog’s deed. The parties filed competing motions for summary judgment (judgment on the merits without a trial), agreeing on the facts and requesting that the issue be decided by the judge as a matter of law.

Balog argued that the Bussels only had authority to transfer their interest in the limited common element to another owner of a unit in The Sterling and that the deed conveying the Sterling unit with the limited common element vested title to the dock and boat slip in him. The trial court entered a final judgment declaring that the assignment of the dock and boat slip remained with the Sterling unit owned by Balog. The Sinatras appealed.

The original declaration only provided for transferring limited common elements to another unit owner in The Sterling. The Sinatras argued that a declaration amendment recorded prior to the two deeds gave the Bussels the authority to transfer their interest in the dock and boat slip to the Sinatras in connection with the transfer of the Sunset Watch unit.

However, the declaration amendment did not authorize an ownership interest in docks and boat slips to be transferred to Sunset Watch units. Rather, the amendment specified that docks and boat slips may be leased to Sunset Watch owners. Further, the docks and boat slips are constructed over submerged lands owned by the State of Florida and leased to The Sterling Condominium. Accordingly, the declaration amendment provided that the lease term for a dock and boat slip may not exceed the lease term for the underlying land. The declaration amendment further provided that a unit owner who leases a dock and boat slip is not released from complying with all obligations and duties associated with the dock and boat slip, including paying assessments for the dock and boat slip on time.

Accordingly, the appeals court held that the Bussels did not have authority to transfer their ownership interest in the dock and boat slip to the Sinatras nullifying the deed purporting to convey dock and boat slip ownership to the Sinatras. Ownership interest remained with the Sterling unit. A deed was executed that properly conveyed an interest in the limited common elements along with the ownership interest in the Sterling unit to Balog.

The appeals court affirmed the trial court’s judgment, holding that the trial court was correct to grant final judgment to Balog.

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Inartful Drafting Leads to Years of Controversy Over Declaration’s Terms

Marwick v. The Homeward Glen Homeowners Association, No. 2-12-0624 (Ill. App. Ct. Sept. 17, 2013)

Covenants Enforcement: An Illinois appeals court held that amendments could only be made to the declaration after the first 20-year term and that two-conditions precedent had to be satisfied before any amendment was effective.

Homeward Glen is a 25-lot subdivision in Kane County, Ill. developed in the 1980s in two phases with 13 lots in phase 1 and 12 lots in phase 2. The developer recorded an identical declaration of covenants, conditions and restrictions for each phase (original declarations). The declarations contemplated that a single association would govern both phases and both original declarations.

The original declarations’ main provision pertains to their duration and provides:

The covenants and restrictions set forth in this Declaration shall run with and bind the land . . . for a term of twenty years. . . . After which time said covenants shall be automatically extended for successive periods of ten years unless an instrument signed by the then owners of 2/3 of the lots within the existing properties has been recorded agreeing to change said covenants and restrictions in whole or in part; provided, however, that no such agreement of change shall be effective unless made and recorded one year in advance of the effective date of such change, and unless written notice of the proposed amendment is sent to every lot owner at least 90 days in advance of any such action taken.

This provision is an awkward attempt to combine a traditional duration clause (specifying how long a declaration remains in effect) with an amendment procedure. The inartful drafting has caused 17 years of controversy, culminating in what the appeals court called the “current installment of ‘King Lear in the Country.’”

The lot owners attempted to amend various provisions of the original declarations over the years; in 1996, they adopted amended and restated declarations (1996 amendment). Several years later, someone realized that the 1996 amendment may not have been effective immediately and that there may have been a problem with notice. In 2004, 17 lot owners (representing more than 2/3 of the total subdivision) executed a document (2004 supplement) in which they claimed to have received notice of 1996 amendment more than 90 days before the vote was taken.

However, one group of owners continued to argue that the original declarations remained in effect, while another group supported the 1996 amendment and its restrictions. Litigation of the dispute began in 2007 when The Homeward Glen Homeowners Association (association) filed suit seeking a determination as to which of the declarations was in effect and for how long. That case was complicated by the fact that the association’s board supported opposing positions at various times as directors on the board changed.

Ultimately, owner John N. Markwick filed a case against the association in 2011 to resolve the question of which declaration applied. While the case was ongoing, the association gave notice of a meeting to all owners more than 90 days before the meeting. Eighteen lot owners were present at the meeting and voted to abolish all covenants and restrictions for the subdivision; 17 lot owners (representing more than 2/3 of the lots) voted in favor and one against the resolution. The owners executed and recorded a copy of the resolution (2012 amendment).

In 2012, Markwick and the association both filed motions for summary judgment (judgment without a trial). The trial court ruled in favor of the association and against Markwick, holding that the 2012 amendment dissolved the covenants, rendering Markwick’s claims moot. Markwick appealed.

The appeals court held that the duration clause had to be read in two parts. The first part unambiguously provides that the original declarations will be in effect for 20 years, and nothing in this part authorizes any amendments during the 20-year term. The appeals court determined that modifications can occur only during an automatic extension term.

The appeals court further held that the “provided, however,” clause sets forth two conditions for a change to take place: first, the amendment must be made and recorded one year before its effective date; and, second, notice must be given to all owners at least 90 days before the amendment will be executed. If these two conditions are met, the amendment will be effective.

Despite the association’s numerous attempts to amend the original declarations, the appeals court concluded that the original declarations continued in effect without amendment until their first terms expired in 2007 and 2008. Based on the evidence presented, the appeals court could not determine that the 1996 amendment prevented the original declarations from being extended automatically. However, there was sufficient evidence to conclude that the 2012 amendment was validly adopted and that the notice condition was satisfied. Therefore, the appeals court held that the 2012 amendment became effective one year after its recording, and, as of February 2013, all covenants and restrictions for the subdivision were extinguished.

Accordingly, 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.

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Ambiguous Declaration Provisions Cause Amendment and Enforcement Problems

Lawton v. Schwartz, 308 P.3d 1033 (N.M. Ct. App. June 17, 2013)

Covenants Enforcement/Use Restrictions: A New Mexico appeals court reversed a ruling that a declaration could be amended before the 55-year-duration period expired and remanded the case for interpretation of ambiguous language.

Mary Lawton owns a home in the Estacia Primera subdivision in Santa Fe County, N.M. The community is subject to a declaration of restrictive covenants (declaration) administered by the Estacia Primera Community Services Association (association).

In 1993, Lawton purchased a lot situated on a small ridge with views of the Jemez Mountains. Her home was designed to take advantage of these views. In 2009, Lawton notified the association that certain cottonwood trees on other owners’ properties were obstructing her view of the mountains and requested that the association remedy the situation, either through extensive pruning or removing the trees. Section 6.18 of the declaration provided that “[n]o shrub, hedge, tree or other landscaping which interferes with the view, solar access and/or privacy of any [l]ot . . . shall be planted, permitted or maintained on any Lot, Living Unit or Parcel or upon any Common Area.”

The association denied Lawton’s request to enforce the view restriction. In September 2010, Kurt Sommer, a member of the architectural review board, circulated ballots proposing to amend Section 6.18 by deleting the word “view.” The association did not hold a meeting to discuss the proposed amendment; instead, Sommer included a letter with the ballots discussing the reasons for the amendment and asked homeowners to return the ballots directly to him by mail. In December 2010, Lawton sued the owners of the lots with overgrown trees, seeking to enforce the view restriction.

The declaration amendment eventually received the support of a majority of the homeowners. Despite reservations by the association’s attorney and some board members as to the validity of the voting procedures, the amendment was recorded in April 2011.

After the amendment was recorded, Lawton amended her complaint to seek a determination that the amendment was void. Both parties filed motions for summary judgment (judgment on the merits without a trial). Lawton argued that the declaration’s duration clause prohibited the amendment and, alternatively, that the voting procedures used to adopt the amendment were improper. The homeowners argued that the amendment was properly adopted and that the declaration no longer contained the view restriction that was the basis of Lawton’s suit.

The duration clause in Section 9.1 of the declaration provides:

The covenants, conditions, and restrictions of this Declaration shall run with and bind the Property . . . for a term of fifty-five (55) years from the date this Declaration is recorded, after which time they shall be automatically extended for successive periods of ten (10) years each, unless an instrument in writing, signed by at least seventy-five percent (75%) of the Owners, has been recorded within the year preceding the beginning of any such ten-year period agreeing to terminate or revise this Declaration.

Section 9.2(b) of the declaration provides that after the first sale of a lot, the declaration can be amended only by the affirmative vote of 51 percent of the homeowners.

The trial court concluded that the declaration permitted amendment prior to expiration of the 55-year period specified in Section 9.1. Therefore, because a majority of the homeowners voted in favor of the amendment, the trial court concluded the amendment was valid and enforceable as a matter of law. Lawton appealed.

The appeals court disagreed with the trial court. New Mexico strictly enforces duration clauses based on the policy that homeowners should be able to rely on the restrictive covenants for a substantial period of time without the concern that they could be subject to change and property values diminished at any moment. Therefore, where amendments are adopted during the initial duration period without unanimous consent, the court must determine whether the covenants expressly provide for that type of amendment.

Restrictive covenants are to be considered reasonably, though strictly, and an illogical, unnatural, or strained interpretation must be avoided. In construing a restrictive covenant, a court is to give effect to document drafter’s intention as shown by the language of the entire document and the circumstances surrounding the transaction.

The appeals court found both parties’ interpretations problematic. The homeowners’ construction risks rendering the duration clause meaningless. On the other hand, Lawton’s interpretation disregards the triggering event in Section 9.2, allowing for amendments by majority vote after the first lot sale, instead of at the conclusion of the 55-year initial duration period.

Acknowledging the conflicting nature of the provisions, the appeals court could not escape the conclusion that the declaration was ambiguous, and the conflicting interpretations presented fact questions that precluded summary judgment. Instead, the determination must be made after a trial is conducted at which the parties may present evidence of the circumstances surrounding the declaration’s drafting in order to shed light on its meaning.

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

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Assessment Lien Is Void Due to Lack of Notice

Country Club Condominium Owners’ Association v. Sammon, No. 99220 (Ohio Ct. App. Aug. 14, 2013)

Powers of the Association: An Ohio appeals court affirmed a ruling that a lien filed by an association against a unit for limited common area repair costs was void because the association failed to provide the owner with proper notice and opportunity for a hearing.

Thomas E. Sammon, Jr. is trustee for a unit owner in the Country Club Condominium in North Olmsted, Ohio. In January 2005, Country Club Condominium Owners’ Association, Inc. (association) informed Sammon that a water leak from his balcony floor had damaged the unit below, owned by Paula Weiss. Under the terms of the Declaration of Condominium Ownership (declaration), the porches, patios and other areas that adjoin each unit are deemed “limited common areas,” which are to be maintained by the unit owners.

The association instructed Sammon to have the balcony repaired and to forward a copy of the work report to the association by the end of the month. The association notified Sammon that the association had the right to correct the problem if Sammon did not do so by the deadline and that all the association’s costs in taking the enforcement action would be charged back to Sammon.

Sammon obtained repair estimates and advised the association in March 2005 that the balcony had been repaired. In May, the association requested detailed information about the work that had been completed. It advised Sammon that a $25-per-day enforcement assessment would be imposed if he failed to provide this documentation by May 20, 2005. This letter advised Sammon that he had the right to request a hearing by that date and provided a form for him to do so. Sammon did not request a hearing. Instead, he submitted an invoice from the contractor outlining the work performed.

In December 2005, Weiss again complained of leaks into her unit. In April 2006, Sammon hired a contractor named Cundiff to perform more repairs at a cost of $3,200. In November 2006, Weiss again complained that water had leaked into her unit. The association informed Sammon that it had retained a roofing company to complete the repairs at a cost of $10,690 and that he was responsible for paying for the repairs. This letter did not provide Sammon with the opportunity for a hearing.

In January 2007, Sammon, Cundiff and association officers met at Weiss’ unit to discuss the problem. The officers informed Sammon that if he disagreed with any of the items on the work order from the roofing company, he must explain his objections in writing to the association. Cundiff questioned whether several items on the proposal were necessary and said he thought the leak might be due to defective gutters and downspouts. Sammon also obtained a quote from a third contractor for $1,600.

In April 2007, the association advised Sammon it was proceeding under the roofing company’s proposal and that the repair costs would be assessed to Sammon. Sammon was not provided with an opportunity for a hearing.

In February 2008, the association notified Sammon that he owed $16,244.87 for the balcony repairs. In June, the association filed a lien on his unit for $16,524.87, which included the repair costs and other unpaid fees and assessments. In August, the association began foreclosure proceedings.

Both parties moved for summary judgment (judgment on the merits without a trial). Sammon argued that the Ohio condominium act required that the association provide him with a hearing and that the association’s failure to comply with the statute rendered the lien void. The association insisted that the statute applied only where the assessment pertained to damage to a common area and did not apply to an owner’s repair of his own property or limited common areas. The association claimed that the matter was not an “enforcement assessment” within the meaning of the statute since it involved repair costs and not the $25 daily penalty for noncompliance.

Section 5311.081(B) of the condominium act provides that the association’s board of directors has the power to “pursuant to division (C) of this section, impose reasonable enforcement assessments for violations of the declaration, the bylaws, and the rules of the unit owners association, and reasonable charges for damage to the common elements or other property.”

Under Section 5311.081(C), prior to imposing a charge for damages or an enforcement assessment, the board must provide the unit owner with, among other things, an opportunity to cure and for a hearing and notice of amount of the proposed assessment or charge.

The trial court determined that the matter involved an assessment within the meaning of the statute. Therefore, notice of the right to a pre-assessment hearing was mandatory, and the association failed to meet the statutory requirement. Summary judgment was entered in Sammon’s favor. The association appealed.

The appeals court found that the record clearly demonstrated that the association levied a special assessment against Sammon for balcony repairs. The record clearly established that the lien assessed against Sammon was a “charge for damages” to the limited common area appurtenant to his unit. In accordance with the act, the association was required to provide Sammon with notice and opportunity for a hearing. Absent such notice, the assessment was improper and, therefore void.

The trial court’s judgment was affirmed.

Editor’s Note: The Editor thanks Kimberly Sutter of Ott & Associates Co., LPA of Cleveland, Ohio for contributing this case for publication.

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

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Zoning Regulations Prohibit Home-based Dog Grooming Business

Lowney v. Zoning Board of Appeals of the Black Point Beach Club Association, No. AC 34594, (Conn. App. Ct. July 16, 2013)

Use Restrictions: A Connecticut appeals court affirmed a finding that a zoning board of appeals properly upheld denial of a homeowner’s application to conduct a dog grooming business from her garage.

Maureen Lowney owns a home in a residential district under the jurisdiction of the Black Point Beach Club Association (association). The association is in the town of East Lyme, Conn. but it has its own zoning regulations (regulations).

Lowney applied to the association for a home occupation permit to operate a dog grooming business from her garage. Permitted uses for home occupation under the zoning regulations include the office or studio of an architect, artist, economist, engineer, insurance agent, lawyer, photographer, or real estate broker. Uses not permitted include a physician’s office, restaurant, barbershop, beauty parlor, animal hospital, any activity that would constitute the manufacture of goods or any activity that would require more than incidental traffic of clients to the residence. The regulations further provide that the business be inside the building and not occupy more than 25 percent of it.

The regulations define “garage” as a “structure designed principally for shelter, enclosure or protection of vehicles,” and they define “attached garage” as a “garage that is part of a dwelling by being physically connected to it by means of any permanent structural connection other than pavement or fences.”

The zoning enforcement officer denied Lowney’s application on grounds that a permitted business must be conducted from the dwelling, and a dog grooming service might be noisy for Lowney’s neighbors. Lowney appealed the decision to the zoning board of appeals.

The board held a public hearing on Lowney’s appeal. Lowney argued that the zoning enforcement officer erred in concluding that her garage was not within the dwelling. She further stated that the business would occupy a section of the garage measuring 288 square feet; she would be the only person working there; and she would groom no more than three dogs per day. Thus, automobiles would be at her residence no more than six times in a day. The board voted to uphold the decision of the enforcement officer and deny Lowney’s appeal. Lowney appealed the board’s decision to the trial court.

The trial court affirmed the zoning appeals board decision and dismissed the appeal, finding that the proposed dog grooming business was a home occupation under the regulations, but because an attached garage is not part of a dwelling under the regulations, the board properly upheld the zoning enforcement officer’s denial of Lowney’s application. Lowney appealed to the court of appeals.

The appeals court agreed with the zoning board, finding that, generally, it is the function of a zoning board to decide whether a particular section of the regulations applies to a situation and the manner in which it applies. A local board is in the most advantageous position to interpret its own regulations. Dog grooming is neither expressly permitted nor expressly prohibited under the regulations. During the public hearing, board members likened dog grooming to a barbershop, which is expressly prohibited as a home occupation under the regulations.

The appeals court held that the trial court erroneously concluded that the primary intent of the regulations was to exclude only home occupations that generated more than incidental traffic. Indeed, the appeals court held that, if the drafters had wanted to exclude as home occupations only uses that would increase traffic, they would have phrased the provision to evince such intent. Because Lowney’s proposed use would generate minimal traffic, the court found it to be more in line with uses permitted under the regulations.

Although the regulations list one purpose as “lessening congestion on the streets,” the court observed that the “purposes” section lists many purposes, any of which might influence the drafters’ reasons for prohibiting some uses and permitting others. It was clear to the court that the line between permitted and prohibited uses was not intended to be drawn only with respect to potential traffic congestion, as opposed to any other purpose. It was within the zoning board’s prerogative to determine that a dog grooming business was more like the prohibited uses than the permitted uses.

The appeals court found the trial court properly affirmed the decision of the zoning board of appeals, albeit on an alternate ground, to uphold the zoning enforcement officer’s denial of Lowney’s application.

The trial court’s judgment was affirmed.

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