On February 17, 2017 the Illinois Appellate Court for the First District considered three consolidated appeals brought by a condominium association seeking damages for defects in the design and construction of a condominium building. Sienna Court Condominium Ass’n v. Champion Aluminum Corp., 2017 IL App (1st) 143364. Two of the Sienna Court appeals addressed the […]
Snakebite Victim Waits While Insurance Companies Duke it Out in Court (FL)
The legal machinations involving three insurers duking it out in court over Florida premises liability is overshadowing the suffering of a Florida woman who has undergone various amputation procedures involving her lower extremities following a snakebite on the grounds of her Miami-area condo. Read the article……………..
Fla. App. Court (5th DCA) Reverses Foreclosure Judgment That Excluded Interest, Escrow
The District Court of Appeal of the State of Florida, Fifth District, recently reversed final judgment of foreclosure entered in favor of a mortgagee that omitted interest and escrow amounts due, and remanded to the trial court to modify judgment to include these amounts. In so ruling, the 5th DCA determined that the mortgagee met […]
Superior Court Explains The Personal Participation Doctrine (DE)
When is a corporate employee responsible for tortious conduct in that capacity? This decision answers that question in a very helpful way. For example, mere nonfeasance is not enough to impose liability on a corporate actor. Read the decision (PDF)…………
4/3 DCA Determines Civil Code Section 5235(c) Only Allows Costs Award To Prevailing HOA If Homeowner Action Is Frivolous (CA)
The Fourth District, Division 3 faced a first impression statutory interpretation of Civil Code section 5235(c), which provides that “[a] prevailing association may recover any costs if the court finds the action to be frivolous, unreasonable, or without foundation,” in Retzloff v. Moulton Parkway Residents’ Association, No. One, Case No. G053164 (4th Dist., Div. 3 […]
Constantly Changing Condominium Laws (IL)
A recent opinion from the Illinois’ First Appellate District, Country Club Estates Condominium Assoc. v. Bayview Loan Servicing, LLC, 2017 IL App (1st) 162459, provides that “prompt” payment of assessments is required to extinguish presale assessments under the Condominium Property Act. This ruling not only puts a new wrinkle on condominium association lien extinguishment, but […]
Fourth DCA Confirms Association Lien Foreclosure Valid Despite Pending Mortgage Foreclosure (FL)
Despite a slowing in the number of Florida mortgage foreclosure cases, many community associations still face situations where a foreclosing lender fails to timely complete its foreclosure resulting in the property sitting abandoned and not contributing financially to the community. As a result, many community associations are faced with a decision of whether to proceed […]
HOA Winning $1,881 In Damages Against Homeowner Also Was Entitled To Attorney’s Fees Of $201,750 (CA)
We do not really need to get into the specifics of Mustafa v. Mountain View Park Homeownerss Assn., Inc., Case No. E063529 (4th Dist., Div. 2 Aug. 8, 2017) (unpublished), but the end result in sobering for purposes of our blog. Basically, homeowner lost a gnarly dispute against a HOA, with HOA obtaining a whopping […]
U.S. District Court Allows Association’s Claims To Proceed For Actions During Period of Developer Control (MD)
The United States District Court for the District of Maryland has denied a motion to dismiss filed on behalf of a developer, and allowed claims of a property owner’s association to proceed that concern actions taken while the board was under the control of the developer’s agents. In Greenspring Quarry Association, Inc. v. Beazer Homes […]
SC Ct of App Rules on Jury Trials and Class Action Waivers in Master Deeds-Decision is good for developers
Based upon a settlement reached with Respondents, Petitioners filed a motion seeking dismissal of their petition for a writ of certiorari to the Court of Appeals. They also asked the Court to vacate the opinion of the Court of Appeals found at 418 S.C. 282, 792 S.E.2d 240 (Ct. App. 2016). Finding that Respondents had […]
Nevada Supreme Court rulings favor HOAs
The state Supreme Court on Thursday issued two rulings bolstering homeowners associations’ ability to sell houses through foreclosure. Nevada’s highest court unanimously ruled that a 2014 decision upholding HOAs’ ability to foreclose ahead of mortgage lenders can be retroactively applied to foreclosures that took place before that ruling. Separately, the seven-member panel also unanimously reversed […]
Headstrong HOA Board Member Puts Himself in Harm’s Way Over Fair Housing Issues
In a recent case decided by the D.C. Court of Appeals, the court heard a matter involving the intersection between community association governance and fair housing law. In this case, Wilfred Welsh, a board member of the Chaplin Woods Homeowners Association (the “HOA”), sued fellow HOA members Beverly McNeil and Alvin Elliott (the “McNeils”), claiming […]
Case Law Update: What a Recent Appellate Decision Can Tell Associations Seeking Their Attorney’s Fees for Litigation
Florida’s Third District Court of Appeals recently handed down a decision in the matter of Gonzalez v. Int’l Park Condominium I Association, Inc. that is instructive for associations and their attorneys when associations become involved in litigation and seek payment of their fees from the home or unit owner. The facts of the case were […]
Two New District Court Of Appeal Cases – Third Party Purchaser Assessment Liability And Fining Notice Requirement (FL)
If your homeowners’ association has not updated its declaration’s assessment collection provisions, then your association might be giving away its otherwise collectable assessment revenue! The problematic declaration provisions are similar to the following: “The sale or transfer of any Lot pursuant to the foreclosure or deed in lieu of foreclosure shall extinguish the lien of […]
Court Can’t Ban Resident From Discussing HOA Online–Fox v. Hamptons at MetroWest Condos
This is the third time this year I’m blogging about homeowners’ associations suppressing online speech (see my posts on the Revock and Milazzo cases). I’m pretty sure HOA online censorship is a growth industry (indeed, my CRFA primer calls out the housing/lodging industry as one of the places where anti-review clauses were deployed). If you’re […]
Court reverses restriction on man’s blogging about his condo association, management company and neighbors
From today’s opinion of the Florida Court of Appeal in Fox v. Hamptons at Metrowest Condominium Association Inc., which strikes me as generally quite right: Read the article……………
Subcontractor’s Alleged Negligence Was “Occurrence,” Seventh Circuit Says
The U.S. Court of Appeals for the Seventh Circuit, affirming a decision by the U.S. District Court for the Northern District of Illinois, has ruled that a subcontractor’s alleged negligence was an “occurrence” for purposes of a commercial general liability (“CGL”) insurance policy. Read the article……………
Developers’ Rights Decisions: Puzzling, Perturbing, and Problematic
Litigation is unpredictable. That’s no surprise to anyone who fights court battles regularly. It is also a theme reflected in three recent court decisions dealing with developer rights. In the first case, Condominiums at Lilac Lane v. Monument Garden, LLC, the New Hampshire Supreme Court ruled that additions to an existing condominium were not subject […]
California’s Anti-SLAPP Statute: A Potent, Yet Confounding, Weapon
Lawsuits designed to chill the valid exercise of the constitutional right of free speech or the right to petition, denominated as “strategic lawsuits against public participation” (or “SLAPP” suits), have taken on increasing significance over the last several decades. The classic example of a SLAPP suit is one filed by a large business against local […]
Nevada HOA Super-Priority Litigation Update: Nevada Supreme Court Rules in Favor of Lenders on Standing Issue
The Government-Sponsored Enterprises (GSEs) and their servicers scored a significant victory last week in the Nevada Supreme Court. In Nationstar Mortgage, LLC v. SFR Investments Pool 1, LLC (Case No. 69400), the court held that mortgage servicers have standing to assert, on behalf of the GSE investor, that the Housing and Economic Recovery Act (HERA) […]
Illinois Appellate Court Clarifies Palm Decision Regarding Association Collections
In Lake Point Tower Condominium Ass’n v. Waller, 2017 IL App (1st) 162072, decided on June 28, 2017, the Association filed a forcible entry and detainer action against Defendant to obtain possession of Defendant’s condominium. Subsequently, Defendant filed a motion to dismiss the complaint. Without disputing that the assessments were due, the Defendant alleged that […]
Appeals court rules construction defendants not liable in Miami injury case (FL)
The 3rd District Court of Appeal has affirmed lower court rulings of five summary judgments in cases in which a woman alleges she was injured at a condo community due to negligence in repairing the sidewalk. The case centers on Rachel Vancelette’s claims that in December 2011 she tripped on an unmarked ramp and curb […]
Court Concludes Rental Restrictions are Reasonable (CA)
Recently, many residential common interest developments have experienced an influx in the number of short-term rentals within their community. This problem is exacerbated by the increased popularity of websites such as Airbnb and HomeAway. Although profitable, short-term rentals have a significant negative impact on community associations, such as increased damage to common area and violations […]
MD Highest Court Holds That Condos May Not By Rule Suspend A Unit Owner’s Access To Common Elements For Delinquent Assessments
The Maryland Court of Appeals has invalidated a rule adopted by a condominium to suspend access to common elements for unit owners who are delinquent in paying assessments. In an opinion issued on June 23, 2017 in the case of Elvation Towne Condominium Regime II, Inc. v. Rose, No. 33, Sept. 2016, the Court held […]
Court rules that Michigan HOA cannot collect assessments after restrictive covenant expires
In Deghetto v Beaumont’s Seven Harbors White and Duck Lack Association, issued June 22, 2017 (Docket No. 330972) (Unpublished Opinion), the Michigan Court of Appeals recently ruled that a homeowners’ association could not continue to collect assessments after the restrictive covenant expired. Read the article……………
What Should Condominium Associations Do After Cypress Point? (NJ)
It has been several months since the New Jersey Supreme Court decided Cypress Point Condo Ass’n v. Adria Towers, LLC. The issue in Cypress Point was whether rain water damage caused by a subcontractor’s faulty workmanship constituted “property damage” caused by an “occurrence” to trigger coverage under a condominium developer’s commercial general liability (CGL) insurance […]
Business Judgment Rule Doesn’t Apply When the Board Acts Outside its Authority
Is an HOA Board of Directors (“Board”) entitled to protection under the Business Judgment Rule (“BJR”) when it applies an unambiguous view restriction contained in the governing documents in a manner other than written? Read the article…………….
NJ App Div Holds Foreclosing Lender Who Simply Winterized and Secured a Condo Is Not a Mortgagee in Possession and Not Responsible for Condo Fees
In a noteworthy decision for New Jersey lenders approved for publication, the New Jersey Appellate Division recently held that a lender who simply winterizes and secures an abandoned property in foreclosure is not deemed a mortgagee in possession subject to condominium association fees. See Woodlands Cmty. Ass’n, Inc. v. Mitchell, 2017 WL 2437036 (N.J. Super. […]
Injunction Against Condo Owner Illustrates Just How Ugly Things Can Get
The old adage “don’t let one bad apple spoil the bunch” definitely applies in community association living. Unfortunately, conflicts between boards of directors and recalcitrant unit owners are par for the course in associations, so it is incumbent on the boards and their property management and legal counsel to deftly contend with every brouhaha that […]
Waiver of Attorney-Client Privilege in Bad Faith Litigation (SC)
The United States District Court has confirmed in a recent decision that in most circumstances, the attorney-client privilege will be waived in bad faith litigation in South Carolina. In Contravest, Inc. v. Mt. Hawley Ins. Co., the district court was asked to determine whether the insurance company in a bad faith action had waived the […]
Colorado Supreme Court gives a boost to builders in construction defects battles
The Colorado Supreme Court gave builders a reason to cheer Monday, ruling that a homeowners association in Centennial was wrong to ignore a requirement that it first get consent from the developer before changing the way disputes over construction defects claims are handled. The 5-2 ruling in Vallagio at Inverness Residential Condo Association v. Metro. […]
HOA Fee Award Reversed Because HOA Elections Win Did Not Qualify For Award Under Frivolous Fee-Shifting Standard
Thompson v. Lakewood Hills Homeowners’ Assn., Case Nos. A144674/A146081 (1st Dist., Div. 5 May 19, 2017) (unpublished) highlights how the basis for fee entitlement can drive the result in a case. In a word, HOA was awarded fees/costs by the trial judge after HOA prevailed in an HOA election dispute with homeowner. Read the […]
Another Illinois Case Decides When an Asset Purchaser is Responsible for Liabilities as a Mere Continuation of the Seller
In our Risk Management Update of December 23, 2015, we discussed an Illinois case that had to decide when a successor entity purchasing the assets of its predecessor became liable for the debts of the predecessor. (“Mere Continuation” Doctrine Applied to Transfer Liability to Successor Entity). In that case, the issue was whether an intermediary […]
Online Harassment and Risk of Liability Under Fair Housing Laws
My colleagues and I have blogged about the importance of recognizing requests for reasonable accommodations/modifications, carefully and thoughtfully considering them, and properly responding in a timely manner. We like to think our posts on this topic have helped a few association boards make better decisions, but if the case discussed below is any indication, more […]
The Fall Of The Economic Loss Rule And Rise Of The Independent Tort Doctrine
In Florida, the economic loss rule previously prevented parties who allocated their risks and remedies in a contract from bringing a tort action. For many years, the economic loss rule only applied in two circumstances: Read the article…………
Fair Housing Act – Emotional Support Animals
A very instructive case was decided last month in a Federal Appeals Court which will demonstrate almost everything not to do with respect to compliance with the Fair Housing Act relative to emotional support animals. This case dealt with a suit brought by two emotionally disabled unit owners in a condominium community that had a […]
Ruling Illustrates Unpredictability of Fair Housing Litigation for Associations
The appellate panel of the First District Court of Appeal was divided in its recent ruling involving a Fair Housing Act discrimination complaint by a wheelchair-bound unit owner against his condominium association. The majority and dissenting opinions in the case highlight the unpredictable nature of FHA litigation for unwary associations. Read the article………………..
Bank of America seeks declaratory relief regarding foreclosure proceedings on condo
A financial institution is seeking declaratory relief regarding a foreclosure on a San Francisco condo. Bank of America NA filed a complaint on April 17 in the San Francisco County Superior Court against California Department of Consumer Affairs, Bureau of Real Estate and Dean R. Grafilo seeking declaratory relief. Read the article…………….
Why Associations and Their Managers Need to Be Wary of Debt Collections Practices and Laws
The fairly recent case of Agrelov v. Affinity Management Services, LLC, Case No. 15-14136, (11th Cir., November 9, 2016), is instructive for associations and their managers with respect to debt collections, and the trouble that associations and managers can get themselves into when trying to collect on outstanding assessments. Read the article………….
Illinois Supreme Court Clarifies Snow & Ice Removal Act
Decided by the Illinois Supreme Court on December 1, 2016, Murphy-Hylton v. Klein Creek Condominium et al. held that the immunity granted under the Illinois Snow and Ice Removal Act for the negligent removal of naturally accumulated snow and ice does not also provide immunity for injuries caused by ice arising due to circumstances unrelated […]
Anti-SLAPP and HOA Disputes
Colyear v. Rolling Hills Community Association of Rancho Palos Verdes (2017) 9 Cal.App.5th 119 is a recent example of an anti-“SLAPP” motion being a very powerful defense weapon in HOA litigation. The term “SLAPP” means “Strategic Lawsuits Against Public Participation.” SLAPP lawsuits are considered to be “generally meritless suits brought primarily to chill the exercise […]
When a Property Owner Association Approves Plans Then Rescinds Its Approval, Can It Be Held Financially Responsible? (CO)
The Supreme Court of Colorado answered that question in Mac McShane and Cynthia Calvin v. Stirling Ranch Property Owners Association, Inc. (2017 CO 38). Mac McShane and his wife, Cynthia Calvin (“Owners”) bought property, hoping to build a multi-story home overlooking the Roaring Fork Valley. The Stirling Ranch Property Owners Association (“POA”) approved the Owners’ […]
Appeals court reverses summary judgment against homeowner (FL)
Florida’s 2nd District Court of Appeal has reversed a lower court’s decision to grant summary judgment in favor of a homeowners’ association. The appeals court ruling follows a July 2016 decision by the 12th Judicial Circuit Court. The circuit court granted the Southfield Subdivision Maintenance and Property Owners’ Association’s motion for summary judgment against homeowner […]
Appeals Court Reverses Big Smoking Verdict Against Co-op (NY)
A year ago, state Supreme Court Judge Arthur Engoron sent shivers through New York City’s co-op community when he ruled that Susan Reinhard, a shareholder at the Connaught Tower co-op at 300 East 54 Street, was entitled to $120,000 in back maintenance, interest, and attorney’s fees after she claimed secondhand smoke had permeated her apartment […]
Florida Supreme Court May Decide Fate of Liens Recorded After Foreclosure Judgments
Real estate investors, municipalities, and community associations may gain some clarity about post-judgment liens if the Florida Supreme Court decides to hear Ober v. Town of Lauderdale By-the-Sea, Case No.: 4D14-4597 (Fla. 4th DCA, January 25, 2017). The case has garnered interest from municipalities, creditors and the real estate sector regarding the enforceability of liens […]
Failure to Hold Formal HOA Board Votes Dooms Two Charlotte HOAs (NC)
There are times in the practice of homeowners’ association law when courts make rulings with which we as attorneys disagree but where an underlying principle or best practice is affirmed. A prime example is the N.C. Court of Appeals’ opinion of November 1, 2016 in the case of Willowmere Community Association Inc. and Nottingham Owner’s […]
What your HOA Board Needs to Know Before You Attempt to Change Your Restrictive Covenants.
The North Carolina Court of Appeals recently rendered an opinion reiterating that all amendments to the restrictive covenants (“CCRs”) governing a planned community must be reasonable. As background, the existing law is that amendments to the CCRs must be reasonable in light of the developer’s original intent for the subdivision. This rule arose in the […]
Construction Defect Statute of Repose: Post-Closing Punch-list Work May Delay Its Start
Florida’s Fifth District Court of Appeals is shaking up the construction defect statute of repose once again.[1] A recent 5th DCA opinion implies that the 10-year construction defect statute of repose does not start to run at the closing of a purchase of a newly-constructed home if there remains punch-list work to complete after closing. […]
Insurance Coverage for Property Damage Caused by Defective Workmanship
One of the principal points of contention between insurers and insureds is whether defective construction work is, or can be, an occurrence, thereby triggering coverage. The New Jersey Supreme Court has joined a growing number of jurisdictions holding that commercial general liability (CGL) insurance policies may provide insurance coverage to insured general contractors when property […]