Here are Details on Board Training

Our Back-to-School presentation of the Community Association Institute’s Board Leadership Development Workshop is less than two weeks away!

Here are the details:
The course will be at the Salt Lake City Marriott at 220 South State Street, and will begin at 9 a.m.. We’ll seek to conclude the class by 3 p.m.

We’ll serve a continental breakfast and lunch, so come ready to eat and learn!

Registration is though the Utah CAI web page, located here. Registration costs $31 to cover the cost of the valuable course materials, but this gracious Utah Condominium and HOA law firm is offering scholarships to cover the entire cost of the course.

If you have questions regarding the course, give this Utah condominium lawyer or this Utah HOA lawyer a call, at 801.519.2555.


Counseling Dogs, and Their Owners

In a recently decided case, the Court of Appeals of Colorado (Division VII), affirmed an association’s prohibition of a home-based service in which “Clients… bring their dogs…where [the owner] counsels the owners to help them communicate with and train their dogs.”

In the case, K9Shrink, LLC v. Ridgewood Meadows Water and Homeowners Association, the owner, a canine behavioral psychologist, attempted to attack the validity of the covenant, as well as its applicability to her operations. The court concluded that she was precluded from challenging the covenant for many reasons, including a Colorado statute that imposes time limitations on such challenges, didn’t object to — and in fact had voted for — the amendments when they were proposed.

Having disposed of that issue, the court moved on to what would seemingly be a simple question — does the counseling of dogs and their owners constitute a “commercial pet-related activity?”  The plaintiff, however, attempted to focus on the remainder of the prohibition, which continued “…such as dog boarding kennels, catteries, or commercial breeding operations.”  The plaintiff argued that the “such as” was an exclusive limitation, and that an inquiry as to whether counseling was similar to these three listed prohibitions.

The majority of the court rejected that interpretation, holding that “The phrase, ‘any commercial pet-related activities,’ clearly refers to any activity, relating to pets, from which one attempts to earn business income.”  The majority opinion also stated they “fail[ed] to discern any remarkable difference in kind between the enumerated activities and those conducted by plaintiffs.”

There was a dissent, however, and the dissenting judge thought the activities did not violate the covenants.  Without detailing her analysis, she felt the terms “any” and  “such as…” created an ambiguity that was required to be strictly construed. She would have reversed the injunction, and remanded the case back “to the trial court for reconsideration of the plaintiffs’ claims and attorneys fees.

The main take-away from the case: don’t forget, when necessary, to include the words “but not (necessarily) limited to…”

Re-Broadcast of “Amending C, C & R’s and Bylaws”

The National Business Institute has just asked me (very nicely, I might add), if they can rebroadcast the national teleconference that I presented last May.

Here’s their email:

Good Morning Lincoln

The NBI teleconference you spoke for in May 2010 was a hit! We would like to rebroadcast this event in February 2011. We replay the recorded original teleconference. The teleconference rebroadcast involves you being available for questions at the end of the event.

We would like to hold the rebroadcast sometime during the week of Feb 14th

Would you be interested?

Thanks and Enjoy Your Day!

Laurie Johnston

NBI, Inc  | Senior Legal Product Specialist | Customer Care Team

Needless to say, I agreed.  When the date and time are chosen, I’ll post the details.

Amending CC & Rs and Bylaws — National and Local Presentations

The National Business Institute has asked me to present a national teleconference on the subject of amending community association (HOAs, Homeowner Associations, Home Owner Associations, condominiums, PUDs, Planned Unit Developments — whatever you want to call them) governing documents.

The course will be held on May 17, 2010; I’m going to be looking into whether NBI will let me have a few guests in our training center, so that I’m not talking into a telephone.  I’m also looking into the possibility of a video recording for future access.

Meanwhile, over the next several days I will be working on the course materials, so if there are any sample materials that you want me to include, let me know and I’ll try to include some.

Rental Restrictions in Bylaws?

The Wisconsin Supreme Court, in an opinion released last Friday, issued an opinion which affirms the validity of rental restrictions included in a community association’s bylaws, as opposed to the association’s declaration. Several courts around the country have dealt with this issue in the past several years, with opinions coming down on both sides of the issue. And in this case, the Court was divided, with a dissenting justice arguing that the amendment to the bylaws were contrary to the declaration and the statutes, and that the restrictions needed to adopted, if at all, as an amendment to the declaration.

The case, Apple Valley Gardens Association, Inc. v. MacHutta, involved an association formed in July of 1979, by Steven MacHutta (yes, that MacHutta). The original declaration included a sentence providing that “Any lease…shall not relieve an owner from his obligation to pay common expenses or any other obligations…”

In 2002, the Association members amended the Association’s bylaws to prohibit rental of units. Ms. MacHutta, the declarant’s spouse was renting her unit, and challenged the amendment. Existing tenancies were “grandfathered”, as the dispute did not ripen until 2004, when the board refused her petition to enter into a lease with a new tenant. Nonetheless, she rented the Unit and the Association sued.

The Court framed the first question as to whether lease restrictions must be included in the declaration; the court held that the rental restriction fell within the statutory provision providing that bylaws could include “any restriction on or requirement respecting the use and maintenance of the units…,” which the Court held could include rental restrictions.

The Court next held that the provision respecting the joint liability of owners for assessments, by allowing leases, was contrary to the restriction against leases.

“Condominium ownership is a statutory creation that obligates individual owners to relinquish rights that they might otherwise enjoy in othr types of real property ownership”, the Court stated. Amendments to the bylaws were foreseeable and enforceable, even if not as readily discoverable by virtue of recordation, and even if more easily achievable than declaration amendments. “The fact that lenders and purchasers rely on recorded declarations is irrelevant. If lenders and purchasers wish to know whether and under what conditions a condominium unit may be rented out, they may easily inquire as to both the declaration and the bylaws.”

Next, the Court held that the declaration’s reference to the conditions under which leases must be made did not mandate that they be allowed. The Court stated: “this provision neither grants a right to rent one’s unit nor prohibits it…”

Lastly, the court dismissed a statutory-based challenge to the provision, holding that a marketability statute did not prohibit the bylaw.

The dissent disagreed, arguing first that restrictions such as rental restrictions must be in the declaration to be valid. Furthermore, the dissent argued, the amendment was contrary to, and hence prohibited by, the Declaration.

Apple Valley provides support for the Association that cannot, for whatever reason, provide rental restrictions in a declaration as opposed to bylaws. Nonetheless, this author, and the majority of practitioners in the area, encourage associations to make such significant changes in the declaration, rather than the bylaws.

You Ought to Add This…

Or at least seriously consider adding this, or something similar, to your declaration. The language below was recently upheld by the Georgia Supreme Court, which upheld the provision in protecting an association from a lawsuit filed by an owner.

The Declaration provided, in pertinent part:

From the time that the common area, or any portion thereof, is opened and put into use for the enjoyment of parcel owners, owner [developer] shall be and remain wholly free and clear of any and all liability to, or claims by, all parcel owners, and all persons and entities, of whatever kind or character, whether sounding in contract or tort, deriving from the occurrence of any injury or damage to any person or property on, or in respect of the use and operation of, the common area or any of its improvements, fixtures, and facilities; inasmuch as the control, operation, management, use and enjoyment, of the common area shall be within, under, and subject to the Association – and not owner [developer]. In this respect, it shall be the affirmative duty and responsibility of each parcel owner, and user of the common area facilities to continuously inspect the same for any defects or perils or other unsafe conditions or circumstances, prior to and during such use or enjoyment thereof; and all users of, and visitors to, the common area and its improvements and facilities shall use, enjoy, and visit, the same at their own risk and peril.

The Association successfully defended against a number of challenges to the language, ultimately succeeding in obtaining a dismissal of the Unit Owner’s personal injury suit.