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This is a classic story of a divided association Board. Two Board Members think one way while the third Board Member disagrees. In this case, the two new Board Members made some criticisms of prior Boards. The single Board Member, who happened to be the Board President, was on the previous Boards being complained about. This is (unfortunately) not a unique story. The twist in this case is that the solo Board Member filed a defamation suit against the Association. I have had lots of people related to Associations – Board Members, property managers, contractors – ask me about defamation or libel law suits. This is one of the few times I have seen a case make it to Court.

The solo Board Member claimed that the other two Board Members made defamatory statements about him. He alleged that the statements lowered his esteem and reputation among the Board Members and the vendors who work with or for the Association. He said that the two Board Members’ statements caused people in the neighborhood not to associate with him and to “discount his authority as a Board Member.” 
Continue Reading Sticks and Stones May Break My Bones, But Publically Criticizing My Actions as President of the Executive Board Will Never Hurt Me

This is a post about reasonable accommodations that does not involve an emotional support animal. I cannot remember the last time I did not write about dogs. Recently, the Pennsylvania Federal Courts ruled that an Association does not need to provide the exact accommodation requested, if the Association offers accommodations that achieve the same function.

In this case, a resident needed a walker to get around. She would use the walker to get from her condominium unit to the lobby of the building. From there, she would leave the walker in the lobby of the building and use her cane to get to her car. The resident insisted that she needed to leave her walker in the lobby of the building.

The Association was not happy leaving the walker in the lobby. It offered a handful of possible solutions. The Association offered to store the walker at the concierge’s desk and retrieve it anytime she asked. They offered to have someone bring the walker to her parking space so she could use it to get out of the car. This building has valet parking, so the Association offered to allow her to use the valet parking (presumably free of charge). The resident rejected all of these solutions. She insisted that she needed to store her walker in the lobby.

The resident sued the Association under the Fair Housing Act, claiming that they did not provide a reasonable accommodation for her disability. The District Court and the Third Circuit Court of Appeals both sided with the Association. In doing so, the Court made two extremely important points that help guide Associations.
Continue Reading Associations are Only Required to Make Reasonable Accommodations, Not All Accommodations

Associations and Unit Owners frequently disagree over who is responsible to pay for repairs to certain items.  Sometimes it is easy to figure out.  The Association needs to pay for repairs to the community swimming pool, and the Unit Owner needs to fix the stove.  Whenever the item to be repaired gets close to the boundary of the Unit, however, the answer to this question becomes more difficult.  I came across an interesting case, Winchester Condominium Association v. Auria, where the question was who is responsible to pay for re-wiring a wall outlet: the Unit Owner or the Association?

In this case, the Association required all of the Unit Owners to replace aluminum wiring in the outlets of their Units.  The Unit Owners were informed that the replacement was required for safety reasons and for the Association to maintain property insurance. [Note:  I have done this a few times for dryer vents, pans under hot water heaters and fireplace insulation.]  Every Unit Owner made arrangements to have the wiring in their outlets replaced.  Every Unit Owner, that is, except for one. 
Continue Reading Wiring: Where Does the Common Element End and the Unit Begin?

… no matter how much they want to. Many planned community and condominium declarations have a confession of judgment paragraph.  These are usually towards the back and written in all caps (just like my father-in-law sending an email).  They seem to permit associations to bypass all of the demand letters and District Justice courtrooms, and just enter a judgment against the Unit Owner.  But what looks good on paper doesn’t always work in practice.  Pennsylvania Courts just re-affirmed the long-time rule that Associations cannot confess judgment against Unit Owners.

Residential condominium or homeowner association assessments are a “consumer credit transaction.”  This means that the assessments are used to pay for goods or services that are primarily for personal family or household use.  Pennsylvania law says that a person cannot enter a confessed judgment against another for a debt that comes from a consumer credit transaction.  In the case that I read, the Association and the Unit Owner entered into a payment plan.  When the Unit Owner stopped making payments, the Association entered a confessed judgment against him. The Court struck the confessed judgment on its own – it did not even wait for the Unit Owner to make a request. 
Continue Reading Associations Cannot Enter A Confessed Judgment Against Unit Owners…

One of the most important pieces of advice I give builders and developers is to “get it in writing.”  It turns out that when you get it in writing is also critical.  A big national builder found itself in Court with a home buyer because the builder did not put its arbitration clause in the Agreement of Sale. The builder used a form purchase agreement which referenced the builder’s limited warranty. Months later, at the settlement table, the builder finally gave the buyers the limited warranty. The limited warranty contained a requirement to arbitrate all disputes.  When the buyers later had problems with their home, they went directly to Court instead of to arbitration. The Pennsylvania Superior Court said the arbitration clause was not enforceable because it was not provided at the time of the Agreement of Sale.  The only mention of arbitration was provided months later, after the Agreement of Sale was signed.
Continue Reading Real Estate Developers: Make sure all of your important contract provisions are included in the Agreement of Sale

Lots of Association board members worry whether the Association is required to enact rules to control dangerous dogs.  In McMahon v. Pleasant Valley West Association, the Commonwealth Court ruled that an Association does not have a duty to force a unit owner to maintain, control or confine their dogs on the dog owner’s property.  The Association also does not have a duty to prevent dogs from harming other unit owners.  Because they have no duty to control the dog, or to protect unit owners from harm caused by the dog, the Association was not responsible for injuries to the unit owner.  The Court noted that there was no “special relationship” between the Association and the dog owner or the victim of the dog attack.  The Court noted that the Association did not act to “provide any additional protections against an attack by the … dogs over and above the protections provided in the dog law….”
Continue Reading Homeowners’ Association is not required to protect residents from dogs

Very often, a real estate developer is only active in a project until the subdivision plan is approved.  At that point, the developer often sells some or all of the development rights to the builders who actually construct and sell the homes. The developer may not realize that it usually retains liability for the completion of the community, even though the developer and builder planned to pass that responsibility onto the builder.  Why?  Like most legal surprises, the reason is not taking care of the details of the transaction.

In Hillside Villas Condominium Association, Inc. v. Bottaro Development Company, a neighborhood was created using this typical model.  The developer created a community in nine separate phases. The builder constructed the homes, and paid the developer every time a home was sold. This looks like a typical residential condominium project. Whenever a phase of the community was added, the developer assigned special declarant rights to the builder. This allowed the builder to construct and to legally declare the units. The developer retained all of the declarant rights that were not specifically transferred or assigned to the builder.  So long as the builder sold at least four units per year, this relationship would continue until the community was sold out.

In all of these relationships, the problem comes when the builder fails to complete something.  Here, the storm water management basins were not completed, and the roads required repairs totaling $900,000.00.  The Association sued both the builder and the developer. 
Continue Reading How to Avoid Declarant Liability in a Condominium

* House Bill 595 was signed by Governor Tom Wolf on Monday, May 7, 2018.  The Bill becomes effective on Wednesday, July 6.

The Pennsylvania General Assembly passed House Bill 595, which is expected to be signed by Governor Wolf.  This Bill gives a process for deciding disputes in Condominium and Homeowners’ Associations.  There are a few things that every Association should know about this new requirement.  They are:

  • Most Associations need to adopt bylaws or rules and regulations that establish Alternate Dispute Resolution (ADR) procedures. This includes procedures for disputes between two or more unit owners and/or between a unit owner and the Association.
  • A “unit owner in good standing” can file a Complaint with the Attorney General’s Bureau of Consumer Protection for a violation of the Act relating to meetings, quorums, voting, proxies, and Association records. Previously, this option was available only to disputes over Association financial records.
  • A “unit owner in good standing” is someone who has no past due assessments. So a unit owner that is behind on their assessments cannot file a Complaint with the Bureau of Consumer Protection.  Except that if the unpaid assessments are related to a Complaint filed with the Bureau of Consumer Protection, then the unit owner is in good standing regardless of unpaid assessments.
  • A unit owner cannot file a Complaint with the Bureau of Consumer Protection until he or she has exhausted the ADR procedure or at least 100 days after the unit owner started the Alternative Dispute Resolution procedure. If there is no ADR procedure, the unit owner can go straight to the Bureau.
  • Finally, if a unit owner has a dispute with the Association and wins, he or she may be entitled to an award of costs and reasonable attorney’s fees.

These additions to the Uniform Condominium Act and the Uniform Planned Communities Act are intended to help owners and Associations settle their differences without going to court.  In order to do this, Associations will need to take some steps to prepare themselves:
Continue Reading Alternate Dispute Resolution Comes to Association Communities (Whether they want it or not)

I have written a number of times on this blog about providing reasonable accommodations for “service animals” and “emotional support animals.”  This legal battle continues to affect condominium and homeowner association communities.  A recent case shows a new way that a condominium association could get in trouble for refusing to provide a reasonable accommodation: because of a neighbor’s blog post.

Estate of Walters v. Cowpet Bay West Condominium Association, begins with the “usual” issue.  Two condominium unit owners sought to keep “emotional support dogs” in the condominium.  The condominium’s rules absolutely banned pets.  In this case, the Court determined that the unit owners were disabled, and that the support animals were necessary to allow them the use and enjoyment of the condominium unit.  Because of this, the condominium association was required to make a reasonable accommodation under the Fair Housing Act.

The concerning part of this case arises from the blog of some disgruntled neighbors.  The opinion from the United States Court of Appeals, Third Circuit, quoted a number of blog posts from residents of the community that opposed the emotional support dogs.  One neighbor replied on a blog post “isolate them [the unit owners] completely to their little “dog patch” on the beach and ignore them at every venue or occasion!”
Continue Reading Could a Condominium Face Legal Trouble Because of Residents’ Blog Against Emotional Support Animals