Notable HOA lawsuits (August 2019)

By Deborah Goonan, Independent American Communities


This month: Allegations of fraudulent HOA foreclosures; derivative lawsuit involving elite golf community; CA Supreme Court considers issue of voter apathy; condo association accused of skipping elections; family sues after child drowns in community swimming pool; HOA lawsuit over alternating paint color scheme settled out of court. 

Dozens of former owners sue their condo association over fraudulent foreclosures (TX)

At least 30 current and former owners of units in Sugar Branch Condominium Association are suing the condo association in state district court.

They say their condo board is engaging in a conspiracy to force vulnerable owners out of their homes through fraudulent use of the power to impose special assessments and fines, that owners cannot afford to pay. That, in turn, leads to liens and nonjudicial foreclosures.

Dozens of owners have already lost their homes, others are at risk.

The plaintiffs further allege that the board members behind the scheme are buying up condo units at auction, for below-market prices. A majority of board members already controls about half of the 180 units in the condo association,

Legal expert David Kahne points out that in Texas, some legal protections exist for owners of single family homes in planned communities governed by HOAs. But none of those state legal protections apply to condominium associations.


Houston condo owners sued their HOA board after foreclosures, a big assessment and other issues. But state law gives them few options.
Houston Chronicle | Olivia P. Tallet | Aug. 9, 2019 Updated: Aug. 10, 2019 5:10 p.m.

Multimillionaires sue their elite golf community HOA, board member Jack Nicklaus, over allegations of self-dealing (FL)

At the moment, there are three HOA lawsuits, one of them a derivative lawsuit, in the elite Bear’s Club community.

A derivative lawsuit happens when a shareholder (a member of Bear’s Club in this case) sues a third party on behalf of the HOA, because the HOA board fails to act in support of its own members.

What’s different from any other HOA in the U.S.? In this case, owners of expensive homes at Bear’s Club can well afford to lawyer up and sue in search of justice. For most other American property owners, that’s not practical.

Bear’s Club is currently controlled by its 25 founding members, including Jack Nicklaus. The HOA legal saga is gaining some national attention, mainly because of the celebrities involved. But don’t be deceived by HOA-industry claims that what’s happening at Bear’s Club is uncommon.

Well-founded allegations of self-dealing, unfair cost-shifting, and corruption are the norm in HOA-ville, not the exception.


Bear’s Club lawsuits: residents are elite, still fear challenging Jack Nicklaus
Palm Beach Post | Alexandra Clough | July 26, 2019

Court law legal books gavel
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Short-term rental dispute turns into Supreme Court controversy over “voter apathy” (CA)

The Orchard is a 93-home common interest community in Coachella Valley, California. In 2016, the homeowners association conducted an election to vote on whether or not to institute short-term rental restrictions.

But the vote in favor of restrictions fell just a bit short of the two-thirds supermajority of all members, as required by HOA governing documents. Only 62% of HOA members voted in favor of restricting short-term rentals.

However, since 91% of members participated in the vote (and only 9% did not vote at all), The Orchard’s HOA board chose to ask a California court to override the what they saw as an onerous and impossible 67% voting requirement.

The court agreed to allow the rental restriction amendment to pass. The minority group of homeowners who have been actively pursuing vacation rentals appealed the decision, which was upheld in Appellate Court.

Now the California Supreme Court is considering an important issue: when, and under what circumstances, should a court override supermajority voting requirements?

The case centers on whether or not an HOA must “prove” voter apathy prevents the association from amending its documents.



How a short-term rental dispute in Indio landed in the California Supreme Court
Amy DiPierro, Palm Springs Desert Sun | Published 4:33 p.m. PT Aug. 2, 2019 | Updated 12:59 p.m. PT Aug. 6, 2019

Florida condo owners sue their Association for avoiding annual board elections

Condo owners are suing Turnberry Village North condominium board in Aventura for failing to hold annual elections.

According to news sources, the board cancelled elections for the past two years, and even amended its bylaws to disqualify South Tower residents from serving on the board.

Unit owners have asked the court to appoint a Receiver to hold and monitor an election.

No doubt, condo and homeowners across the nation will be watching this case closely, since avoidance of elections in HOAs is all too common.



Lawsuit accuses Aventura condo board of election violations
The unit owners want a court-ordered petitioner to hold and monitor an election on behalf of their condominium association
The Real Deal
By Francisco Alvarado | July 31, 2019 11:30AM

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Tragic drowning accident leads to million-dollar liability lawsuit against HOA (TX)

The mother of a 6-year old boy who drowned in a community pool says that the swimming pool was overcrowded, and that the life guards were not paying attention when her son needed help.

The family of the deceased child is suing a teenage life guard, the HOA, and undisclosed third party, seeking $1 million.



Family sues for $1 million after son drowns at community pool near Katy
By Taisha Walker – Reporter, Fox News 2 (Houston)
Posted: 6:24 PM, July 02, 2019Updated: 6:43 PM, July 02, 2019

HOA and homeowners settle dispute over colorful siding, despite colorful language (WY)

Readers might remember my 2018 post about and HOA lawsuit involving a paint color dispute, in rural Wyoming ranch community.

The Cody Ranch HOA didn’t appreciate the Hennessys’ choice to paint their wood siding in several alternating colors. When the HOA notified them of the violation of their covenants, the homeowners sued.

But a local paper reports that they also wrote a number nasty letters, and painted derogatory messages on their house.

Well, now that lawsuit has been settled out of court. The Hennessys will get $5,000, but they also agree to repaint their home in more muted shades by the end of this month. Both parties are supposed to refrain from disparaging the other.

Let’s see how that goes. ♦



Homeowners’ association settles suit over paint scheme, pays Cody couple $5,000
Powell Tribune | CJ Baker | Posted

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