This month’s most notable HOA lawsuits (October 2019)

By Deborah Goonan, Independent American Communities

debgoonan@icloud.com

This month: a fatal construction accident and toxic mold contamination lead to liability lawsuits; conflicts of interest in alleged against a golf resort community; victory for homeowners in HOA lawsuit over holiday lights; court rules HOA can’t stop construction of a nearby group home; $41M award in parking garage defect lawsuit.


New Jersey

Condo association named in $10M liability lawsuit

The family of a construction worker, who was fatally injured while working, is suing a condo association and its general contractor. The City View condominium building, located at 318 54th Street in West New York, was in the midst of a 5th floor renovation project in February 2018, when the accident occurred.

Antonio De Souza, 64, died shortly after he fell 10-15 feet from a ladder placed over a stairwell. Commercial Waterproofing and Restoration of Clifton was the general contractor at the time.

The lawsuit alleges that the condo association hired a contractor that lacked properly skilled staff and failed to provide a safe work environment.

If a condo association board doesn’t carefully choose its contractors, third-party lawsuits such as this one could result. In a liability lawsuit, a condo association bears the cost of legal defense, even if the court ultimately finds that the condo association was not at fault.

Regardless of the outcome of this lawsuit, if the condo association — and their contractors — were not adequately insured at the time of the incident, condo owners will be expected to pay higher assessments to cover legal costs and liabilities of the association.

A few other points to consider: the contractor in this case was 64 years old. Because there’s a nationwide shortage of younger, skilled trade workers in the U.S., older workers will sometimes be assigned to jobs that they’re no longer capable of doing.

Also, because of the labor shortage, condo associations have to compete for the best contractors. But a small condo association with a limited budget might not be able to attract the high-quality skilled workers they need.

Source:

Family of man who died in fall at construction site files $10 million lawsuit
Posted Oct 14, 2019
By Ron Zeitlinger | The Jersey Journal


Florida

Jury awards condo association $41M to replace dysfunctional automated parking garage

Four years ago, owners at the upscale Brickell House Condominium first realized their robotic parking garage was a complete flop.

The garage was designed with a robotic lift system to park vehicles without the use of a driver. But, almost as soon as the garage was opened, residents began complaining of waiting a long time — up to an hour — to retrieve their vehicles each morning.

Not long after this fiasco, the company that designed the robotic software system declared bankruptcy. The condo association sued several responsible parties, including the development group.

A jury decided that Brickell House Holdings should pay the condo association $40.6 million to replace their faulty parking garage.

However, an attorney for the development group says they will appeal the decision, because Brickell House Holdings’ insurer already settled with Brickell House Condo Association for $32 million in 2018.

The condo association’s attorney says that owners have been without a parking garage since 2015, so its residents have had to pay for parking elsewhere in Miami.  Buyers paid a premium for their condos, in anticipation of enjoying convenient parking using the high-tech system.

We’ll see if this multimillion dollar award sticks following appeal.

Source:

Brickell House condo association scores $41M over failed parking garage
The car garage was supposed to automatically move cars into their designed spaces, but allegedly never worked properly
TRD MIAMI /
September 03, 2019 04:30 PM
By Keith Larsen

 

Court rules HOA cannot stop construction of group home on land adjacent to their community

Wellington View Homeowners’ Association has been trying to stop construction of a group home outside of the entrance to their community. HomeSafe, a non-profit organization, plans to build a dwelling for 12 at-risk teen boys on a three-acre parcel of land that was once owned by Wellington View HOA.

The HOA sued Palm Beach County and The Children’s Place at Home Safe Inc., last December, shortly after the County approved construction of an 11,000 square foot home on the property.

The HOA argued that, even though it no longer owns the land in question, it should be developed as a park, not a group home.

Predictably, three circuit court judges — James Nutt, Donald Hafele and August Bonavita — unanimously denied the HOA’s request to stop HomeSafe from proceeding with construction.

But the case highlights how the exclusive nature of HOAs often leads to attempts to undermine the greater good.

Source:

Judges deny HOA’s request to quash group home decision
By Hannah Morse | Palm Beach Post
Posted Aug 23, 2019 at 11:06 AM

 


 

Virginia

State Supreme Court rules homeowners can keep their year-round holiday lights

Belmont Glen neighborhood is a single family home planned community in Ashburn, Virginia. Each home is valued at or near $1 million.

For the past few years, homeowners have been embroiled in a lawsuit with their HOA. The issue: the homeowners’ nearly year-round display of holiday lights.

Last year, a circuit court ruled in favor of Belmont Glen HOA, ordering the homeowners, Sanjay Sainani and Sona Sainani to pay $884 in fines and $39,000 in attorney fees to their HOA.

Between 2014 and 2016, the HOA not only fined the homeowners, it also suspended their voting privileges and their access to HOA amenities.

But last August, the Virginia Supreme Court overturned that verdict, saying the HOA’s rule against holiday light displays is unenforceable. Justice D. Arthur Kelsey wrote that the HOA’s Covenants, Conditions, and Restrictions (CC&Rs) did not grant specific authority to restrict the timing of holiday light displays.

According to court records, Belmont Glen HOA adopted holiday decoration guidelines for their Architectural Rules Handbook in 2014. Those guidelines permitted limited-time holiday light displays for four holidays: Halloween, Thanksgiving, Winter Holidays, and the Fourth of July. In 2015, the HOA amended the guidelines to include the holiday of Diwali.

A homeowner who wished to display lights at other times of the year was expected to get the approval of the Architectural Review Board (ARB).

However, the Supreme Court points out that Belmont Glen’s CC&Rs do not give the HOA “broad authority” to make and enforce rules with regard to seasonal guidelines, including holiday lighting.

In fact, Belmont Glen’s CC&Rs limit lighting displays only when they create a nuisance to neighboring residents. And the ARB only has limited authority to review actual structural changes to a home or lot. In the court’s opinion, a temporary string of lights does not create a nuisance, nor is it a permanent fixture subject to review of the ARB.

In short, and HOA cannot imply power that is not clearly expressed in its governing documents.

This case illustrates that some U.S. courts are becoming more inclined to limit an HOA’s power to enforce rules of aesthetics.

However, another court may rule differently if a community’s CC&Rs provide specific, written authority to set aesthetic guidelines and enforce architectural standards.

Sources:

How a Loudoun Co. family’s year-round holiday lights sparked a lawsuit
Neal Augenstein | @AugensteinWTOP

Read the Supreme Court Opinion:

SANJAY SAINANI, ET AL. v.  BELMONT GLEN HOMEOWNERS ASSOCIATION, INC.


West Virginia

POA sues former Declarant-controlled board, management company

Here’s a legal dispute between homeowners and a Property Owners Association (POA) board appointed by the former Declarant of the Glade Springs Village resort community. The interesting twist to this story: the former “lead investor” who once controlled the POA for the golf community was none other than West Virginia’s Governor, Jim Justice.

Justice Holdings, Inc., purchased the Glade Springs resort property in 2010, and, along with it, the original developer’s rights.  Justice appointed three members to the board of directors: Elmer Coppoolse, James Miller, and Elaine Butler. Coppoolse was majority owner of EMCO Glade Springs Hospitality, LLC. EMCO served as the management company for GSVPOA.

According to a local report in West Virginia Metro News, homeowners only recently wrested control away from the three board members originally appointed by Justice. Shortly after the independent homeowner board took over, it also ended its management contract with EMCO.

Now owners seek a full accounting of moneys collected by EMCO, under the Declarant-controlled POA board. EMCO was supposed to collect golf fees from resort guests, and deposit that money, less administrative fees, into the accounts of the POA.

Board members also want to see records of revenue collected under lease agreements with the pro shop and food concessions for Woodhaven Golf Course. The current POA board says that EMCO is “in arrears” on lease payments and resort guest fees.

There’s also the matter of who should repay the $14 million tax increment funding (TIF) bonds that are coming due — the POA or Justice Holdings, LLC?

Glade Springs Village POA has now filed a lawsuit against EMCO Glade Springs Hospitality, LLC, its owner and former POA board member Elmer Coppoolse, and former board members James Miller and Elaine Butler.

The POA asks the court to order an audit and investigation, to determine how much money is owed to the POA by the former management company. The POA also alleges the former board members breached their fiduciary duties, and seeks compensatory damages and attorney fees.

All three former board members appointed by Justice happen to be close political allies of the current Governor.

Sources:

Glade Springs homeowners sue over longstanding financial questions
By Brad McElhinny in News | August 17, 2019 at 3:20PM

Read the lawsuit. 

 


Tennessee

Homeowners sue condo association after being sickened by toxic mold

The Heritage Landing Condo Association is facing a $10 million lawsuit filed by two homeowners, John “Tim” and Martha “Muffy” Mitch in August.

In their lawsuit, the couple claims that they fell ill due to exposure to toxic black mold growing in the crawl space beneath their home. The homeowners provide medical evidence of their respiratory and gastrointestinal problems, which their doctors say were caused by exposure to toxic mold.

When the pair moved out of their condo, their health improved. They notified their HOA management company, Associa Tennessee Inc., about the mold, and were promised it would be cleaned up.

The lawsuit alleges that the contractor hired by the association didn’t do an adequate job of removing the mold from their condo. Therefore, the owners have been unable to move back into their home.

Now the Mitches’ neighbor Yvonne Swafford, reports experiencing similar respiratory symptoms. She, too, has also moved out of her home to protect her health.

The homeowners have documented proof of the presence of mold in their unit, which might convince the courts that the condo association failed to maintain the common areas.

But did the mold cause the homeowners’ health issues?

Lawsuits seeking compensation from association-governed (or apartment) communities due to medical problems from mold are becoming more common. However, it can be difficult to prove that a resident’s health problems are caused by mold, and not other environmental factors.

In the meantime, three homeowners are displaced from their homes indefinitely. And they are still required to pay taxes and condo fees, even though they cannot live in their homes. ♦

Source:

Heritage Landing residents file lawsuit, say mold caused medical problems
August 19th, 2019 by Mark Pace | Times Free Press