Disability Discrimination in Idaho?

There haven't, admittedly, been a lot of posts to this site, but that's because there doesn't appear to be a lot going on in Idaho condolaw. That may be related to the economy, but here's a bit of news on the regulatory front:

Justice Department Files Lawsuit Alleging Disability-Based Housing Discrimination Against Idaho Condominium Developer

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.
Posted by Lincoln W. Hobbs, Esq., CCAL at 7:38 PM 0 comments
Labels: amendment, governing documents, rentals

Get Your Pools and Spas Fixed NOW!

A recent meeting of the Utah Chapter of the Community Association Institute addressed pool safety and the need to modify association pools pursuant to the Virginia Graeme Baker Pool and Spa Safety Act; seven months ago I suggested in this post that you shouldn't even have waited for the law to take effect before modifying your pools and spas. (The law took effect in December.)

Now, unfortunately, there's news of another unfortunate death due to a pool drain. Five-year-old Linnea Rose Oldham of Snyderville, Utah was killed in a tragic drain-related incident while vacationing in Mexico; according to the article in the Park Record, the family wants the story to get out, in hopes that it will prevent other similar tragedies.

Please, if your association's pools and spas have not been modified, shut them down and get them fixed now.

Oh, and by the way, if you are interested in joining the Utah Chapter of the Community Associations Institute, we'd love to add you as a member.

Service Animals

A recent edition of the New York Times Magazine included a rather lenghty, but interesting and (I thought) balanced article on the controversy surrounding companion animals.

The article addresses a number of service and companion species, including miniature horses, monkeys, goats, parrots, iguanas and ducks. The article addresses the Justice Department's proposed rulemaking respecting the Americans With Disabilities Act. As regular readers know, the ADA does not apply to most community associations. The applicable act in the community association realm is the Fair Housing Act, and it has many similarities, but also significant differences.

Because many courts and most owners don't draw a distinction between the ADA and the FHA, however, and because the issues in the article apply to both Acts, I recommend it to those who are interested in the issues. Please remember, however, that the article deals with the ADA, and the rights and responsibilities of associations and residents under the FHA differ greatly from the rights and responsibilities of providers and customers under the ADA.

Dropping Gas Prices, Dropping Trash Prices

Not that there's a direct correlation between those two. Rather it's the tanking economy that leads to less expensive (used) gas tanks and their contents.

Recycling, it appears, may be yet another victim of the economic downturn. As demand for new goods drops, so does the demand for the recycled products that those new goods are replacing, as well as the packaging that they came in.

This New York Times article details the problem; the bottom line is that municipalities are back to paying for their recycling programs.

Don't let this bad news discourage you and your association from actively recycling, however. Low gas and trash prices should not distract anyone from the need to reduce consumption and increase conservation.

CAI Guidelines

The Community Associations Institute (CAI)'s Center for Community Association Volunteers (CCAV) developed the Community Association Governance Guidelines (PDF)—12 principles that can help homeowner volunteer leaders build better communities.

ANNUAL MEETINGS. Conduct at least one membership meeting annually, providing at least two weeks notice to homeowners and more than two weeks if specified in the governing documents or dictated by state statute.

ASSESSMENTS. Collect assessments and other fees from homeowners in a timely and equitable manner and in accordance with state statutes and board-approved procedures.

COMMUNICATION. Provide at least one form of regular communication with residents, and use it to report substantive actions taken by the board.

CONFLICTS OF INTEREST. Disclose all personal and financial conflicts of interest before assuming a board position and, once on the board, before participating in any board decisions.

ELECTIONS. Hold fair and open elections in strict conformance with governing documents, giving all candidates an equal opportunity to express their views and permitting each candidate to have a representative observe the vote-counting process.

FINANCIAL TRANSPARENCY. Share critical information and rationale with residents about budgets, reserve funding, special assessments and other issues that could impact their financial obligations to the association. Give members an opportunity— before final decisions are made—to ask questions of a representative who is fully familiar with these financial issues.

FORECLOSURE. Initiate lien and foreclosure proceedings only as a last step in a well-defined debtcollection procedure—and only after other, less-disruptive measures have failed to resolve a serious delinquency issue in a specified period of time.

GOVERNANCE AND THE LAW. Govern and manage the community in accordance with all applicable laws and regulations. Conduct reviews of governing documents to ensure legal compliance and to determine whether amendments are necessary.

GRIEVANCES AND APPEALS. Allow residents to bring grievances before the board or a boardappointed committee, and follow well-publicized procedures that give residents the opportunity to correct violations before imposing fines or other sanctions.

RECORDS. Allow homeowners reasonable access to appropriate community records, including annual budgets and board meeting minutes.

RESERVE FUNDING. Account for anticipated long-term expenditures as part of the annual budget development process, commissioning a reserve study when professional expertise is warranted.

RULES. Enforce all rules, including architectural guidelines, uniformly, but only after seeking compliance on a voluntary basis. Distribute proposals for new rules and guidelines to all homeowners and nonowner residents. Advise them when the board will consider new rules and encourage input. Once adopted, new rules and effective dates should be distributed to every owner and resident.

Note: Laws governing community and condominium associations vary considerably from state to state. In addition to understanding and adhering to these laws, community
association leaders need to be aware of legislative and regulatory issues that could affect their associations. You can do that by joining CAI and supporting your state’s
Legislative Action Committee.

The Community Association Governance Guidelines are offered by CAI’s Center for Community Association Volunteers (CCAV) to help board members and other community leaders create and sustain more effective, harmonious communities. This initiative supports CAI’s mission of making community associations better—even preferred—places to call home.

Garage Condos

A company called GarageTown USA has developed a number of garage condominiums in Idaho and a few other states, and they have recently announced plans to franchise in other states, including Utah.

There are some very interesting ideas in their concept. As they describe it:

You own and control your space. Condo owners receive a titled deed, just like any other real estate.

You can gain access to your space 24 hours per day, 365 days per year.

You control the security level of your space.

You can totally customize your space to match your needs - from colors, flooring, mezzanine structures, etc.

Your space can include high speed Internet and cable T.V. at most GarageTown locations.

You decide what temperature is right for your space.

You benefit from all real estate appreciation and may sell your unit at any time. (The perfect starter real estate investment!)

You can participate in all real estate tax benefits which may include 1031 exchange, depreciation, mortgage interest and property tax deductions. Please check with your tax professional for your specific requirements.

You and your family enjoy the benefits of the Club House - climate controlled, big screen T.V., bathrooms, showers, mini-kitchen, high speed Internet.

You can become part of a community of like-minded people who have interests and hobbies similar to yours.

What their information doesn't disclose are the inevitable permitted and prohibited uses. My assumption is that their governing documents are opposite in almost every respect to what we are used to -- e.g. residential uses are prohibited; derelict cars are permitted, if not encouraged; and business uses appear to be expected.