Guest Post By Weissman, Nowack, Curry & Wilco, P.C.
About one in six people in the nation, or roughly 50 million residents, lives in a community governed by a community association according to a July 27, 2003 article in The New York Times. The article reports that about 20 million homes, out of roughly 106 million homes in the country, are governed by a community association, which is a 21 percent increase since 1998, and that 75 percent of respondents to a 1999 Gallup poll said they were “very or extremely satisfied” with their community associations. Yet the purpose of The New York Times article was to give a negative spin to community associations by showcasing a few homeowners who had run into problems with their associations after those homeowners refused to abide by their communities’ covenants.
Community associations, including homeowners associations, condominium associations, and townhouse associations, serve many crucial functions. When there are common elements or common areas within a community — ranging from condominium building roofs and exteriors, to swimming pools, tennis courts, and playgrounds, to entry features, landscaping, and greenbelt areas — a community association is essential in order to provide the necessary maintenance and repair of those items. Community associations are also essential for the enforcement of community covenants. Community covenants cover a wide range of activities and obligate owners to maintain their property and mow their lawns, pay assessments, and obtain approval before making exterior modifications. Community covenants additionally require owners to comply with use restrictions, such as prohibitions against junk vehicles or parking an RV in the front yard.
When owners follow the covenants, associations run smoothly. Property values of the homes in the community are protected, and there are generally sufficient funds for the association to undertake its maintenance and repair obligations. It is when owners refuse to abide by the covenants that enforcement becomes necessary. And it is the occasional enforcement case that sometimes draws negative media attention.
Generally, there are three factors in enforcement cases that draw the most media attention. The first is that the underlying covenant violation is usually not that severe. It is easier, of course, for the media to sensationalize the enforcement actions of a community association against an owner who has a relatively small violation. Nevertheless, an association’s board of directors, which is charged with enforcing the covenants, needs to keep in mind that covenants within a community are akin to private laws that all of the residents within the community agree to follow when they purchase their homes. By analogy, the police do not only enforce the major pubic laws, such as laws against murder, they also enforce the more mundane laws, such as noise violations and laws against speeding or blocking an intersection. Community associations must likewise uniformly enforce all of the covenants within the community. Uniformly enforcing the covenants is especially important in order to prevent violators from asserting that the association is selectively enforcing the covenants, or is arbitrary and capricious in its enforcement, or has waived its enforcement rights. The fact that a reporter, who does not live in your community, believes that some covenants within your community should be ignored when violated is not something the board should take into account when uniformly enforcing the covenants.
The second factor that generally appears in media stories that are critical of community associations is that the owner who is violating a covenant is not going to let anyone tell him what he can do with his property. Our country was founded on the principles of rugged individualism and self-determination. While this makes for sensational news stories, the fact of the matter is that when people move into communities with covenants, they give up the right to do whatever they wish to do with their property. The covenants must instead be followed. Although the vast majority of owners who are confronted about their covenant violations will remedy their violations, there are a small percentage of owners who will simply refuse. They in essence will thumb their noses at the rest of the community while blatantly and defiantly continuing in their violations. These owners put the board in the position of having to either ignore the violations (and have the community suffer the consequences) or undertake enforcement action.
The third factor is that a really bad consequence happens to the violator, such as large fines, legal fees or worse. This third factor is generally the crux of the news story with the reporter turning a willful violator into a victim who has suffered the wrath of an out-of-control community association. A perfect example is The New York Times article mentioned above which focuses on a homeowner in Phoenix, Arizona, who violated a relatively minor restriction regarding the placement of his trashcan. The homeowner refused to pay a $50 fine and dug his heels in with his refusal to place the trashcan in the required place. A lawsuit was eventually filed against the owner, who lost the case and was ordered to pay $11,978 in accumulated fines and legal fees. Although such an outcome can be spun in the media to reflect an unfair outcome of a small violation, the fact of the matter is that when an owner continually refuses to comply with the covenants and puts the association in the position of having to force compliance through the courts, adverse consequences can, and do, happen to the violating owner.
There are two Georgia cases that particularly illustrate this. In one case (Sprat v. Henderson Mill Condominium Association, Inc.), an owner, who was fined $25 per day for violating a leasing restriction covenant, was eventually sued by her association in order to force the owner’s compliance. By the time the lawsuit went to trial, 515 days had passed and the $25 per day fine accumulated to $12,875. The Georgia Court of Appeals affirmed the full fine amount against the owner, as well as the attorney’s fees the association incurred. In another case (Wehunt v. Wren’s Cross Condominium Association, Inc.), an owner was sued by his condominium association due to his refusal to pay assessments totaling $906. The association filed suit and obtained a judgment for the unpaid assessments and attorney’s fees in excess of $9,000. The owner, who is an attorney, appealed the judgment on the grounds that the attorney’s fees were excessive, but the Georgia Court of Appeals affirmed the award of attorney’s fees against the owner notwithstanding the fact that they were ten times the amount for which suit was brought. Georgia law clearly supports the enforcement of covenants, and when an owner chooses to be litigious instead of coming into compliance, that decision can become costly to the owner.
Turning back to the above analogy, when a person violates a traffic law, he or she is subject to a fine. If the person completely disregards the traffic laws and refuses to follow them, then escalating adverse consequences will often occur. This would not, of course, be much of a news story, and the person would receive little sympathy. Similarly, if the same person were to have a one time violation of a community covenant and become subject to a one time fine, that would also not be much in the way of news. But if he or she were to completely disregard the covenants, incur continuing fines and end up on the receiving end of a lawsuit in order to force compliance, the person may end up in the media as the target and victim of an overzealous and dictatorial community association.
Community associations are democratically run organizations where the leaders are elected by and from the other homeowners. If the homeowners within a community believe the leaders are not properly fulfilling their enforcement obligations, the owners have the right to elect new leadership. While critical news stories of community associations occur from time to time, the reality is that most owners recognize that the covenants are there to protect them. When an owner steadfastly refuses to comply with the covenants, that owner forces the association’s board of directors to become an enforcer, and the owner is responsible for the consequences. While those consequences can make interesting news stories, the real story is the board’s commitment to uphold the covenants for the benefit of the other owners.