non-profit organizations

A community association board of directors makes assessments on its homeowners to cover unforeseen costs instead of collecting monthly dues. The board does not believe in holding a large reserve of assets. The bylaws mandate that each owner comply with the decision of the board. One homeowner ignored the numerous requests from the board to pay the assessment. Finally, a lien was placed against the property. The homeowner counter-sued the board of directors alleging mismanagement of funds as well as libel and slander for printing his name in the association newsletter for being delinquent.

The community association board entertained bids by companies to waterproof the deck around their pool. The contract was worth approximately $120,000. ABC Company submitted the lowest bid and was told the work would have to be started in three months and completed in two weeks. ABC Company bought a performance bond, blocked off the necessary time and, in so doing, refused to take other jobs. The board was having other work done around the pool and encountered problems. A week before ABC Company was to begin work, the board notified them they couldn’t start and it might be another three months before the could come on the site. ABC Company sued the board for breach of contract.

A homeowner presented plans to build a home on a corner lot. The community association board affirmed the plan based on the plan’s presentation of the driveway coming out on the street in front of the house. During the process of building the home, the homeowner changed the plans, which caused the driveway to come out onto the street closest to the garage. The board threatened them with a cease and desist letter citing the bylaws requiring prior approval of the plans. The homeowner sued the board claiming the board did not have the authority to tell the homeowner where their driveway can be placed.

The community association board has a “no pets” rule. The neighbors of a unit owner complainedto the board that the no pet policy was not being enforced. They have seen a cat in the window of the unit next door. The board, wanting to abide by their bylaws enforces the rule and sends a letter reminding the unit owner that no pets are allowed. The unit owner denies having a pet, and periodically the neighbors continue to make similar complaints. The board advises the management company to write a letter to the owner advising to get rid of the cat or face a daily fine. The owner admits she has a cat, but needs it for therapy for her disability of depression and in turn asks for a reasonable accommodation under the Americans with Disabilities Act. The board requests a medical note, and the board rejects the note that is submitted and states it is not enough documentation to make an acception to the rules. The owner produces a note from a local clinic signed by a third year resident. At the time she presents the note she also files a claim of discrimination with the State Human Rights Commission (HRC). The HRC concludes that under the guidelines, once the owner produced the note, the board was in violation to continue any fines or attempts to collect the fines. The HRC awarded damages to the owner and the board was left with hefty legal bills.

A homeowners association held an election to vote in a new board of directors. A total of seven candidates were running for five positions on the board. It was identified that there was a discrepancy between the total number

of votes and the total number of eligible voting members. Subsequently, a recount was performed and it was discovered that 20 votes were ineligible due to the members being in arrears of their dues. The petitioners challenged the validity of votes stating that a member in arrears is ineligible to vote. The board stood by their decision to allow all members to vote as they felt the bylaws were not clear. The members challenged the board’s decision by bringing a lawsuit demanding the amendment of the bylaws, clarification of the voting process as well as election of the individuals that would have won without counting the ineligible votes. The board did not prevail with their interpretation of the bylaws as well as the current election. As part of the settlement agreement, they were to re-write the bylaws and change their voting process. It took over a year in litigation with ample defense expense to come to a resolution.