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Restrictive Covenant Prohibiting Rentals to College Students Upheld

Originally posted on March 12, 2016 by Ansley

The SPUR at Williams Brice Owners Association, Inc. v. Lalla, No. 2013-001479.

In this recent Court of Appeals ruling, the Court affirmed the lower court’s holding that a restrictive covenant prohibiting the lease of condominium units to students unrelated to the unit owners was valid.

The Association filed the original action as a covenant enforcement suit and declaratory judgment action seeking determination from the court whether the covenant was enforceable and whether the Lallas were in violation. The covenant at issue provided as follows:

The rental of any unit to any student currently enrolled in a two (2) or four (4) year college, institute, or university is strictly prohibited. Additionally, any tenant of any unit shall be prohibited from having any roommate that is enrolled in a two (2) year or four (4) year college, institute or university. Any tenant in violation of this Restriction shall have their lease automatically terminated and shall have thirty (30) days to vacate the Unit.

The Master Deed goes on to create an exception for the children or grandchildren of unit owners who are students and authorizes them to reside with one other student roommate.

The Lallas argued that the covenant should be overturned based on the following grounds: (1) it is unreasonable and unenforceable; (2) it violates the Equal Protection clauses of the South Carolina and United States Constitutions; (3) it violates the Federal Fair Housing Act and South Carolina Fair Housing Laws; (4) it should be nullified on the basis of changed economic conditions; and (5) the Association waived the right to enforce the covenant.

The Court of Appeals agreed with the trial court that the covenant should be upheld as enforceable as it is binding on the unit at issue and the Lallas failed to demonstrate the covenant discriminates against a protected or inherently suspect class. Neither the Federal Fair Housing Act nor the South Carolina Fair Housing Laws recognize students as a protected class. Both laws protect against discrimination on the basis of familial status, which means a person under 18 being domiciled with a parent or someone with legal custody or the designee of such parent or person having legal custody. The court held that this classification was “wholly unrelated” to the rental restriction at issue.

The court succinctly stated its holding as follows:

[W]e find no error in the circuit court’s ruling that when the [Lallas] became owners of a unit in [The SPUR], they voluntarily and intentionally bound themselves by the restrictive covenants barring the rental of any unit to college students who are unrelated to the unit’s owner. Accordingly, we affirm the circuit court’s ruling that the rental ban provision of the restrictive covenant is binding upon the Lallas.

Emphasis added.

This site and any information contained herein should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

ADA Pool Regulation Upcoming Effective Date

Originally posted on January 16, 2013 by Ansley

January 31, 2013 is the effective date for existing swimming pool owners to bring their pools into compliance with ADA regulations, including providing accessible means of entry and exit. What does this mean to Community Associations? Associations have to consider the following:

1) Is the Association a “public accomodation” under Title III of the ADA? This definition would include, but is not limited to, condotels, associations with swim clubs, and those with events open to the public.

2) Is it “readily achievable” to remove physical barriers in existing pools? Can the Association afford a pool lift or sloped entry in the pool? Will a mounted pool lift fit in the available space surrounding the pool? What architectural renovations will be required to make it feasible?

3) Would it be “readily achievable” to purchase a pool lift in the near future? Associations should get cost estimates and start setting aside funds to move towards compliance if it is not currently feasible to purchase a lift or otherwise remove barriers.

In answering these questions, Associations should consider having a reputable company provide cost estimates for pool lifts that meet the ADA requirements and maintain this documentation as part of the Association’s records.

Please note that non-fixed (portable) lifts will not comply with the ADA requirements unless they were purchased prior to March 15, 2012. The ADA and Department of Justice (DOJ) are not proponents of non-fixed lifts because people with disabilities should not have to wait for a pool attendant to move and operate the lift. The lift should be readily available and operable by the disabled user.

This site and any information contained herein should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

FHA Condo Certification: Recent Changes Benefit Associations

Originally posted on October 29, 2012 by Ryan

HUD released new condo certification policies effective September 13, 2012. These revised regulations benefit associations by loosening some of the more stringent requirements for condo certifications under FHA.

Notable changes include:

1) FHA will now consider projects with up to 50% commercial space on a case-by-case basis and with substantial documentation.

2) Investor/entity owned units changed from a maximum of 10% to 50%, as long as 50% of the units have been conveyed, or are under bona fide contract to be conveyed to owner-occupants

3) Delinquent Assessments- No more than 15% of total units can be in arrears more than 60 days. The former regulation looked at the total delinquencies at 30 days.

4) Fidelity Bond changes for management companies- now either the association can name the management company as an agent or insured on its bond, the management company can have its own policy or the association’s policy can have a covered employee endorsement to cover management company personnel.

5) Slight changes were made to the Project Certification document requirements.

This site and any information contained herein is intended for information purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Liability for Wild Animals: Alligator Update

Originally posted on October 29, 2012 by Ryan

The Georgia Supreme Court overruled the court of appeals decision holding a homeowners’ association liable for an alligator attack on a guest. Last November, I wrote an article explaining how this case may have come out in South Carolina.

The Georgia Supreme Court used a similar analysis in determining that the association should not bear any liability. Specifically, the court addressed the fact that Ms. Williams knew of the potential for alligators in the pond because she had previously seen gators there. Since the danger was open and obvious to her, the association did not have a duty to warn.

The court was split 4-3 on this decision. The dissenting opinion by Justice Benham argues that there was no “competent” evidence that Ms. Williams was aware that alligators over seven feet could be found in the area. The association has a policy of removing gators that exceed seven feet or are particularly aggressive. The animal that fatally attacked Ms. Williams was eight feet in length.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Covenant Enforcement: Height Restriction Upheld

Originally posted on October 29, 2012 by Ryan

Greenbank Beach & Boat Club, Inc. v. Bunney, No. 66308-9-1, Wash. App. Ct., May 29, 2012.

In this case, the association brought suit against Bunney for violating a 15’ maximum height restriction on dwellings within the neighborhood. Bunney submitted building plans for a home six feet taller than the maximum allowed height and these plans were rejected. In spite of this and further attempts by the association to bring him into compliance, Bunney constructed the home as planned.

At trial, Bunney argued that the association abandoned its right to enforce the height restriction by selectively enforcing it. He presented evidence that other homes in the association exceeded the height restriction.  The court determined that the association had not waived this restriction and further found that Bunney acted in bad faith by continuing to build a home that he knew was in violation without attempting to resolve the issue with the association.

As a result, Bunney was ordered to modify his home to comply with the 15’ restriction.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Punitive Fining is Outside Board’s Authority

Originally posted on August 21, 2012 by Ryan

Fairfax Co. Redevel. and Housing Auth. v. Shadowood Condo. Ass’n,
No. CL-2010-13282, Va. Cir. Ct., May 12, 2011.

In this case, a condo association levied more than $20,000 in fines against a housing authority, which owned several units to rent to low income families. The fines were related to rules violations by the authority’s tenants and failure to provide the association with paperwork relating to the units.

The court held that the fine amount was unreasonable and punitive in nature. After analyzing the association’s governing documents, the court determined that the board’s authority to fine was limited to maintenance of common area property and association operations. The board lacked authority to issue fines as a penalty.

Before levying fines, a board of directors must ensure that the association’s governing documents permit monetary fines. The board should also draft a policy outlining fine procedures and provide notice of the policy to association members.

This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.v