Tag: Business Judgment Rule

Facts: A unit owner sued the association, claiming that it had abused its power by amending and enforcing the rules and regulations concerning the leasing of units, parking, and pet ownership, and authorizing the assessment of late fees for unpaid common area charges. The owner claimed that, as a result, he shouldn’t have to pay late fees for his unpaid common area charges.

Facts: Four of the 23 homeowners within a community association sued the board of directors, claiming that the undertaking of certain expenditures using association funds was outside the scope of the board's powers as enumerated in the declaration, bylaws, and house rules. Specifically, the group claimed that the expenditure of funds for the hiring of an engineer and the procurement of permits, designs, and surveys in connection with a sewer connection project is unauthorized by the governing documents.

Every planned community has homeowners association rules, tailored specifically to the nature of the community, its members, and its board of directors. For example, an age-restricted community will have different rules than a condo building. It's important that, as the community manager, you strike a balance between making sure that the agreed-upon rules designed to keep the community operating successfully and its members happy are appropriately, but not overzealously, enforced.

Facts: A planned unit development (PUD) zoning ordinance established a residential community with a homeowners association. The association's declaration had a restrictive covenant banning members from operating businesses from their homes. The association later discovered that two members were running day care businesses in their homes, which violated the restrictive covenant in the declaration.