HOAleader.com - Tip of the Week - June 28, 2013
Published: Fri, 06/28/13
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HOA Board Beware: Are You Breaking Antitrust Laws?
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In this week's tip, we discuss a South Carolina lawsuit,
Brandriff v. Dataw Island Club Inc., in which association board
members were sued by owners for, among other things, antitrust
violations.
In Brandriff, the home owners contended the board had conspired
to create policies that benefited golf club members at the
expense of HOA members who didn't join the golf club; that the
board raised assessments on HOA owners and then transferred some
of those funds to benefit the golf club; that the HOA illegally
yoked--in antitrust law, it's called "tying"--membership in the
HOA to membership in the golf club; that the HOA restricted
owners' right to purchase membership in other golf clubs; among
other allegations.
All of those wrongs stemmed, according to the plaintiffs'
allegations, from actions taken in 2001. Before then, membership
in the golf club had been optional for HOA owners. However, that
year, the board proposed and the owners eventually agreed to
amend the bylaws to adopt the "One Island" concept. The
plaintiffs alleged that it required all owners to become members
of the golf club with the promise the change wouldn't lead to
increased assessments for capital improvements at the golf club
and that existing and grandfathered non-golf club members
wouldn't be charged for any amenity assessments or club dues.
The plaintiffs allege both of those promises were breached.
In 2010, the federal court dismissed the owners' lawsuit. The
plaintiffs' response? They refiled their suit in state court,
and the court's website reports the case as still pending.
It is unusual for an HOA board to be sued for antitrust
violations. But it's not unheard of. "I haven't seen this actual
case, but it's very, very similar to one we had locally several
years ago," says Elizabeth White, a shareholder and head of the
community associations practice at the law firm of LeClairRyan
in Williamsburg, Va. "In that case, under the so-called tying
arrangement, if you purchased a lot, you were automatically a
member of a separate equity club. Members of the association
balked at it, particularly when there was a special assessment
at the club level to rebuild one of the golf holes.
Find out more about both cases, and what you can do to avoid
landing in court yourself, in our new article:
http://www.hoaleader.com/members/866.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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HOA Board Members Sued for Antitrust Violations: Will It Succeed?
In a South Carolina case, Brandriff v. Dataw Island Club Inc., association
board members were sued in federal court by owners for antitrust
violations, among other things. The case was eventually dismissed, but
it's been refiled in state court, where it's wending its way through the
system. Here, we break down the allegations and explain what's at stake.
Click here to read full article:
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How to Handle HOA Common Area Hogs
In this week's tip, we discuss the best tactics for reining in owners who seem
to have taken over your common areas.
Click here to read full article:
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HOA Common Areas Not So Common Anymore?
Is your homeowners association being invaded? HOA lawyers are getting
complaints from owners that their HOA is allowing all kinds of activities in
common areas that are interfering with their ability to enjoy those common
areas, from classes to meetings to swim team practice.
Click here to read full article:
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Do You Need Info on Your HOA Owners' Lenders?
An HOAleader.com reader asks, "We have a small HOA in Colorado. Our bylaws
require that the board keep track of each owner's first lienor (if there is
one). What happens if a unit owner refuses to supply that information? Our
bylaws don't address non-compliance."
Click here to read full article:
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Breaching Your HOA Board Fiduciary Duties: Know Your Risks
An HOAleader.com reader asks, "Our board has failed in its fiduciary duty on
multiple accounts. So what if we take them to court? What punishment can they
get? Are they just going to get a slap on the wrist, 'Bad board'? When might
financial fees be sought from the insurance company insuring their
actions?
Click here to read full article:
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