HOAleader.com - Tip of the Week - June 29, 2018
Published: Fri, 06/29/18
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Why a Reversal of a Curious North Carolina HOA Ruling Doesn't Really Matter
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In early 2017, HOAleader.com reported on a North Carolina case in which an HOA was prohibited from bringing a lawsuit after a third party—not even one of its owners—argued that the board didn't follow its governing documents in deciding to bring the lawsuit. That was certainly unusual—allowing a third party to get a case against it dismissed because the HOA didn't adhere to procedures set forth in its own governing documents.
In fact, it was so odd that the North Carolina Supreme Court has now reversed that finding.
In this week's tip, we discuss why the new ruling shouldn't matter to boards because the original lesson still stands.
The case is Willowmere Community Association and Nottingham Owners Association v. City of Charlotte Mecklenburg Housing Partnership. In a nutshell, the Charlotte-Mecklenburg Housing Partnership had the local city council rezone more than seven acres of land abutting portions of the Willowmere Community Association and the Nottingham Owners Association. It planned to develop 70 multifamily housing units on the newly rezoned property.
The boards of the WCA and NOA united to file suit against the CMHP and city council. The defendants countered by filing a motion to dismiss arguing that the HOAs' boards didn't follow the process set forth in their governing documents to bring a lawsuit. Both boards decided to sue in decisions either by email or phone with some or all of the board members, processes that were plainly faulty under their governing documents.
The lower court held that the HOAs' bylaws required the directors to meet or act by consent without a meeting. Since neither HOA did that, both lacked the legal authority to bring their lawsuit.
At the time, our experts generally agreed that while a member could seek to dismiss a lawsuit an association had filed against the member if the association didn't follow its governing documents, the idea that a third party could hold an association's feet to the fire in terms of its internal procedures was a bit of a stretch.
North Carolina's highest court thought so, too. Read how the court reached that conclusion, plus why our experts say boards still need to follow their internal procedures, in our new article: https://www.hoaleader.com/members/Update-Odd-North-Carolina-HOA-Case-Reversedand-It-Doesnt-Matter-Whit.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Rentals in Your HOA or Condo Getting You Down? What HOA Boards Need to Know About Regulating Rentals
Did you miss our recent webinar on the ins and outs of regulating rentals at your HOA or condo association? If you did, you missed a great session. But you can still sign up to watch this in-depth webinar on demand. Learn more or sign up now.
Click here to read full article:
https://www.hoaleader.com/products/regulating-rentals-in-your-hoa-webinar-b.cfm
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Update: Odd North Carolina HOA Case Reversed--and It Doesn't Matter a Whit
In early 2017, HOAleader.com reported on a North Carolina case in which an HOA was prohibited from bringing a lawsuit after a third party—not even one of its owners—argued that the board didn't follow its governing documents in deciding to bring the lawsuit. That was certainly unusual—allowing a third party to get a case against it dismissed because the HOA didn't adhere to procedures set forth in its own governing documents.
Click here to read full article:
https://www.hoaleader.com/members/Update-Odd-North-Carolina-HOA-Case-Reversedand-It-Doesnt-Matter-Whit.cfm
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California Court Throws Monkey Wrench into HOAs' Rental Restrictions
In this week's tip, we explain a California court's ruling invalidating an HOA's rental restrictions by relying on the California Coastal Act, which protects public access to coastlines. The court held that banning or regulate short-term rentals was a decision only a city or coastal commission could make, not an HOA.
Click here to read full article:
https://www.hoaleader.com/public/California-Court-Throws-Monkey-Wrench-into-HOAs-Rental-Restrictions.cfm
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California Court Bars Rental Restrictions Near Coastlines (Sort of?)
A California court has invalidated an HOA's rental restrictions by relying on the California Coastal Act, which protects public access to coastlines. The court held that banning or regulate short-term rentals was a decision only a city or coastal commission could make, not an HOA.
Click here to read full article:
https://www.hoaleader.com/members/California-Court-Bars-Rental-Restrictions-Near-Coastlines-Sort-of.cfm
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Why One HOA Is Sticking with Its Monthly Hard-Copy Newspaper
In this week's tip, we talk to an HOA that's in the newspaper business. (You read that right.) Theresa Balk, the general manager at the 1,800-home Candlewick Lake HOA in Poplar Grove, Ill., is in the newspaper business at a time when traditional newspapers are struggling to stay afloat.
Click here to read full article:
https://www.hoaleader.com/public/Why-One-HOA-Sticking-with-Its-Monthly-HardCopy-Newspaper.cfm
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