A court decision that was recently released by a Morris County Superior Court Judge has brought to light the need for community associations to be diligent with respect to being aware of and enforcing easements and other deed restrictions. In Unfair Share Lake Arrowhead 2010, Inc. v. Lake Arrowhead Club, Inc., the judge concluded that associations that have deed restrictions that have not been enforced in the past can still enforce them--even if they are over 80 years old.
The association, Lake Arrowhead Club, Inc.(LAC), was originally created in 1927. LAC was responsible for the upkeep of the parks, roads, tennis courts, a clubhouse and other property that were part of the Lake Arrowhead community. In the community, there were essentially two groups of homeowners: members, which included those people who paid annual fees for the use of the lake, facilities and roads, and non-members, which included those homeowners who did not pay yearly fees and only used the community roadways. At the time, the payment of the fees was voluntary and they were the only source of income for the Association until 2009 when the Association decided to require all homeowners in the community to pay a $324 yearly fee. Those who wanted to use community facilities were expected to pay even more. Shortly after the fee was made mandatory, 73 paying members of the community (the plaintiffs, Unfair Share Lake Arrowhead 2010, Inc.) filed a lawsuit to put an end to the deed restriction because it had never been enforced against them in the past.
The Court's Findings
The case was divided into two parts. One part looked at the conduct of LAC specifically to determine whether or not it abandoned or relinquished any rights to impose fees on non-members. The second part involved an examination of the plaintiffs' conduct, particularly looking at whether or not they relied on the fact that the membership fees were originally optional.
The judge found that with respect to the second part of the case, the reliance claim was not pled and the plaintiffs, as a 2010 corporation, did not have standing to bring such a claim. However, regarding the first part of the case, the judge found that LAC did not give up or abandon its rights to impose fees against homeowners. The court noted that LAC had the right to change the rules in order to impose fees on everyone in the community with the understanding that along with the duty of payment came the right to use the community facilities.
More specifically, according to the court, the easement involved in this case allowed the homeowners to use the lake and roads in accordance with the Association's rules and regulations. Under easement law, "the mere non-use of an easement will not suffice to destroy the right."
What Does This Case Mean for Today's Community Associations?
Today's associations have declarations of covenants, conditions and restrictions that can be enforced more easily than those in the above case, but the case still brings to light the need for association board members and managers to be mindful of their deeds' easements and other restrictions.
If you have a community association that has questions or concerns about deed restrictions, contact an attorney at Griffin Alexander, P.C. today.
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