YES – Wisconsin Condos And HOAs Have to Follow Their Association Documents

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Frequently we are asked about either inconsistent association documents or advised that although our documents say X we have always done Y so won’t our past precedent control? The answer is NO.  Your documents control.  You must follow what your documents say, unless there is something in them that is illegal or against public policy. This same point is continually stressed by the courts around the country.

Facts. The most recent example illustrating the need for associations to strictly follow their own documents occurred on March 19, 2019 when the North Carolina Court of Appeals held for a homeowner in the case of Maker v. Mimosa Bay Homeowners Association, Inc. In Maker, the homeowner constructed a fence on their property without first obtaining the consent of the Architectural Review Committee (“ARC”).  The ARC sent the Makers a notice that stated:

It has come to our attention that an Architectural Change has been made to your home. All Architectural changes must be submitted to and approved by the Architectural Committee…. Attached is a copy of the Architectural Change Form for your convenience. Please complete the form and submit it . . . for approval.

You have begun work on construction of a new fence with no ARC application or approval on file. Please stop all work until the proper forms are submitted and the request is approved.

If you cannot comply with this request within the next thirty (30) days or feel that the request is unfair, you have the right of appeal to the community’s elected Board of Directors.

The Makers then submitted to the ARC Chairman an application seeking to keep the fence, which was taller than allowed by the documents. Article III of the Declaration stated “Any Architectural Review Committee appointed by the Executive Board shall consist of at least 3 members.” Twenty days later the ARC Chairman wrote and advised the Makers that their request had been denied. A hearing was then scheduled at which the Makers appeared and presented evidence as to why they should be allowed to keep the fence. Again the request for a variance was denied. The decisions to deny the requests were all made by the ARC Chairman.

Trial Court. The association then began fining the Makers for their violation. The Makers filed suit. The trial court found in favor of the association and the Makers appealed.

Issue. Did the fact that the ARC failed to consist of three (3) members make its decision void?

Appellate Court Ruling. The Court held that because no valid decision was reached by the ARC within 45 days, as the documents required, that “the fence was deemed permissible under the terms of the Declaration.”  The Court’s reasoning was the following:

“It is abundantly clear from the record that at all times relevant to this case decision-making authority on behalf of the ARC rested with no one other than Frieze [the ARC Chairman]. Indeed, as far as the Makars’ application was concerned, Frieze was the ARC and the ARC was Frieze. Such an arrangement in which Frieze served as the sole decision maker for the ARC is not permitted under the Declaration.  (Emphasis Added).”

Lessons.

  1. Follow your documents. If you don’t like what they say – amend them;
  2. Doing something because it is easier, or because it is the way it has always been done will generally not carry the day; and
  3. Get others involved in the process and decision making because groups make better decisions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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