Case No. 745-O, East v. Bel Pre Square Homeowners Association (December 8, 2005)
The Homeowner (HO) filed a complaint against the Homeowners Association (HOA) claiming that the HOA had no right to charge assessments against the HO because it had never filed its Declarations and Covenants in the County's homeowner association Depository as required by law. The HO also claimed that the HOA improperly installed water sub-meters and failed to allow access to its books and records; and that the HOA should not charge assessments to maintain a section of the property still owned by the County's Housing Opportunity Commission (HOC) and that the HOA manager should be fired. After a full public hearing, the Commission found as follows:
1. The failure of the Housing Opportunities Commission, the original owner of all the units, to file certain HOA documents in the Depository did not affect the HOA's right to charge and collect assessments because the legal documents containing that right had been properly filed in the land records, and the law provided that such documents did not have to be filed in the Depository. Moreover, the HOC did file all the documents in the Depository after the complaint was filed. Therefore the assessments, and the right of the HOA to sub-meter the water service, were valid.
2. Although the Housing Opportunities Commission remains the owner of record of a parcel of land in the HOA, the HOA's declarations provides that the HOC will transfer titleto that parcel once the HOC sold 34 of the units in that parcel, and the evidence showed that the HOC had already sold 45 units. Therefore, "equitable title" passed from the HOC to the HOA, leaving the HOC with only "bare legal title". As the equitable owner of the parcel, the HOA had the duty to maintain it and could properly pass on the costs to the unit owners as part of the assessments.
3. The HOA board of directors was properly elected and that board followed proper procedures to select the manager. Under Section 10B-8(4) of the Montgomery County Code, selection of a manager is a business decision of the board over which the Commission has no jurisdiction.
4. The HO's complaint was frivolous and not maintained in good faith. The HO had no credible evidence to support her claims challenging theassessments or the legality of the HOA or its board's decisions. Therefore, under Section 10B-13(d) of the Montgomery County Code, the Commission concluded that the HO should pay the HOA's attorney's fees in the amount of $2729.50.
The Commission dismissed the HO's complaint and ordered the HO to pay $2729.50 to the HOA as its attorney's fees in this dispute.
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