FOR IMMEDIATE RELEASE
NOWACKHOWARD HOA ATTORNEYS RECOGNIZED BY DAILY REPORT ON LAW.COM FOR THEIR WORK ON APPELLATE CASE
August 1, 2020, Atlanta, Ga. – NowackHoward, LLC is very proud of our HOA lawyers for being featured in the Daily Report on Law.com on July 30, for their work defending our client in a complicated and convoluted case. The esoteric dispute will not likely affect the day-to-day operations of how HOA’s approach collection, enforcement, or general work, but the court’s interpretation of HOA governing documents will have applicability in certain cases, making the decision valuable and important for associations to understand.
“The fundamental dispute between the parties is whether the Lake Amendment and/or the Lake Cancellation were properly adopted by the plaintiffs without the approval of the Defendant Association and whether the Lake Declaration, as originally recorded, is still in full force and effect,” Judge Thomas Cox Jr. wrote in the trial court, siding with the HOA and NowackHoward.
The Georgia Court Appeals agreed with Judge Cox and upheld his decision on appeal. The win at the appellate level was a relieving victory for the 500+ homeowners of the HOA, bolstering NowackHoward’s position and affirming our perspective that ALL HOA Boards need to review their governing documents, diligently. Here are three key insights on the case from our HOA attorneys:
- “Let the Buyer Beware.” All of the information about the lake, the Lake Lot Owners’ rights to use it and their obligation to maintain it and then split the costs amongst each other and the Association in 1/17th shares is in both the primary Association Declaration and in the specific Lake Declaration that only applies to the 17 Lake Parcels.The Court held that the owners had record notice of these rights and obligations and that nothing in either the primary Association Declaration or the Lake Declaration gives any of the other 500+ owners in the development, who do not own a Lake Lot, any indication that they could ever be held responsible for Lake expenses.
- While the old saying goes that the purest democracy lets two wolves and a sheep vote on what is for dinner, there are safeguards in place, so individuals still have rights in relation to an otherwise valid majority.In this regard, since the clear purpose of the Lake Declaration was to establish a “cost-sharing” arrangement between the 16 owners of Lake Lots and the Association as the owner of the recreation area abutting the lake, the fact that Lake Declaration appeared to allow amendments by simple majority would not be interpreted to allow an amendment that would fundamentally alter that pre-existing cost-sharing arrangement without the consent of the party who would be assuming a higher burden. The Court held that the Lake Lot Owners could not simply vote, among themselves, to have the Association assume all lake expenses.
- Although this was a unique set of facts, the ruling could assist HOAs in some situations where builder/developer owned lots are not required to pay assessments for an initial defined period of time and then the Declarant attempts to exercise its general right to unilaterally amend the Declaration to extend this time period, in an effort to continue to avoid the assessment obligation. Whether this case will be helpful in that scenario will depend on how the assessment section at issue is worded, but this case may be helpful to protect the association’s long-term, financial interests.
Though this is a nuanced case and not likely to be repeated exactly, it offers a wise caution to all HOAs about how important it is to carefully review all its governing legal documents and agreements. Furthermore, associations must make wise choices in their legal representation, when faced with a situation like this that requires not just an understanding of case law, but a sophisticated understanding of all association law in Georgia.
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About NowackHoward LLC
NowackHoward LLC is Atlanta’s most experienced and effective law firm concentrating in advising and representing homeowner and condominium associations. Lawyers at NowackHoward are among the most experienced attorneys in the United States focusing on this specific area of the law. NowackHoward lawyers have helped write almost every law in Georgia that pertains to condominium and homeowner associations and worked to get them passed, helping create more harmonious communities. With both founding partners receiving the AV Preeminent rating from Martindale-Hubbell, the legal profession’s most prestigious rating service, NowackHoward has become home to Georgia’s top-rated community association lawyers.