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#131-O, McCandlish v. Waters Landing Association Inc. (June 23, 1992) (Axelson, Cohen, Mechak)

The homeowner (HO) disputed the right of the master homeowner association (HOA) to charge the sub-associations such as the one he belonged to with special assessments instead of including those fees in the general assessments.

There was no hearing.  Instead the HOA made a motion to dismiss the complaint without a hearing on the grounds that, even if all the facts alleged by the HO were true, the Commission had no jurisdiction over the dispute.  The panel reviewed the facts presented by the HO

The hearing panel found that the HO did not produce any evidence to show that the HOA did not have the right to charge the sub-associations with "neighborhood assessments" for services particular to those neighborhoods; nor did the HO show that the HOA was charging his neighborhood for services it did not receive.  The HO also failed to show any violation of the rules by the HOA when it set the assessment levels.  The Declaration of the HO's sub-association specifically stated that its members could be charged not only for services provided only to their sub-association, but also for services provided to the community as a whole.  Furthermore, under the HOA disclosure statement, which was properly recorded in the Homeowner Association Depository, the sub-associations could be charged for services exclusively performed within each sub-association, including trash and snow removal, parking lot maintenance, street repair, etc.

The panel held that the HOA had the legal authority to impose special assessments on the sub-associations.  The panel further held that under the "business judgment" rule, the HOA's decision must be upheld if the HOA acted "within the scope of its authority, in good faith, and with adequate information.....in what it considered to be the best interests of the Association, and in accordance with its interpretation of the Association documents."  There was no evidence of bad faith, fraud, or incompetence.

The panel therefore granted the motion to dismiss the complaint.  The panel denied the HOA's request for attorney's fees on the grounds that there was no factual basis for them under Section 10B-13(d) of the Montgomery County Code.