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Trial court erred in abrogating homeowner’s obligation to pay fees to HOA

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The Indiana Court of Appeals reversed a trial court’s ruling that changes in a gated residential vacation and retirement community were so radical as to abrogate a homeowner’s obligation to pay yearly fees to the homeowners association.

In 1998, Clarence Ray Meador and his wife bought a lot, which included a double-wide trailer and a 40-foot boat dock, in Country Squire Lakes Community in North Vernon. In 2006, Meador purchased an adjacent lot. The annual dues are $75 per lot and the current assessment is $300 per lot. As the economy fluctuated, investors purchased lots for rental or contract properties and the community shifted from owner-occupied to tenant-occupied. The rental property owners frequently stopped making payments to the HOA. Currently, 60 to 65 percent of these owners are delinquent on their fees and assessments, leaving the HOA with a $3 million to $4 million revenue shortfall.

As a result, dues and assessments are used on essentials such as payments on a $950,000 improvement loan, repairs to a dam, insurance and limited road maintenance, leaving insufficient funds to maintain the recreational amenities. Meador paid his dues and assessments and tried to influence the HOA board of directors in their budgetary decisions but he was ignored, and he has been unsuccessful at getting a financial audit of the HOA.

The trial court abrogated Meador’s obligation to pay dues and assessments, concluding the changes in the community had been so radical that the original purpose of the community and the deed restrictions had been defeated long ago. It also ruled that Meador could still vote at the HOA meetings because his obligation to pay had been abrogated.

In its appeal, the HOA argued the trial court’s decision “conflicts with long-established Indiana contract law.”

The COA agreed with the HOA, finding the lack of recreational facilities is not radical enough to justify the abrogation of a private contractual property covenant and that the HOA bylaws clearly state the financial obligations of homeowners.

Although the COA appreciated the trial court’s attempt to provide relief, the majority stated, “the relief provided is not one afforded under Indiana law, and thus we cannot affirm the judgment. The abrogation of Meador’s obligation to pay dues and assessments is not a remedy for these problems, but there are potential alternatives that Meador and the HOA can investigate.”

 

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  1. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  2. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  3. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  4. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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