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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. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  2. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  3. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

  4. The sad thing is that no fish were thrown overboard The "greenhorn" who had never fished before those 5 days was interrogated for over 4 hours by 5 officers until his statement was illicited, "I don't want to go to prison....." The truth is that these fish were measured frozen off shore and thawed on shore. The FWC (state) officer did not know fish shrink, so the only reason that these fish could be bigger was a swap. There is no difference between a 19 1/2 fish or 19 3/4 fish, short fish is short fish, the ticket was written. In addition the FWC officer testified at trial, he does not measure fish in accordance with federal law. There was a document prepared by the FWC expert that said yes, fish shrink and if these had been measured correctly they averaged over 20 inches (offshore frozen). This was a smoke and mirror prosecution.

  5. I love this, Dave! Many congrats to you! We've come a long way from studying for the bar together! :)

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