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COA finds homeowners association committed slander of title

June 11, 2015

The Indiana Court of Appeals ruled in favor of an Iowa couple, finding the homeowners association where the couple lived and subsequently rented out their home committed slander of title. The homeowners association recorded a lien against their home after finding the couple did not comply with the covenant’s requirements when leasing their home.

Michael and Doreen Bixeman own a home in Hunter’s Run subdivision, which requires homeowners who wish to rent their homes to provide a copy of the lease to the homeowners association at least 15 days prior to the effective date of the lease. It also requires that the prospective tenant acknowledge receipt of the homeowners association’s covenants.

The Bixemans moved to Iowa and rented their property, but they did not provide the lease to Hunter’s Run 15 days before the effective date and the lease did not contain a clause requiring the tenants’ acknowledgement of receipt of the covenants.

Hunter’s Run gave the Bixeman’s 7-days notice of a hearing on the violations, but the couple could not return for the hearing. The homeowners association imposed a $250 sanction, which the couple did not pay, leading to the association recording a $2,525 lien against their property.

They sued for release of the lien; Hunter’s Run counter-sued to enforce and foreclose the lien. The trial court ultimately ruled the couple did not have to pay the fine but declined to rule in their favor on their allegation of slander of title based on the invalidity of the lien.

In Michael R. Bixeman and Doreen Bixeman v. Hunter's Run Homeowners Association of St. John, Inc., 45A03-1411-PL-406, the Court of Appeals agreed the sanction was invalid because Hunter’s Run did not give the couple 10-days notice of the hearing as required in the covenants. But the trial court should have also ruled in favor of the Bixemans’ on their slander of title claim. Hunter’s Run was notified by the Bixemans’ attorney that the lien was invalid, yet it refused to release the lien, thus demonstrating malice, Judge Melissa May wrote. The couple was unable to market their property and had to pay their attorney to put the matter to rest.

The COA remanded for the trial court to determine whether the Bixemans were damaged by that slander of title, and if so, to what extent, as well as to award the couple attorney fees.

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