The Statue Standoff - Lessons for Curbing Community Conflict?

A few months ago, Glenn and Laura Wolf bought a house in a planned development in South Corvallis, Oregon. They placed five statues (ranging from 6 inches to 3 feet in height) in their front yard, including Christian figures, a Hindu deity, and an Indian chief. A neighbor complained. The association informed the Wolfs that the statues required board approval. The Wolfs responded that there is nothing in the governing documents that specifically addresses statues. Statuegate was born.

The Wolfs and the association each hired attorneys. An effort to recall three members of the association’s board is underway. The board recently offered to settle the dispute by allowing the current statues to stay as long as no more are added. The Wolfs rejected that offer, and they appear to be willing to litigate the issue. The Wolfs’ strong perception that the board is selectively enforcing the rules against them may make legal action inevitable.

Statuegate serves as a reminder that disputes over rules can escalate quickly if certain conditions are present, including ambiguous governing documents, debatable harm to the community, and owners who believe that they are being singled out for different treatment. Boards should always consider the likelihood of a legal challenge when deciding how to exercise broad authority and apply specific rules. Giving owners an adequate opportunity to be heard, discussing their concerns in a civil manner, and offering compromises when appropriate can keep small fires from turning into large ones.

Rules Enforcement - Litigation or Exception?

In 2003, the River Watch Homeowners Association in Tarpon Springs, Florida imposed a $1,000 fine on an owner because her husband insisted on walking their black Labrador Cole through the community without a leash in defiance of an Association rule after repeated warnings. The Board President admitted that Cole was a pleasant dog that never caused any problems, but said that making an exception for him would mean that the board would have to permit all owners to walk their dogs without a leash. The owner and her husband refused to pay the fine, so the Association recorded a lien against her lot and began a foreclosure action. In 2007, a judge ordered the owner and her husband to pay the fine, interest, attorney fees, and costs, which meant that they owed the Association over $40,000 at that point. The owner and her husband say that they have already paid their own attorney over $100,000. They are now appealing the judge’s decision.

The “hard-line litigation approach” adopted by the River Watch HOA may be the only appropriate course of action in some instances. Most owners are not going to be willing or able to spent large amounts of time and money fighting over a rule and will grudgingly pay the fine and begin complying with the rule once they realize that it is in their financial best interest to do so. Many of those owners will back down after they speak with several lawyers because those individuals will likely warn the owners that litigation is expensive and risky. That being said, boards should likewise make sure that they are standing on firm legal ground before they file lawsuits that could in rare instances take years to resolve and cost tens of thousands of dollars.

The Washington laws that govern condominium and homeowners associations only permit them to impose and collect “reasonable” fines and attorney fees. This is of course an “eye of the beholder” standard to some extent, and it introduces an element of risk to any legal action to collect fines. Fines may be considered invalid by courts if associations do not follow the procedures required by law (distribute a fine schedule in advance and impose fines only after giving owners notice and an opportunity to be heard) and the governing documents. Courts may also refuse to order owners to pay fines if there is evidence that owners are being singled out for harsher treatment under the rules.

The “reassessment of the rule” approach should also be considered by boards at an early stage of disputes over rules. Boards should first evaluate whether the rule at issue is consistent with the prevailing standard of conduct in the community and still serves a useful purpose. If the rule at issue should be preserved in its current form, then boards should assess whether the particular circumstances justify making a specific exception to the rule. Community association boards have the discretion to make those types of decisions. Well-defined exceptions to rules that are documented in the meeting minutes will not render those rules unenforceable. If boards are concerned that making exceptions will cause other owners to stop following the rule at issue, they can explain the basis of the relevant exception at the next owners meeting and through written notifications such as meeting minutes and newsletters.