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CCOC Decision Summary

#24-12, Syed v. Llewellyn Fields HOA (January 3, 2013) (Panel: Fleischer, Caudle, Farrar)

The homeowner disputed the Association's refusal to allow him to rent out to the public a basement apartment that he had constructed in his home.  The County Zoning Office had approved the rental.  The Association argued that the governing documents allowed members to rent out only the entire house, not part of it, without the board's permission and the board had good reasons for refusing its permission. 

The Association's Declaration of Covenants stated that "no portion of a dwelling unit, other than an entire dwelling unit, may be leased or rented unless the prior written approval of the [Association] is obtained."

The homeowner originally constructed the basement apartment with the Association's knowledge for his relatives.  The Association did not object.  When the relatives moved away, he requested permission from the County to rent out the apartment.  A County hearing officer ruled that the rental should be permitted because it would not affect street parking or traffic and would not otherwise disrupt or be inconsistent with the residential character of the community.

The homeowner then applied to the Association for permission to rent the unit and the Association rejected the application.  The board of directors cited a number of concerns about allowing accessory apartments into the community and decided not to allow any accessory apartments.

The hearing panel disagreed with the Association.  The panel held that because this case involved restrictions on an owner's property rights the board had to show its decision had a reasonable basis.  In this case, the board's decision was not reasonable.  The Declaration quoted above meant that accessory apartments were permitted.  The board's rejection of this application was done on grounds that would have prevented all accessory apartments.  Therefore the board's decision was in conflict with its own Declaration.  While the board could adopt reasonable regulations for such apartments, it could not prohibit them completely.

The panel further held that the board had the right to reject an application for an accessory apartment even though the County had permitted it.  Under Maryland court decisions, a member of a common ownership community must obey both local laws and the rules of his community.  Approval from one does not override the duty to have approval from the other.

The panel suspended the board's decision.  The panel ordered the board to develop rules for the rental of accessory apartments which did not have the effect of prohibiting all such apartments.  Once the board adopted such rules, the homeowner must reapply for permission under those new rules.  The panel retained jurisdiction over the dispute to monitor further developments and to hear any disputes between the parties concerning the new rules.

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