#46-06, Johnson v. Hallowell Homeowners Association (July 12, 2007) (Panel: Hitchens, Fleischer, Gelfound)

The homeowner (HO) disputed the right of his homeowners association (HOA) to expand a tot lot located in the common areas behind his home on the grounds that it had not obtained a permit to do, had not notified the members of its decision, had created a nuisance, and violated its governing documents.

The evidence at the hearing showed that the HOA had rebuilt an aging tot lot and replaced obsolete playground equipment with modern equipment meeting current safety codes, and in the process it doubled the size of the lot.The old lot was not in the line of sight from the HO's house but the new lot extended past the rear borders of his lot and partially blocked his view across the common elements.After the lot was built the HOA was notified by the MarylandNationalCapitolParks and Planning Commission (MNCPPC) that it was in violation of law by expanding the size of the lot, and changing the contents of its site plan, without permission to do so from the MNCPPC.The HOA then applied to the MNCPPC for permission to alter its site plan.At the time of the panel hearing, the MNCPPC had not yet acted on this application.

The HO's evidence was to the effect that although the HOA had informed its members that it would modernize the tot lot, it never informed them that the size of the lot would be expanded; that the new equipment installed was for older children and not for small children as formerly; that the older children created more noise and acted more recklessly, creating a nuisance; that the Architectural Committee did not approve the changes and design of the new lot; that the HOA held a closed meeting concerning the lot to discuss its design.

The HOA's evidence was that the original tot lot equipment was beginning to fail, and that the new equipment, which was regulated by the federal Consumer Product Safety Commission (CPSC) required more space for its use, which in turn required a larger playground.The HOA board received several proposals from contractors and had numerous discussions on the upgrading of the tot lot, but the board did not know at the start that the lot size would have to be increased, or by how much.The board posted its minutes of these meetings on the HOA website.The board held an open meeting in August, 2005 to discuss the lot.The Architectural Committee's purpose was to review changes made by homeowners, and not changes made to the general common elements.

The hearing panel first held that the HOA had the legal authority to replace the tot lot equipment and to enlarge the lot.The HOA Declaration and bylaws specifically stated that the HOA had to maintain, repair, and replace the general common elements of the community.Although the governing documents did not specifically state that the HOA could enlarge the size of the lot, the panel noted that the HOA action did not change the size or the use of the parcel in which the lot was located, and the HOA's decision to expand the play area and modify the type of equipment in it were reasonable exercises of its general authority.

The panel also held that the HOA complied with its obligations under its governing documents to keep records, apply architectural standards, and give notice to the members of its activities.The minutes of the board did not contain all of the detail about the final approved plans for the tot lot, but neither the governing documents nor state law requires such detail, instead requiring a record of the board's acts and corporate affairs.Moreover, the HOA board discussed the topic at its public meetings several times over many months, and this gave the members adequate opportunity to learn of the details and ramifications of the plans to upgrade the tot lot.Under the governing documents, the rules for architectural changes and for approval by the Architectural Committee did not apply to the actions of the HOA itself, and the HOA was not required to comply with the architectural rules with respect to the common elements.

The panel held that the new playground did not create a public nuisance.Although the increased noise may have inconvenienced the HO, Maryland courts have defined a public nuisance as one that creates "actual physical discomfort" to ordinary people, "materially diminish[es] the value of the property" and "seriously interfere[s] with the ordinary comfort and enjoyment" of the property.

The panel further held that the HOA's failure to obtain a permit for the tot lot changes from the MNCPPC did not invalidate the HOA's decision to enlarge the lot.Whether or not the HOA violated a rule of another agency is for that agency to decide.The issue for the Commission, however, is whether the board had the legal authority to make the decision it made.Under state law, including Section 2-405.1 of the Corporations and Associations Article of the Maryland Code, the action of a director must be upheld if it is made in good faith, is reasonably in the best interests of the corporation, and made with reasonable care.This decision met the requirements of that law.

Finally, the panel held that the HOA did not hold an unlawful closed meeting on the tot lot.At its regular July, 2005 meeting the board stated that it would hold an informal meeting in August to discuss the tot lot.Some board members and some homeowners attended the August, 2005, meeting but the HO was not aware of it and did not attend.The record did not show just what notice the board gave to the members, but there was no evidence that the board prevented anyone from attending the August meeting.The panel held that the HOA should have informed all the members of the August meeting, but it also held that, based on the available facts, the meeting was not a closed meeting and therefore the HOA did not violate the open meeting requirements of the law.

The panel denied the relief requested in the complaint.