#511-O, DePamphilis v. VictoriaSprings Homeowners Association (May 8, 2002) (Panel: McCabe, Chairman)

The homeowner (HO) complained that his homeowner association (HOA) had for several years improperly overcharged the owners of the detached houses for expenses that should have been charged only to the owners of the town houses, and he asked that the Commission order the HOA to refund the overcharges to all the owners of the detached houses.

The evidence at the hearing showed that the governing documents specified that the costs of maintaining the road serving only the townhomes in the community should be paid by the owners of the townhomes, and not by the entire community.However, the budget procedures established by the builder, and then continued by the HOA when it became independent, required the townhomes to pay for certain street maintenance costs, plus they had to pay for lawn service to their private yards and area maintenance of common areas located near them.An audit performed for the owners of the detached homes concluded that if all the HOA costs were averaged out equally per unit owner, then the owners of detached homes had been overcharged.

The panel found that the HOA had in fact improperly calculated the assessments due from each of the two classes of unit owners.It agreed that the street maintenance costs (repairs, lighting, storm drains, snow removal) had been properly assessed against the townhome owners.However, it also concluded that the HOA should not have paid for lawn care to the private townhome yards, and that there should not have been any assessments for that purpose.Finally, the panel concluded that the costs for maintenance of common areas near the townhomes should not have been assessed against the townhomes alone, but was properly, under the rules of the community, a common expense to be shared by all the unit owners in the community.

The panel refused to order any refunds to the owners of the detached homes.The panel said that neither party, in the evidence each presented to the panel, had correctly allocated costs and assessments between the detached homes and the townhomes.Therefore the panel did not have enough evidence to decide what the overcharges had been, and therefore could not order refunds.The panel ordered the HOA to change its budgeting procedures and calculations of assessments to conform to the panel's rulings, and to stop collecting assessments to pay for the maintenance of private property owned by individual homeowners.