#52-08, Lee v. UniversityTowers Condominium, (April 8, 2009) (Panel: Fleischer, Gelfound, Kali)

The board of directors of the University Towers Condominium (UTC) voted to adopt a special assessment of $1,933,000 to pay for lining the copper water pipes in its two high-rise buildings with epoxy in order to solve its chronic problems with pinhole leaks in the pipes.Lee, a unit owner, filed a complaint claiming that under UTC's own bylaws, any "additions, alterations or improvements in excess of $25,000" had to be approved by a majority vote of the members.

The facts at the hearing were not in dispute.For several years, UTC had suffered from pinhole leaks due to corrosion in its copper water-supply pipes.The cost of replacing the pipes was estimated at $6-9 million dollars, and the board opted for the cheaper alternative of coating the interior of the existing system with epoxy.This plan also called for the installation of new cut-off valves in each unit so that plumbing repairs inside each unit could be made without shutting off water to the entire area of the building.

The panel upheld the board's actions.The panel first noted that under Article III of the UTC bylaws, the board of directors had the power to adopt "repairs, additions, replacements and improvements or alterations" of the common elements.However, Article V stated that "additions, alterations or improvements" in excess of $25,000 required the majority vote of the membership.The panel found no Maryland appellate cases on this issue, but said that the common definitions of the words clearly distinguished "repairs" from "improvements": to "repair" was to "restore to a sound or healthy state" whereas to "improve" was to add something new "that enhances value." The purpose of the repairs here was not to add a new plumbing system where none had existed but "to keep up the domestic water supply and restore it to a sound state."Although the overall contract did call for some additions in the form of new valves and access panels, "these were minor, incidental changes made either to enable [the contractor] to do its work, or as required by Code.More than ninety-nine percent of the original plumbing system remains and the overall appearance and functionality of the system is substantially the same."Because the work was not an "improvement", Article V of the bylaws did not apply and the board did not need the approval of the membership for the work or the increased assessment.The panel dismissed the complaint.