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CCOC Decision Summary

#5541-O, Campbell v. LakeHallowell Homeowners Association (July 24, 2002) (Panel: McCabe, Chairman)
Campbell v. LakeHallowell Homeowners Association 152 Md. App. 139 (2003)

The homeowner (HO) filed a complaint with the Commission alleging that his homeowners association (HOA) violated its rules by failing to allow him access to books and records, refusing to allow him to have a moveable basketball hoop, and denying him the right to park in certain areas.The HOA's response was to sue the HO in the Circuit Court seeking a court order prohibiting the HO from parking on his front lawn and from having a moveable basketball hoop.The Circuit Court refused to delay its own case but did not order the Commission to suspend action on the case pending before the Commission.At the hearing before the Commission, both parties agreed that the Commission had jurisdiction to resolve the issues raised by the HO in his complaint.

The evidence showed that the governing documents allowed unit owners to place personal property only in their rear yards, not their front or side yards, and the architectural rules specifically included basketball hoops in this category.The HO, however, maintained a moveable hoop in his front yard.The evidence also showed that the HO had asked to see certain HOA records, but the HOA wanted to charge an upfront payment of $1000 to cover the costs associated with locating those records for the HO.This estimate was based on a per hour charge of $25 for the time involved in researching and preparing for disclosure all of the records responsive to the HO's request. Finally, the HO owned three vehicles and had two reserved parking spaces.The HO wanted to park the third vehicle in a common area parking lot.The HOA had no rules regarding parking in that lot but had ordered the HO to stop parking his third vehicle there and in a fire lane.

The panel ruled that the HOA properly banned the HO from parking in the fire lanes.However, since the HOA never properly adopted rules for the common area parking, it could not prevent the HO from using that lot.The panel further ruled that the HO violated the governing documents'  prohibition against placing personal property in his front yard, but that he could place the basketball hoop in the back yard.

On the issue of access to records, the panel noted that it involved a balancing of several interests and considerations.The panel opined that the right of inspection granted by the Maryland Homeowners Association Act is broader than the right of discovery in litigated actions, and the HO should not be deprived of that broader right so long as his is a member of the HOA.Therefore, the HO could not be denied access to these records just because they were not relevant to the case pending before the Commission.The HOA was permitted to require payment of reasonable charges for searching its records and making them available for inspection, but it could not establish a system of record keeping that effectively made it impossible or prohibitively costly for a unit owner to see the records.The panel ruled that the HOA's charges were excessive.It could not charge the HO for the cost of removing items from storage and bringing them to the HOA's business office; nor could the HO be prevented from searching the records instead of being required to have the HOA staff search them for him.The HO could be charged for costs of copying, and for staff time beyond normal business hours and for additional staff if reasonably necessary to supervise the inspection and safeguard the documents.As noted by the panel,  [T]he association's denial of inspection based upon the limits of reasonable discovery requests is inappropriate when it is dealing with a member who has the broader right to inspect the books, records, and papers of the association.]

Meanwhile, the HOA sued the HO in the Circuit Court seeking an injunction against the HO from parking his car anywhere on his lot, and against his installing a moveable basketball hoop in his front yard.That court granted the injunction and also ordered the HO to pay $12,500 in attorney's fees to the HOA.The HO then appealed the ruling to the Court of Special Appeals.The HO also sold his home and moved out of the HOA.

The Court of Special Appeals ruled that the HO could not dispute the injunction against him since he was no longer a member of the HOA.That issue was now moot.However, the issue of attorney's fees was not moot because the HOA could try to collect it whether the HO was a member of the community or not.

The Court noted that the liability for attorney's fees was imposed by a resolution of the HOA's board of directors, and the Declaration of Covenants did not contain a provision imposing attorney's fees on homeowners who violated the rules.In addition, the Covenants required that in order to amend the Covenants, at least 90 percent of the unit owners had to agree. Consequently, the resolution, which was voted on only by the Board of Directors, was not properly adopted.Furthermore, the resolution was only filed in the Homeowner Association Depository and not in the land records, and as a result, it was not enforceable.Because there was no valid rule requiring the HO to pay attorney's fees, and the Court ruled that the HO was not obligated to pay for the HOA's legal fees.

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