Skip to main content

Decisions and Orders Main Page

CCOC Decision Summary

#69-10, Bodmer v. Potomac Meadows HOA    (July 31, 2013) (Panel: Alkon, Farrar, Kabakoff)

The homeowners complained that the HOA had failed to respond to their complaints about conditions in their neighbor’s lot and to enforce the rules of the community.  The HOA responded that under the “business judgment rule,” it was not required to enforce the rules against the neighbor.

The facts produced at the hearing showed that beginning in 2003, the homeowners had complained to the HOA that the neighbor had planted a tree on the joint property line that was tilted over the line and overgrowing the homeowners’ lot.  They followed up this complaint with others concerning signs the neighbor posted in his lot, the storage of junk on the lot, the planting of a vegetable garden on the front the lot, and other conditions, all of which appeared to violate the HOA’s own rules.

The HOA’s responses to these complaints was erratic and inconsistent.  The HOA sent violation notices to the neighbor and did not follow up on them.  At one point the HOA threatened to remove the tree if the neighbor did not do so, then the HOA notified the homeowners that the tree was a private dispute which did not involve the HOA, and later the HOA notified the homeowners that the tree was on their property and they should remove it.  The homeowners requested a hearing with the board of directors on their complaints and the HOA ignored the request.

Significantly, the HOA could not produce evidence to show that its board of directors ever formally considered the homeowners’ complaints and held a vote to decide how to respond to the complaints.

The hearing panel upheld the homeowners.  The panel said that the “business judgment rule” did not protect the HOA because there was no evidence to show that the HOA ever exercised its judgment.  There were no minutes of board meetings in which the board discussed the complaints and nothing to show that the board made any decisions on the complaints.  To the contrary, the HOA’s actions were dilatory, inconsistent, and incomplete.  The HOA also failed to follow its own rules, which required it to hold a hearing on such complaints and to allow the complaining party to present evidence.  The panel wrote that, “[i]t is crucial to the business judgment rule that the association has made a decision.” 

The panel held that the HOA failed to exercise its judgment and that its actions were arbitrary.

The HOA argued that the statute of limitations barred the complaint.  The panel disagreed, holding that statutes of limitations do not apply to the CCOC (citing CCOC #589), and that in any event, the HOA waived the defense by not presenting it in its answer or at the hearing.

In deciding what order to issue, the panel noted that it had to consider that the neighbor was not a party to the CCOC action.  Therefore the panel ruled that it had no authority over the neighbor or his lot, and therefore the panel could not make any rulings or issue any orders against the neighbor and his lot, citing CCOC ##88-10/24-11.  Instead, the panel ordered the HOA to investigate the homeowners’ complaints about the lot, to make a report about its investigation, to send a violation notice to the neighbor if its investigation showed the existence of violations on the lot, and to hold a hearing on the violations if requested, at which the homeowners could present evidence.  At the hearing the board of directors must vote on what action to take to enforce the rules.  The panel did not require the board to take any specific enforcement action, but ordered that if the board voted to take no action, it must state its reasons in the minutes of the meeting.  The panel ordered the HOA to reimburse the homeowners for their $50 filing fee for the complaint.

Go Top