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CCOC Decision Summary


#87-10, Highland Manor HOA v. McClure (October 20, 2011) (Panel: Fleischer, Caudle, Fonoroff)

The HOA brought this complaint to compel a homeowner to stop operating a mass mail business out of her home.  This business consisted of the printing of mailing labels, folding and stuffing envelope inserts, sealing the envelopes, and delivering them to the post office.

The homeowner argued that she had permission from the developer of the HOA, and its original president, to operate the business; that her business was a "profession" permitted by the governing documents, and that it was a "no-impact, home-based business" protected by the HOA Act.

The HOA's evidence showed that in 2010 the homeowner had a contract to mail out census forms, that tractor-trailers pulled up to the house to deliver and to pick up the forms, and that there were employees at the house.  The HOA also subpoenaed the developer, who testified that he did not recall giving any permission to anyone to operate a business out of a house in that HOA.  The HOA's rules allowed for a "professional office" to be operated out of a house on certain conditions, among which were that there be no employees coming to the house to work and the offices must be for "a recognized profession" such as doctors, lawyers, architects, dentists, "and the like."

The homeowner produced as evidence a note from the builder of her home stating that he had obtained permission from the developer for her to operate a business out of the house and he agreed to enlarge the garage of the house to accommodate the mass mail equipment.

There was a conflict in the evidence over whether the developer had approved the mass mailing business and the hearing panel weighed the evidence in favor of the HOA.  The homeowner's paper from the builder about what the developer had approved was hearsay, and the developer himself stated under oath at the hearing that he did not recall ever giving such permission.

The panel held that a mass mail business was not a "profession" within the meaning of the governing documents, as it was conducted in a garage, not an office; it was not an occupation regulated by the State; it was not an occupation calling for special learning and was not primarily mental or intellectual in nature.

The panel also held that a mass mail business was not a "no-impact home-based business" protected to a limited extent by Section 11B-111.1 of the Homeowners Association Act.  The very nature of the business made it likely that trucks, workers, excessive trash, and additional cars would all be brought into the neighborhood.

Finally, the HOA requested, and the panel granted, attorney's fees.  Under Section 10B-13(d), a panel can award attorneys fees to a prevailing party if the fees are reasonable and if the association's own governing documents require the payment of such fees.  In this case, the HOA's Declaration of Covenants specified that any member who violates any covenant agrees to reimburse the HOA for its "court costs and reasonable attorneys' fees" to enforce the covenants.  The panel found that $2000 was a reasonable fee.

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