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May 2022​

Richard Mountz, et al., vs. Mountain Gate Property Owners Association, Inc. (Arizona Court of Appeals)

Appellant Mountain Gate Property Owners Association, Inc. ("Association") recorded an amendment to the declaration in 2020 which, in part, prohibited rentals of less than thirty days ("Amendment"). The Amendment was adopted in conformance with the procedures set forth in the Arizona Planned Community Act (A.R.S. §33-1817): (1) that it be approved by the vote or written consent of the number of owners specified in the declaration; and (2) that it be prepared, executed, and recorded by the association within thirty days after its adoption.

Approximately three months after the Amendment was recorded, four owners (Appellants) filed an action against the Association challenging the validity of the Amendment on several grounds. After a hearing on the matter, the trial judge found in favor of the Appellants and declared the Amendment to be invalid on two of the grounds: (1) that the Amendment was not signed by owners as required by the declaration; (2) that a short-term rental restriction was not foreseeable and thus, the declaration's generic amendment provision was insufficient to create requirements that changed the obligations of owners.

The Association filed an appeal of the trial judge's decision, and its opening brief was filed on January 14, 2022. The original action was filed in the Superior Court for Navajo County, Arizona. The appeal is pending in the Arizona Court of Appeals.

Amicus Brief
Court: Arizona Court of Appeals
Topic: Declaration amendments
Brief Author: Scott Carpenter, Esq., CCAL, Carpenter Hazelwood, LLC
Filed: May 4, 2022

CAI Amicus Review Panel: Mr. Robert Diamond, Esq., CCAL, Co-Chair of Amicus Committee, Mr. Stephen Marcus, Esq., CCAL, Co-Chair of Amicus Committee, Mr. Thomas Moriarty, Esq., CCAL (MA), Ms. Mary Howell, Esq., CCAL (CA)

April 2022​

Executive Office Park of Durham Association, Inc. v. Rock (North Carolina Supreme Court)

The Association's case against the Respondent-Appellee Martin E. Rock a/k/a Martin A. Rock (Rock) concerns whether the Association, an office park condominium in Durham, North Carolina, formed before October 1, 1986, may foreclose a lien for assessments by power of sale pursuant to the provisions of the North Carolina Condominium Act. The Association filed its power of sale foreclosure in 2018 to enforce a Claim of Lien of event date filed pursuant to N.C. Gen. Stat. § 47C-3-116.1 The Association prevailed at the trial court. At the trial court, the trial court (both the Durham County Clerk of Court and the Durham County Superior Court, on appeal) agreed with the Association that the Association could use the provisions of the North Carolina Condominium Act (N.C. Gen. Stat. § 47C-1-101, et. seq. (the Act)), and, specifically, N.C. Gen. Stat. § 47C-3-116 to foreclose the Claim of Lien by power of sale. The North Carolina Court of Appeals reversed and remanded the case to the trial court for dismissal with a unanimous, published opinion concluding that the Act did not apply to the Association. The Court of Appeals' opinion completely ignored the fact that portions of the Act, including N.C. Gen. Stat. § 47C-3-116, are expressly applicable to condominium associations like the Association, formed on or before October 1, 1986. The Court of Appeals' opinion did not even address, in its entirety, N.C. Gen. Stat.§ 47C-1-102, which expressly makes certain provisions of the Act applicable to condominiums created on or before October 1, 1986. The Association petitioned the Supreme Court on this issue, and the Supreme Court allowed its Petition for Discretionary Review on February 9, 2022.

The Association respectfully requests that CAI permit the North Carolina Chapter of CAI to move the Supreme Court for leave to file an Amicus Curiae brief in support of the
Association's appeal. The Association's appeal is critical to the future assessment collection matters for pre-October 1, 1986, condominium associations. Should the Court of Appeals' opinion stand, such foreclosures would all have to be pursued as judicial foreclosures, significantly increasing the costs for the same to the association(s), and ultimately to the Unit Owners. However, the implications of the Court of Appeals' published opinion do not end with condominium collections. It is not a stretch to extrapolate the Court of Appeals' opinion to conclude that no provisions of the Act are applicable to pre-October 1, 1986, condominiums, and nor are any provisions of the North Carolina Planned Community Act (N.C. Gen. Stat.§ 47F-1-101, et. seq.)2 applicable to planned communities formed before January 1, 1999. Should that be the case, operation of condominiums and planned communities, depending on when formed, will be significantly impaired in North Carolina. The CAI Amicus Review panel have approved a CAI national amicus brief in this matter, upon review, due to the applicability of the Uniform Acts to pre-existing communities being critical and will become even more important given the recent change to the applicability section of the Uniform Acts. 

Amicus Brief
Court: North Carolina Supreme Court
Topic: North Carolina Uniform Condo Act
Brief Author: Cynthia A. Jones, Esq. of Sellers Ayers Dortch Lyons, Charlotte, North Carolina Filed: April 18, 2022

CAI Amicus Review Panel: Mr. Robert Diamond, Esq., CCAL, Co-Chair of Amicus Committee, Mr. Stephen Marcus, Esq., CCAL, Co-Chair of Amicus Committee, Mr. Henry Goodman, Esq., CCAL (MA), Ms. Karyn A. Kennedy Branco, Esq., CCAL (NJ), Ms. Melissa Francis, Esq. (MI), Ms. Daniel Heaton, Esq. (CA)

C Investments 2, LLC v. Arlene Auger, et al. (North Carolina Supreme Court)

This lawsuit was filed in 2018 by C Investments 2 LLC, a real estate developer in Charlotte North Carolina. The Plaintiff sued all the lot owners in a neighborhood called Country Colony in Mecklenburg County, North Carolina. Country Colony was established in 1952, and consisted at that time of 17 residential lots. A copy of the plat map for Country Colony is attached to this Executive Summary as Exhibit A. The developers of Country Colony, Henry Newson and Miriam Newson, recorded Protective Covenants for Country Colony, and all lots were sold subject to the Protective Covenants. A copy of the Protective Covenants is attached to this Executive Summary as Exhibit B. Country Colony continues to be a single-family residential neighborhood developed in accordance with scheme of development set forth by the Newsons in the Protective Covenants. However, Plaintiff acquired several of the lots in Country Colony and seeks to subdivide them and to construct substantial multifamily projects on the lots it owns.

The main issue advanced by the Plaintiff, and the primary issue on appeal, is whether or not the North Carolina Marketable Title Act, N.C.G.S. § 478-1, et seq., has extinguished a// the Protective Covenants other than the residential use restriction . Specifically, the Plaintiff successfully argued to the trial court and the Court of Appeals that the Marketable Title Act extinguished all of the restrictions other than the residential use restriction, because none of the exceptions in the Act applied. We, representing a group of the Defendants, argued that the exception contained in N.C.G.S. § 478-3(13) protected all the scheme of development restrictions set forth in the Protective Covenants filed by the Newsons. There is one (1) issue on appeal:

1) Does the exception to the real property Marketable Title Act contained in N.C.G.S.§ 478-3(13), protect all of the restrictive covenants imposed for Country Colony under the Newsons' common scheme of development, or does it merely protect the residential use only restriction.

The Court's ruling, if upheld will adversely affect every neighborhood association in the State of North Carolina. The Court of Appeals decision would effectively allow developers to avoid the protective covenants for most planned communities in North Carolina, except for the residential use restriction. The elimination of single-family restrictions, setback restrictions, height restrictions, and the numerous other standard restrictions which form the scheme of development for most neighborhoods in North Carolina are at risk if this opinion is upheld by the Supreme Court. This will be a landmark decision affecting the practice a real estate in the State of North Carolina from Murphy to Manteo. It is extremely important that the decision be reversed, and the exception to the Marketable Title Act be interpreted to include all the restrictive covenants set forth in the scheme of development of each neighborhood. We believe strongly this was intent of the drafters of the legislation. This has been confirmed by conversations with the leading proponent of the legislation. The trial courts in North Carolina have differed on this issue, so it is ripe for determination to settle the law in the State of North Carolina.

Amicus Brief
Court: North Carolina Supreme Court
Topic: North Carolina Marketable Title Act
Brief Author: H. Weldon Jones, III, of Jordan Price in Raleigh, North Carolina
Filed: April 12, 2022

CAI Amicus Review Panel: Mr. Robert Diamond, Esq., Mr. Stephen Marcus, Esq., Ms. Hope Carmichael, Esq (NC), Mr. Clint Goodman, Esq. (AZ), Ms. Terry A. Kessler Esq. (NJ), Ms. Melissa Ward, Esq. (CA), and Mr. Scott Weiss, Esq. (TN)


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