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Homeowner Associations Endangered By Louisiana Supreme Court Decision, CAI Warns

8/11/1998  -  Alexandria, VA

A recent Louisiana Supreme Court decision restricting the ability of community associations to tighten building restrictions or raise assessments could spell disaster for every homeowner association in the state. According to the Community Associations Institute, community associations in Louisiana could face declining property values and operational paralysis as a result of the ruling requiring 100 percent of owners to approve certain rule changes. CAI will host a town hall meeting in Metarie, Aug. 20, to discuss relief.

In a split decision, the state Supreme Court ruled that "a majority of lot owners in a subdivision may not amend existing, valid building restrictions to make them more burdensome or restrictive," including assessment hikes. Louisiana Supreme Court Justice J. Knoll opposed the majority opinion, noting, "By allowing a single dissenter to prevent any amendment of the restrictions determined to be 'more onerous,' the majority has effectively eliminated the ability of neighborhood associations to adapt to changing conditions, and it has virtually guaranteed a slow financial death for these organizations."

Possible consequences of the decision include:

  • Constant special assessments for association members whose boards can no longer plan for future expenses;
  • Lawsuits that could be avoided if the association had the power to update documents; and
  • Lone holdouts blackmailing associations for their vote on critical issues.

CAI is also concerned that a ripple effect throughout the state's community association economy could affect businesses that provide management, realty, mortgage lending, legal, accounting, insurance, engineering, landscaping, and repair and maintenance services.

CAI is hosting a town hall meeting Thursday, Aug. 20, at the Jefferson Parish Library, 4747 West Napoleon Ave., Metarie, at 6:30 p.m. to advise homeowners, public officials and community association service providers on the impact of the decision and how it can be addressed. For more information, please call local CAI coordinator Pam L'Hoste at 504/569-9344 or contact Becky Vensel, CAI's national legislative manager at 703/548-8600, ext. 269; e-mail, bvensel@caionline.org.

The Community Associations Institute is a nonprofit association created in 1973 to educate and represent the nation's 205,000 community associations—condominium associations, homeowner associations and cooperatives. CAI members include homeowners, associations and related professionals and service providers.


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Phone: 703-970-9220
Fax: 703-970-9558
Email:

MEDIA CONTACT: Amy Repke
Phone: 703-970-9239
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