Recent Cases in Community Association Law
Law Reporter provides a brief review of key court decisions throughout the U.S. each month. These reviews give the reader an idea of the types of legal issues community associations face and how the courts rule on them. Case reviews are illustrations only and should not be applied to other situations. For further information, full court rulings can usually be found online by copying the case citation into your web browser. In addition, CAI’s College of Community Association Lawyers prepares a case law update annually. Case law summaries, along with their references, case numbers, dates, and other data, are available online.
California All-Risk Insurance Policies and Potential Exposure Clarified
Insurance: This case provides an important clarification of how all-risk or open peril condominium insurance policies are interpreted in California. The court's analysis is highly relevant to risk management for associations undertaking large-scale repairs and may affect how associations and insurers negotiate coverage terms. Additionally, the case implicates potential exposure for insurers under bad faith and punitive damages theories.
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The Woodbridge Condominium Homeowners’ Association in Los Angeles underwent a roof replacement in 2021. During this re-roofing, in which approximately 80% of the original membrane was removed, two rainstorms penetrated the partially exposed roof, causing extensive interior water damage. The association filed a claim under its allrisk condominium insurance policy issued by Farmers. The insurance company denied the claim, citing policy exclusions for water damage and faulty workmanship. The association sued for breach of contract and bad faith.
The trial court granted summary judgment in favor of Farmers. The Second District Court of Appeal reversed summary judgment, finding triable issues of fact regarding both exclusions.
It held that the policy meant coverage exists unless expressly excluded. It emphasized the policy’s exclusion applied only to "faulty" workmanship, and rain or wind might have contributed to the damage.
It’s unclear whether the roof was first damaged by a covered cause. If so, the resulting water damage could qualify for coverage under the exception. The court concluded Farmers failed to prove the damage was solely caused by workmanship defects. It’s plausible that rain entry, not negligent work, was a contributing cause. Under the resulting loss exception, such damage might still be covered.
This decision confirms that coverage under all-risk property policies during maintenance and repair projects can remain intact even during periods of partial disassembly. It rejects a narrow definition of "roof" advanced by insurers that would have gutted coverage during routine re-roofing and distinguishes between negligent and nonnegligent workmanship in the context of exclusions.
The ruling cautions insurers against blanket denials based on exclusions that do not clearly apply and highlights the importance of evaluating mixed causation. Associations contemplating major repairs should review policy language carefully and be prepared to challenge denials that rely on overbroad readings of exclusions. The case also demonstrates that insurers’ conduct during claim denial may expose them to bad faith liability even when plausible legal defenses exist.
The case also reinforces that California interprets allrisks policies expansively, placing the burden on insurers to prove a covered loss fits squarely within exclusions. It also clarifies that roof-under-repair still counts as a roof for purposes of water damage exceptions and affirms that resulting-loss exceptions in workmanship exclusions preserve coverage unless insurers can prove procedural negligence.
This ruling significantly benefits policyholders by emphasizing that neither exclusion automatically applies when multiple causes intertwine. Insurers must show clear proof they are dealing purely with an excluded peril — not a covered one masked by policy language. The ultimate outcome now depends on the California Supreme Court’s forthcoming review.
Note: Petition for Review to the Supreme Court of California pending as of 5/19/25 (Case No. S290750).
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Short-Term Rentals Constitute Residential Use Under Restrictive Covenants
Short-Term Rentals: This case highlights whether using a property for short-term rentals violates a subdivision’s restrictive covenant limiting property use to "residential purposes only." This is an important case as it deviates from previous decisions regarding short-term rentals and commercial use.
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Buckeye Adventures renovated a cabin on in the Lost River subdivision in Hardy County, W.Va., and then posted the listing on short-term rental platforms. Two property owners in the community filed a complaint alleging the short-term rental violated the subdivision's declaration. Plaintiffs referenced a covenant that states lots "shall be used for residential purposes only," and further alleged the rentals caused nuisances including noise and increased traffic.
The West Virginia Intermediate Court of Appeals distinguished how short-term rentals are to be treated under state law. It found short-term rentals do not violate residential purpose covenants because guests are engaged in residential activities such as sleeping, cooking, and recreation that align with the intended uses for residential properties.
The court held that short-term rentals constitute residential use under the subdivision's restrictive covenants. The court found no explicit prohibition of rentals in the declaration and noted the developer's intent was to prevent industrial or commercial enterprises from disrupting the community's tranquility. Additionally, the court determined the plaintiffs failed to provide sufficient evidence establishing substantial and unreasonable interference with the use and enjoyment of their properties, and dismissed the private nuisance claim.
The court’s departure from majority viewpoints regarding drafting and interpreting restrictive covenants highlights the necessity for precise language in governing documents and the distinctions in viewpoints across jurisdictions.
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Importance of Clearly Drafting Governing Documents and Amendments Emphasized
Covenant Enforcement: This case highlights the importance of carefully drafting amendments and whether an amended governing document supplements or supersedes the original. Centennial Plaza in Piscataway, N.J., claimed Trane was required to give them the right of first refusal before selling Trane’s units. Trane claimed Centennial Plaza had no such right because the amended declaration does not contain such a right. Centennial Plaza argued the amended declaration merely supplements the original and does not entirely set aside the original terms. Plaintiffs argued the original deed granted a contractual right of first refusal. Trane countered that subsequent deed amendments removed this clause. The court found that while the initial deed included such a right, deed amendments effectively eliminated it. Centennial Plaza did not have a right of first refusal because the amended declaration did not contain such a right. While the original declaration did contain a right of first refusal if an owner did not obtain board approval to sell, that right was removed in subsequent amendments. A party cannot successfully claim a breach of contract by citing failure to comply with an obligation if that obligation is not part of the contract. Stating that a provision in the original declaration is “hereby amended and restated in its entirety” is sufficient to entirely supersede that provision contained in the original document. Centennial Plaza's efforts to stop Trane’s sale failed due to the withdrawal of the right of first refusal via deed amendments and plaintiffs’ misuse of lis pendens (pending legal action to stall the sale). The court’s decision underscores the importance of precise deed drafting and honest procedural strategies in property disputes.
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Associations Not Required to Demonstrate Irreparable Harm to Obtain Injunctive Relief
Covenant enforcement: The case reaffirms that associations are not required to demonstrate irreparable harm to obtain injunctive relief to enforce restrictive covenants.
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The owners, Fowler, et al., were subject to recorded covenants prohibiting mobile homes in Long Lake Estates in Washington County, Fla.. In 2020, a board officer attempted to garner support to amend the declaration to permit mobile homes, then placed one on his lot. After opposition from other owners, the amendment was withdrawn, but the mobile home remained. The new board sued for injunctive relief.
Although the trial court found a violation of the covenant, it denied the injunction ruling that appellants had not demonstrated irreparable harm. The appellate court reversed, holding that Florida law does not require proof of irreparable harm or lack of adequate legal remedy to enjoin a violation of a restrictive covenant. Once a clear violation is shown, the burden shifts to the violator to assert affirmative defenses.
This decision reaffirms a key principle that associations do not need to prove irreparable harm to enforce recorded covenants through injunctive relief, especially in cases involving architectural or use restrictions. The ruling confirms that equitable enforcement remains available without a showing of harm, effectively shifting the tactical burden to the violating owner.
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Developer Rights, Assessment Responsibilities, and Statute of Limitations Illuminated
Developer Control: The case clarifies statute of limitations on unpaid assessments and developer-owed assessments for garage spaces and boat slips it controlled. It also addressed whether the developer retained development rights under the declaration. The Missouri Court of Appeals upheld developers’ right to finish development, found no obligation to collect prejudged assessments older than five years prior to suit, and confirmed that the association’s other complaints lacked legal basis under the applicable statutes and the declaration.
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Lands’ End Properties (“developer”) recorded the declaration for a development project in 2003 in Osage Beach, Mo. In 2013, the developer sold the last unit but retained ownership of two units. Grand Meridian Condominium Owners’ Association Inc., (“association”) claimed the developer was unable to retain its rights to develop the property indefinitely, and the developer owed assessments on the developer-owned units. The association also contended that a 10-year, rather than a five-year statute of limitations applied.
The court held the trial court correctly applied a five-year statute of limitations for the unpaid assessments rather than a 10-year statute of limitations. Further, it found no maximum time limit was required to preserve developer rights; only state law requires a declaration contain a time limit in which the developer’s rights shall be exercised. The court held that assessments were owed to the association for the two units owned by the developer because an exemption would violate state law. Because the five-year statute of limitations applied, the developer only owed five years of assessments.
The decision provides guideposts for future disputes over declarant rights, expense liabilities, and association claims. It may reduce incentives to argue unconscionability in situations involving developer-friendly provisions. Maximum time limits on developer rights are not required in the declaration, and the declaration is not a written promise to pay money under a 10-year statute of limitations. Also, the distinction between the way common elements and limited common elements are treated under state law should be noted.
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Ancillary Uses Are Permitted in Residential Properties When They Comply with State Statutes
Covenant Enforcement: An association adopts new rules with clarifying language that is consistent with the declaration and state statutory provisions, making it enforceable.
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Douglas Lynch owned two nonadjoining lots within the Cold Creek Canyon Homeowners Association in Clark County, Nev. One lot contained a home where he and Jacquelin Leventhal resided, while the other lot contained no permanent dwelling. Marsha Lynch also owned two lots within the community but neither contained a permanent dwelling. On the lots without dwellings, the appellants constructed stables/horse corals and operated a nonprofit horse sanctuary housing approximately 20 animals.
The association's declaration read those properties "shall be used for residential purposes only" and not for commercial uses. In 2019, the association obtained a legal opinion stating the horse sanctuary is a nonprofit and did not constitute commercial use. The opinion noted that while the declaration did not specifically define "residential purposes," there was statutory authority for residential use of stables or pens for animals within a residential community.
In 2021, the association adopted a new rule clarifying the residential use provision of the declaration with respect to storing and maintaining livestock. The rule reasserted that a property owner may store and maintain livestock as ancillary use if they constructed an appropriate single-family dwelling on that same lot. Owners of two adjacent lots with permanent dwellings on one of those lots could house and maintain livestock on either lot.
Following the adoption of the 2021 rule, the association issued notices to the plaintiffs concerning their violation of the new rule. They also sent the plaintiffs notices of other violations, including problems resulting from manure buildup.
The Nevada Court of Appeals affirmed the district court's ruling for the association, finding the 2021 rule was properly adopted and within the association’s authority. The court said it was consistent with the declaration’s residential purpose requirement, did not require capital improvements not mandated by governing documents, was uniformly enforced, and was not adopted for retaliatory purposes.
The court distinguished between amending the declaration, which required 75% approval, and establishing rules and regulations, which the association was authorized to do under the declaration and by Nevada statute. The court interpreted the Nevada statute to encompass personal use by unit owners, not the operation of a nonprofit entity.
The court noted the 2019 legal opinion distinguished whether the horse sanctuary constituted commercial use, not whether it satisfied the residential purposes requirement. The court reaffirmed the rule by clarifying that the residential purpose requirement must first be satisfied before a unit owner uses the lot for housing livestock as ancillary use.
This case establishes that ancillary uses such as housing animals are permitted in residential communities as long as they are secondary to the primary residential purpose and comply with state statutes. The decision also confirmed the distinction between owner approval requirements when adopting clarifying rules and regulations as allowed by statutory and declaration language. The decision confirms that obtaining a legal opinion before adopting specific rules puts the association in a better position than when a board operates without such guidance.
©2025 Community Associations Institute. All rights reserved. Reproduction and redistribution in any form is strictly prohibited.
Register Today for the 2026 Community Association Law Seminar!
The College of Community Association Lawyers (CCAL) is excited to host the 2026 Community Association Law Seminar, Jan. 13 – 16, in San Diego, Calif. The program is designed specifically for common interest attorneys and Community Insurance and Risk Management Specialists (CIRMS) who need a solid understanding of the laws and regulations impacting the community association housing model. Plan to join nearly 1,000 attendees to discuss emerging trends and legislative issues.
Property Law, Historical Boundaries, and Effects of New Transactions Reviewed
Contracts and Easements: This case serves as a reference for understanding property law, especially in disputes involving historical boundaries, and the effect of new transactions on previously decided claims for quiet title.
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For nearly 50 years, a drive-in movie theater operated on a piece of property in Provo, Utah, and incorrectly used a fence (subsequently, a tree-lined fence) as one of its boundary lines. A developer acquired the theater’s property, undertook a survey, and did not believe the tree-lined fence represented the property’s boundary. The developer created the Pioneer Home Owners Association. Thereafter, the association began acquiring portions of the property from the developer, and TaxHawk purchased property on the other side of the fence under the belief that the property line described in the deeds was the appropriate boundary. A dispute arose when TaxHawk attempted to remove the fences and trees and assert the boundary line described in the deeds.
Two lawsuits were filed, first by the association asserting boundary by acquiescence, which the trial court rejected because the association and the drive-in theater never had title to the disputed strip of land. The association then obtained a quitclaim deed for the disputed strip of land from the drive-in and filed a new suit asserting ownership of the strip because the drive-in obtained ownership through boundary by acquiescence and then conveyed title to the association. The new suit was consolidated with TaxHawk’s counterclaims for quiet title and trespass asserted in the first suit.
The court held the association failed to carry its burden in opposing TaxHawk’s motion for summary judgment in the first suit. Its defense of TaxHawk’s quiet title claim was not barred by res judicata as the quitclaim deed it acquired constituted a new transaction. The court remanded the case to the trial court for a decision on the association’s defense based on boundary by acquiescence and quitclaim deed.
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Oral Agreements are Enforceable; Clear Communications are Essential
Association Operations: This case provides valuable insight into contract enforcement, promissory estoppel, and easement modifications within the context of association governance and homeowner interactions. Specifically, it discusses whether a homeowners association can enforce the relocation and installation of water infrastructure on a member's property based on prior consent and whether such actions are permissible under the association's covenants, conditions, and restrictions.
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The Roxy Ann Heights Homeowners Association in Medford, Ore., planned to upgrade its aging water system. The upgrade involved replacing an existing 8,000-gallon underground steel water tank with two new 10,000-gallon above-ground plastic tanks. These were to be installed on an easement on the property of Henry Dewey Wilson III, a former association president.
In October 2020, during association meetings, the water system upgrade was approved, and the association agreed to allow existing chain-link fences, including the defendant’s, which previously violated the CC&Rs. The defendant participated in these meetings and voted in favor of the upgrades. By January 2021, the association commenced installation, incurring significant expenses. However, in February 2021, the defendant objected to the installation, citing concerns about the size and aesthetics of the new tanks.
The Oregon Court of Appeals affirmed the trial court's decision, finding that a valid contract existed. The court held the defendant's initial approval and subsequent inaction despite knowledge of the project's progression constituted acceptance and waived any objections. Furthermore, the court determined the substantial reliance by the association, including significant financial investment and construction efforts, justified enforcement under promissory estoppel. The court also concluded the express easement's relocation was permissible under the CC&Rs, as the defendant's conduct implied consent to the change.
This case emphasizes the enforceability of oral agreements and the legal weight given to the party's conduct. It illustrates that courts may uphold agreements based on mutual promises and subsequent actions, especially when one party has relied on the agreement to their detriment. Additionally, easement locations may be effectively modified through mutual consent and acquiescence without requiring formal amendments to governing documents. This serves as a reminder for property owners to ensure that any agreements or objections are clearly documented and communicated to avoid unintended legal obligations.
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Governing Documents May Affect Adverse Possession, Quiet Title Claims
Covenant enforcement: The case represents a good example of the impact a declaration or act can have on an adverse possession claim.
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Lynn Tractman owned a nine-acre property in St. Davids, Pa. In 1984, James Conner purchased the adjoining property that included an existing driveway and built a house. Both lots are part of the Ravenscliff-Roundhill homeowners association (association). In dispute is a 26-by-240-foot strip of land on Tractman’s property in which a portion of Conner’s driveway overlaps.
After purchasing the property, Conner used a portion of the disputed strip to store materials during the construction of his home. In 1984, he constructed a boulder embankment wall beside the driveway and hired a landscaper to plant grass seed, remove debris, install a sprinkler system, plant trees, and maintain the property. These upgrades all involved the disputed strip.
In 2002, Conner replaced the embankment with a retaining wall and added landscaping beds and grass alongside it. He has continuously maintained the beds and grass since then. In 2004, Conner built a garage on his property and again used the disputed strip for storage during construction, which created visible changes to the landscape.
In October 2007, Tractman sent a letter to Conner noting that, after reviewing a land survey, she noticed his retaining wall and landscaping encroached on her property. In March 2009, Conner filed suit for quiet title, ejectment, and a declaratory action for adverse possession. The parties then underwent years of extensive litigation.
The court affirmed the trial court’s amended order on appeal, denying Tractman’s request for a ruling on her claim that the declaration and act barred Conner’s adverse possession claim that he was the owner of the remaining disputed parcels.
Neither party disputes that the lots are in a planned community created by the declaration and governed by the act. Tractman referenced Section 5219 of the act that provides for amendment of a declaration, including the plats and plans, by certain vote or agreement of owners. She also pointed to Section 24 of the declaration which provides that it and the plan may be amended only by affirmative vote of at least 67% and no amendment may “make any material change in the plan in respect of home lots.” The court agreed with the trial court’s determination that neither the act nor declaration specifically prohibits an adverse possession claim and rejected Tractman’s argument.
While the association was not a party to the suit, the declaration and applicable law were relevant. It is important that community association attorneys recognize how the provisions of the declaration and act may affect an adverse possession or quiet title claim. In this case, the declaration and act did not specifically prohibit the adverse possession claim, and the case was decided on other grounds relating to satisfying specific elements of an adverse possession claim.
NOTE: Following this decision, the CAI Pennsylvania Legislative Action Committee is supporting and preparing legislation that amends existing statutes to prevent an owner from claiming title to common property through adverse possession. As of May 2025, the LAC was participating in discussions with legislators to sponsor a bill that also makes other statutory amendments.
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Negligence Claims Must Be Separate from Conduct in Breach of Contract Cases
Civil Procedure: This case demonstrates the importance of properly pleading claims. The ruling reinforces that a negligence claim, even if based on contractual duties, must be separate, distinct, and independent from a breach-of-contract claim to support punitive damages. The decision emphasized that courts cannot authorize punitive damages at the pleading stage unless the proposed amended complaint first establishes a tort basis distinct from contractual breaches. Condominium owners cannot circumvent contract-based duties to extract punitive damages unless they frame and plead an independent tort (e.g., fraud, intentional infliction). The decision also serves as an important precedent for pleading clarity in Florida cases seeking punitive damages.
Yaffa Raviv owns a unit governed by the Whitehall at Bal Harbor Condominium Association in Florida. In July 2015, Raviv began complaining of water intrusion in her unit and a rodent infestation in the attic space above her unit. She continued to complain for the next two years, and the association and its manager took no action to resolve the issues. Individual board members were dismissive of her complaints, and some even told her there was nothing wrong and the problems “were all in her head.”
Raviv filed suit in 2018 alleging negligence, breach of contract, and sought injunctive relief. She claimed that because of the water intrusion, she suffered health issues and was forced to periodically move out of her unit and sleep in her car. In May 2023, Raviv moved to amend to include punitive damages, attaching a proposed second amended complaint. In March 2024, the trial court excluded punitive damages for breach-of-contract claims.
The court reversed the order allowing punitive damages and held that Raviv’s negligence count was virtually identical to her breach-of-contract claim. Under Florida law, punishing a defendant via punitive damages requires a distinct tort — not merely contractual negligence. Here, Raviv failed to assert an independent tort. Since the pleading component of the punitive-damages rule failed, the court did not reach the evidentiary issue.
Both of Raviv’s claims are centered on the damages resulting from the associations’ lack of performance of its duties as outlined in the declaration. The complaint alleged no conduct by the association that differed from the breach of contract claim. Therefore, the negligence claim was not separate, distinct, and independent from the conduct asserted in the breach of contract claim and thus failed the pleading component of the punitive damages claim. The March 2024 order was reversed such that the punitive damages claim is not allowed to be added.
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