N.C. S.Ct.: In re Johnson- Homeowner Association Assessments must be Uniform and Pro Rata

Summary:

The Starboard Association administers a condominium consisting of 33 separate buildings. Its by-laws authorized assessments against members to pay costs, providing that “ [a]ll assessments levied against the Unit Owners and their Condominium Units shall be uniform” and “shall bear the same ratio to the total assessment made against all Unit Owners and their Condominium Units as the undivided interest in Common Property appurtenant to each Condominium.”

In October 2005, the Association approved renovations to all of the building, except Building 33, assessing the costs against all owners, except owners of Building 33. Subsequently, in November 2007, the Association renovated Building 33, assessing those costs only to the owners of Building 33. The difference between the 2005 assessment and the 2007 assessment for Building 33 was $134.46. Following a partial payment by one of the Building 33 owners, the Association commenced foreclosure.

The majority, however, held that pursuant to N.C.G.S. § 47A-9 and its own by-laws, the Association was required to assess uniform contributions “pro rata towards the administration, maintenance, and repair of common areas and facilities.” Accordingly, the assessment was invalid.

Justice Martin dissented arguing that “the provisions of section 47A-12 are designed to protect unit owners from shouldering a disproportionate share of the maintenance expenses for common areas when other unit owners . . . attempt to unilaterally exempt themselves from contributing their pro rata share of maintenance expenses.”

Commentary:

While the difference in the amount of the assessment may have only been $134.46, the owners of Building 33 did have to wait two years for their renovations, with that delay likely giving rise to their hostility to paying for the later assessment.

For a copy of the opinion, please see:

Johnson- Homeowner Association Assessments must be Uniform and Pro Rata.pdf

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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