Neighbor Against Neighbor|
Olde Belle Haven Towne Owners Association battles homeowners for ability to fine.
Thursday, January 27, 2011
Maria Farran suspects it was the Barack Obama sign that started the conflict that’s now dragged on for years and cost hundreds of thousands of dollars in a case that could have consequences for homeowners associations throughout Virginia.
Olde Belle Haven Towne Owners Association has strict rules prohibiting sings that are larger than one foot by one foot. So the Farrans took a standard Obama placard and cut it in half, installed two signs in their front yard.
"I sent the board an e-mail explaining that neither our ‘Oba’ nor our ‘ma’ sings were in violation of the stated covenants," said Farran, a government lawyer. "They didn’t get the joke."
Now, more than two years later, nobody is laughing. A month after Obama’s inauguration, the Olde Belle Haven Towne Owners Association adopted a resolution empowering the board of directors to enforce restrictions by levying fines. The Farrans say they specifically chose Olde Belle Haven because the homeowners association didn’t have the ability to levy fines, and they decided to challenge the authority of the board to create a power that wasn’t in the founding documents of the association. So they hired attorney Scott Surovell, who has since been elected to the Virginia House of Delegates replacing Del. Kris Amundson (D-44).
"Fines are a significant step that would be unprecedented in the history of the association," Surovell wrote to association president Gerald Jeanes in an April 17, 2009 letter. "The board has a fiduciary responsibility to manage the association in a manner that minimizes legal expense to the owners and overall exposure to the association, and the Farrans are alarmed by the board’s recent aggressive behavior."
The way the Farrans and Surovell read the covenants, it would require a supermajority vote of the owners to create a resolution adopting a new set of fines. But no such vote was ever taken. As a result, Surovell asked the board to repeal the resolution creating the ability to levy fines. But the board was not about to yield. Instead, it hired the services of MercerTrigiani, which defended the ability of the association to levy fines under the Virginia Property Owners’ Association Act.
"The board action is designed and intended to preserve and enhance the value of property within Olde Belhaven Towne," wrote attorney Pia Trigiani. "There is no punitive intent by the board; these actions have been taken in good faith and with the goal of attaining compliance and are consistent with practices and procedures of homeowners associations across Virginia."
THE TWO SIDES COULD not come to an agreement, so the matter ended up in Fairfax County Circuit Court. In the summer of 2009, the Farrans filed a formal complaint seeking an injunction prohibiting the association from enforcing the penalties resolution. The two sides hashed it out in court, and the judge agreed with the Farrans that the resolution granting authority to levy fines was adopted in contravention to the articles of incorporation. A separate judge later awarded the couple $41,300 in legal expenses.
"I don’t know how I ended up in this bizarre world," said Farran. "It almost feels like a divorce."
But the legal fight is not over. The association has vowed to continue the fight, requesting a rehearing in Circuit Court. According to financial disclosures made by the association to homeowners in Old Belle Haven Towne, the legal fees have now exceeded tens of thousands of dollars. Meanwhile, the association has denied a request by the Farrans to build a deck. That dispute, which was part of the original complaint that was dropped, could become the basis for a future suit, according to Surovell.
"My clients feel it was retribution," said Surovell. "It’s not consistent with the existing standard rules and practices."
Homeowners associations often become mired in power struggles and neighborhood politics. But this struggle has the potential to become a significant precedent for every association in the commonwealth. If the court agrees with the Farrans, it would establish a limit to their ability to collect fines. Yet if the Old Belhaven Towne Owners Association is able to persuade a Fairfax judge to overturn the August ruling, it could have ripple effects for similar groups across Virginia.