Common-interest communities

Question 1

Implied reciprocal servitudes

Answer 1

Implied reciprocal servitudes usually occur in planned communities—e.g., a condo or homeowners association.

An implied reciprocal servitude exists when:

(1) The developers intended to create a covenant on all plots in a subdivision;
(2) The promises are reciprocal—i.e., benefiting and burdening each parcel equally;
(3) The covenant is negative (restrictive);
(4) The successor is on notice of the restriction, at least by inquiry notice; and
(5) There is a common plan or scheme.

Unlike an express equitable servitude, no writing is required.

Question 2

Governance of common-interest communities: fees and rules

Answer 2

The board of a common-interest community has general powers to manage common property and administer the residents.

If it assesses fees or creates new rules, they must be reasonably related to a legitimate purpose of the association.

Question 3

Governance of common-interest communities: fiduciary duties

Answer 3

The board has duties of good faith, prudence, and ordinary care to the community.

The business judgment rule applies to board decisions.

Question 4

Governance of common-interest communities: recorded declarations

Answer 4

Restrictions contained in the recorded declaration of a common-interest ownership community are enforceable unless illegal, unconstitutional, or against public policy.

Unlike rules adopted by a condominium board, the restrictions contained in a recorded declaration are not subject to a reasonableness requirement.

Question 5

Governance of common-interest communities: default

Answer 5

A member of a common-interest ownership community, such as a condominium, is not entitled to withhold payment of assessments to set off against a default by the association in fulfilling its duties to the member.

Question 6

Governance of common-interest communities: ultra vires doctrine

Answer 6

A board is required to follow the procedural rules that it has adopted.

If it does not, a member can challenge a procedurally defective action as an ultra vires act that cannot be imposed unless and until it has been adopted at a meeting conducted in accord with the board’s own procedural rules.