Courts-enforcement

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Single-family units

This condo dispute from Minnesota touches on several issues that are important to condo owners. They include:

•	The rights of a condo owner to rent out a spare bedroom to a unrelated roomer.
•	If the corporation allowed someone to rent out a room for over 20 years, why are they no longer allowing it.
•	Is the corporation discriminating against an owner because she is a single female?
•	Is a licence to be treated the same as a lease?
•	Is the owner running a business renting rooms on a short-term basis?
•	How a single appointment or election of one person to a board of directors can destroy the harmony in a condo community.
•	The huge legal costs (over $30,000 plus the costs of the disputed lien) that the owner has so far taken on in the dispute against her condo corporation.

MN woman sues HOA for discriminatory enforcement of covenants
Independent American Communities
By Deborah Goonan,
05 July 2016

Background
About Sherwood Court:

The 48-unit community was developed in 1988. Many single individuals live in Sherwood Court.

The current President is Thomas J. Sackett, whose primary residence is located in Collier County, Florida. He is a part-time resident of Sherwood Court.

There are three members on the board, with two who are in favor of pursing a counter claim against Ross. The current President has been on the Board since May 2014. Ross says the discriminatory accusations and alleged by-law violation notices began in Sept 2014.

The owner
Teri Ross, a marketing and social media professional, has owned and resided in her townhome at Sherwood Court, Minnetonka, MN, for more than two decades. During most of this time, Ross has chosen to have a roommate in a spare bedroom in her unit.

Ross also enjoys having family and friends as guests from time to time when space is available.

At times, Ross has used AirBnB to help her prescreen potential roommates. For more than 20 years, although she has changed roommates from time to time, Ross has been able to live in peace, without any complaints from neighbors or her HOA.

But that all changed in 2014, shortly after Thomas Sackett moved in across the street from her home, and became President of the HOA Board. Ross started receiving complaints about allowing other people to live or even stay in her home.

The dispute
Because some of her roommates have lived with her less than a full year, and because Ross has not provided the HOA with a copy of the “lease,” the HOA accuses Ross of engaging in a business, operating her home as a hotel to transients.

According to Ross, “While the HOA claims it is a violation of the Covenants, Conditions, and Restrictions (CC&Rs) to lease one’s unit for less than a full year, their argument is in conflict with the Declarations, which states seven days. While a previous Board did pass the one-year restriction as a rule in 2012, that rule is not valid. The only way such a rule could be enforced is if the Declaration itself was changed by a vote of the homeowners.”

Ross previously served on her homeowners’ association board back in 1999, the last time the CC&Rs were officially amended and restated. Thus she knows there is no prohibition against an owner-occupant having a roommate for less than one year. Homeowners who have had roommates for less than one year include two previous Board Presidents.

Licensing vs leases
The state of Minnesota – like most U.S. states – makes a legal distinction between licensing and leasing. The former entails taking on a lodger or roommate (an individual who sleeps in a spare bedroom and shares living space with the owner) as opposed to leasing one’s entire home or condo to a tenant.

Ms. Ross says she is not leasing her unit, she is licensing a room to a roommate. “That the word ‘licensing’ is not even mentioned in any of the Association’s governing documents confirms that the CC&Rs were never meant to allow the Association to control who stays inside of a unit and for how long,” says Ross.

Board issues a fine
In March 2015, without the mandated hearing before the board Ms. Ross had requested, Sherwood Court HOA fined Ross $50 plus $3,829 in attorney fees. At that point, Ross was forced to retain counsel. While they attempted to negotiate a settlement, she was ultimately forced to file a suit against her HOA. So far, Ross has amassed more than $30,000 in legal costs in addition to the disputed HOA lien.

Lawsuit
The lawsuit claims Sherwood Court has inappropriately enforced the CC&Rs by claiming a violation where none exists, that the HOA attorney fees assessed on the disputed fine are unreasonable, and that the HOA board has violated the Minnesota Human Rights Act, making discriminatory statements based on the fact that Ross is a single woman, and impairing her rights to live with the person of her choice.

Collection lien
The HOA has denied all allegations. In November 2015, Sherwood Courts’ Attorney, Frederick Krietzman, filed a collection lien on Ross’s home in the amount of $8,432.98, only $50 of which represents the disputed, unpaid fine.

The HOA asked the court to approve a foreclosure or, if HOA chooses not to foreclose, a personal judgment.

If you go to the link above, you can read the full court application and other documents.