667 A.2d 947 | Md. Ct. Spec. App. | 1995
On November 17, 1993, Stanley Alpert and his wife, Carol (the Alperts), filed suit against Le’Lisa Condominium and Edward M. Swiggard, John C. Tunell, and Alfred B. Inners, members of Le’Lisa’s Board of Directors (Le’Lisa), in the Circuit Court for Worcester County. The suit alleged, inter alia, that Le’Lisa Condominium’s board had no authority to assign individual parking spaces for the exclusive use of individual unit owners. Appellants asked for declaratory and injunctive relief.
A hearing on the merits was held on June 28,1994 (Eschenburg, J., presiding). Judge Eschenburg reserved judgment, allowing the plaintiffs and the defendants to submit memoranda of law. On August 24, 1994, Judge Eschenburg ordered that the plaintiffs’ case be dismissed with prejudice. The Alperts filed this timely appeal and present three questions, which have been rephrased for clarity:
I. Did the hearing judge fail to answer a question raised by appellants in their suit for declaratory judgment?
II. Is the assignment of parking spaces a regulation of the use of a common element or a taking of a portion of each unit owners’ percentage interest in the common elements?
III. Did the condominium association have a duty to disclose to appellants, prior to their purchase of a condominium unit, certain informally adopted rules and regulations concerning parking?
On February 8,1993, the Alperts bought unit number 205 in the Le’Lisa Condominium, located at 10 East 143rd Street, Ocean City. One of the features that persuaded the Alperts to purchase the unit was their belief that unit 205 had a covered parking space permanently assigned to it.
There are 32 units at Le’Lisa, but only 20 parking spaces are located under the building, shielded from the elements. Enough parking is available at Le’Lisa to accommodate all unit owners; however, 12 owners must always park outside. Since 1984, the covered spaces have been assigned based on length of ownership in the condominium: When a unit with a space under the building is sold, the parking space is reassigned to the owner who has been denied covered parking the longest, that is, to the most senior unit-owner who is not currently assigned a space under the building. This parking allocation method was followed pursuant to a legally unenforceable condominium rule, which had not been promulgated in accordance with the requirements of the Maryland Condominium Act.
The Alperts did not acquiesce to the parking policy. Instead, they continued to use the space under the building that the previous owner of unit 205 had used. In July 1993, Le’Lisa painted over the number, changing it from 205 to 208. The sign was repainted when the Alperts objected, but it was re-designated as 208 in September 1993. Again the Alperts objected and were rewarded with a new sign indicating the space was assigned to their unit. In March 1994, after the subject suit was instituted, the sign was once again changed to 208.
Section 7 of the Le’Lisa condominium declaration provides that all parking on condominium property is part of the general common elements. Article XIV of the by-laws, at the time the Alperts purchased their unit, stated that “[p]arking in the common elements shall be reserved for the use of owners, their tenants, guestes [sic], invitees and licensees.” No mention was made in either the declaration or the by-laws of any parking regulations or system for assignment of spaces. Appellants received a copy of the declaration and by-laws prior to their purchase of unit 205.
The Council of Unit Owners held a special meeting on April 16, 1994; 31 of the 32 units were represented in person or by proxy. At that meeting, Article XIV of the by-laws was amended to read:
Parking in the common elements shall be reserved for the use of owners, their tenants, guests, invitees and licensees, in those designated spaces determined by the Board of Directors based on the length of ownership of the unit. The covered spaces shall be allocated to the owners who have owned their units for the longest period of time. Upon the*245 sale of a unit whose owner has a covered parking space, the parking space will be assigned on the basis of longevity of ownership, that is, the spaces under cover of the building are apportioned for the use of the owners owning the unit for the longest period of time and the date of recording of the deed conveying the unit to the owners shall be conclusive evidence of the time at which the unit owner acquired ownership; or such parking can be otherwise designated by the Board of Directors based upon the manner of designation agreed to by affirmative vote of unit owners having at leas[t] 66|% of the votes in the Council of Unit Owners.
The by-law amendment passed with the approval of 93.7 percent of the unit owners. The Alperts were the only owners at the meeting not to approve the amendment. They abstained. A certificate of the change in the by-laws was recorded in the Land Records office of Worcester County, Maryland.
DISCUSSION
I.
Appellants contend that the hearing judge did not answer their claim that the council of unit owners had no authority to assign individual parking spaces. “In an action properly brought under the Declaratory Judgments Act, the court ordinarily must declare the rights of the parties in light of the issues raised.” Jennings v. Government Employees Ins. Co., 302 Md. 352, 355, 488 A.2d 166 (1985); see also Md.Code (1974, 1995 Repl.Vol.), § 3-406 of the Courts and Judicial Proceedings Article. There is no error in dismissing an action when the trial judge declares in some detail in a written opinion the rights of each party. See Downing Dev. Corp. v. Brazelton, 253 Md. 390, 394, 252 A.2d 849 (1969) (holding that dismissal of action was not error when written opinion “delineated in some detail” rights of parties and reasons for court’s holding); Pope v. Sun Cab Co., 62 Md.App. 218, 488 A.2d 1009 (1985) (holding that trial court did not dismiss declaratory action without declaration of rights because order incorporated by reference reasons stated in mo
II.
Appellants argue that Le’Lisa does not have the authority to designate specific parking spaces for the exclusive use of individual unit owners without amending the declaration by unanimous consent of the unit owners. The Alperts assert that, because the parking area is designated as a common element in Le’Lisa’s declaration and because no reference is made in the declaration to assignment of parking spaces, the council cannot assign spaces. The Alperts further argue that to do so would encroach on each tenant’s right to access and possession of the common elements, thereby prejudicing the rights of other tenants without each tenant’s consent.
Le’Lisa’s by-laws, Article V, § 1, provide that the affairs of the council of unit owners shall be governed by a board of directors, and Article V, § 3(d), authorizes the board to promulgate and enforce “such rules and regulations and such restrictions on or requirements as may be deemed proper respecting ... the use of the general and limited common elements as are designated to prevent unreasonable interference with the use and occupancy ... of the general and limited common elements by the members----” (Emphasis added.) The council of unit owners is expressly authorized by statute to regulate the use of the common elements. See RP § 11—109(d)(12) (“The council of unit owners has ... the following powers: ... [t]o regulate the use, maintenance,
The central issue to be decided is whether the assignment of parking spaces is a regulation of the use of a common element or a taking of a portion of each unit owner’s percentage interest in the common areas. This is an issue of first impression in Maryland. If the assignment of parking spaces is a change in the percentage interest in the common elements, Le’Lisa must pass an amendment to the declaration, which must be approved unanimously, to make the change effective; a mere by-law amendment would be ineffective. See RP § ll-107(c) (“Any change [in percentage interest of the common elements] shall be evidenced by an amendment to the declaration”). If the assignment of parking spaces is a regulation of use restriction, a by-law amendment is sufficient to institute the parking system. See § ll-104(c) (“The bylaws may contain any ... restriction on or requirement respecting the use and maintenance of ... the common elements.”).
There is a distinct difference between [cases] in which exclusive use, control, and/or ownership of the common areas is taken from some or all of the unit owners and cases in which some reasonable restrictions or regulation of the common areas is imposed on all owners. In the first instance, each owner’s percentage interest in the common area is altered. In the second instance, the percentage ownership is unaffected.
Jarvis v. Stage Neck Owners Ass’n, 464 A.2d 952, 956 (Me. 1983). “Use restriction” has been defined as a rule “reasonably related to the promotion of the health, happiness and peace of mind of the unit owners.” Hidden Harbour Estates v. Basso, 393 So.2d 637, 640 (Fla.Ct.App.1981). Such restrictions are generally promulgated in order to “prevent activities which might prove annoying to the [other] residents.” Ritchey v. Villa Nueva Condo. Ass’n, 81 Cal.App.3d 688, 146 Cal.Rptr. 695 (Ct.App.1978). Use restrictions usually take the form of rules that impose a wide variety of restraints on what unit owners may do on or with condominium property. See,
[IJnherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property. Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization.
Hidden Harbour Estates, supra, 309 So.2d at 181-82.
Courts in other states have addressed issues similar to the one presented here. In Kaplan v. Boudreaux, 410 Mass. 435, 573 N.E.2d 495 (1991), the issue was whether a by-law amendment altered the percentage interest in the common elements of the owners. Boudreaux owned unit 11 at 90 Park Street Condominium. The condominium master deed designated all land and walkways as common areas. Id., 573 N.E.2d at 496. The by-laws prohibited all occupants from using the outdoor common areas for any purpose other than ingress and egress along paved paths.
The Massachusetts Supreme Judicial Court held that the “grant of exclusive use to one unit owner of a common area is sufficient to change the relative interest of the unit owners in that common area.” Id., 573 N.E.2d at 500. This exclusivity of use was the deciding factor in the court’s holding that the amendment was not a “generalized use restriction” but was, instead, an invalid taking of a portion of each unit owner’s percentage interest in the common areas. Id.,
In Makeever v. Lyle, 125 Ariz. 384, 609 P.2d 1084 (Ct.App.1980), Lyle, a unit owner at Laguna West, a condominium regime, began construction of a second story on his unit and a basement under his carport after receiving the approval of twelve of the sixteen unit owners.
The Arizona intermediate court held that a condominium association “must have broad powers in determining and managing the common uses of the general common elements.” Id., 125 Ariz. at 388, 609 P.2d at 1088.
[T]he power ... to actually convert the common general elements to the exclusive and private use and control of one of the individual owners constitutes a taking of the other*251 remaining individual owners’ property.... [I]t is a great step from a delegation of the right to manage one’s interest in the general common elements for common purposes to a grant of the right to dispose of that property interest completely for the sole, exclusive and private use of another.
Id., 125 Ariz. at 389, 609 P.2d at 1089 (emphasis added). The court held that the construction was a taking.
Kaplan and Makeever are distinguishable from the situation at issue here because both involved the grant of exclusive use of a portion of the common area to one unit owner only. What Le’Lisa has done, however, is granted temporary use of a portion of the common area to each unit owner.
Appellants cite a trio of Illinois cases as supporting their position that parking assignments are not use restrictions but are, instead, a taking that diminishes an owner’s interest in the common elements. In Stuewe v. Lauletta, 93 Ill.App.3d 1029, 49 IllDec. 494, 418 N.E.2d 138 (1981), the Illinois intermediate court held that the Les Chateau condominium could not assign parking spaces to a particular condominium unit owner without obtaining approval of all the owners. Id., 49 Ill.Dec. at 496, 418 N.E.2d at 140. The Laulettas had contracted to buy a condominium unit and two parking spaces inside the garage. When it turned out there was no room in the garage, the developer designated a new parking space that had not been previously identified as a parking area on the survey of the property. Id., 49 Ill.Dec. at 495, 418 N.E.2d at 139. The shrubbery was removed from this area and the Laulettas began to park there. Id., 49 Ill.Dec. at 496, 418 N.E.2d at 140. An amendment to the condominium’s declaration to provide for these two parking spaces was discussed by the Les Chateau board of directors but never approved. Id. Several other unit owners brought suit contending the Laulettas had attempted to purchase a parking space that the developer did not own and that the parking area remained part of the common elements. Id. The Laulettas contended they had contracted to buy two spaces and were thus entitled to them. Id.
In Schaumburg State Bank v. Bank of Wheaton, 197 Ill. App.3d 713, 144 Ill.Dec. 151, 555 N.E.2d 48, cert. denied, 133 Ill.2d 573, 149 Ill.Dec. 337, 561 N.E.2d 707 (1990), the Schaumburg State Bank, as trustee for the owner of a commercial unit in Mona Kea Condominiums, filed suit to quiet title to its one-eighth undivided interest in the common elements. Id., 144 Ill.Dec. at 152, 555 N.E.2d at 49. The condominium association had amended the declaration to allow Mona Kea to grant an easement of ingress and egress for vehicular and pedestrian traffic over its common driveway with the GaryWheaton Bank on the adjoining property. The Gary-Wheaton Bank granted a similar easement over its common driveway to Mona Kea to form a continuous passage from roadways running along opposite sides of the properties. Id., 144 Ill.Dec. at 152-153, 555 N.E.2d at 49-50. The Schaumburg State Bank alleged that its interest in the common elements was damaged by the easement. The Appellate Court of Illinois held that the grant of a non-exclusive easement over the common areas to a third party did not diminish the percentage of common ownership appurtenant to each condominium unit. Id., 144 Ill.Dec. at 155, 555 N.E.2d at 52.
Relying on dicta in Schaumburg, the Appellate Court of Illinois held in Sawko v. Dominion Plaza One Condo. Ass’n, 218 Ill.App.3d 521, 161 Ill.Dec. 263, 578 N.E.2d 621 (1991), that a condominium association’s adoption of a parking rule assigning garage spaces improperly diminished an owner’s interest in the common elements. The Dominion Plaza board had decided in closed meetings to restrict parking in the West Garage by assigning spaces to unit owners. Id., 161 Ill.Dec. at 265, 578 N.E.2d at 623. Sawko, a unit owner, sought an
The court held that, because the condominium’s grant of use of a parking space precludes any other unit owner from using a space to which the owner previously had access, the unit owners’ property interests were diminished. Id., 161 Ill.Dec. at 269, 578 N.E.2d at 627. The court never fully addressed the notice argument. Once it found that the garage was part of the common elements, it held that any restriction depriving unit owners of use of the common elements was invalid as promulgated. The Illinois court did not consider whether the assignment was merely a use restriction.
The trial judge in Oakhampton Assoc., Inc. v. Reeve, 99 Md.App. 428, 637 A.2d 879 (1994), relied on the aforementioned three Illinois cases in ruling that a homeowners’ association had no authority to assign parking without the unanimous consent of the members. We reversed that decision because the trial judge had relied on condominium law, thereby failing to distinguish the property interests of unit owners in a condominium regime, who own the common areas as tenants in common, and unit owners in a multiunit residential planned community, who only own a limited easement of reasonable ingress and egress over the common areas while
Appellees rely on Juno By The Sea North Condo. v. Manfredonia, 397 So.2d 297 (Fla.Dist.Ct.App.1980) cert. denied, 402 So.2d 611 (Fla.1981). In that case, Juno by the Sea, a condominium regime with 70 units, had 97 parking spaces: 20 spaces under cover, 50 spaces adjacent to the building, and 27 spaces across the street from the building. Id. at 301. The 20 covered spaces were designated as limited common elements and sold to individual unit owners. All other parking spaces were designated common elements. The 50 spaces adjacent to the building were assigned to the 50 unit owners who had not bought covered spaces. Id.
Several unit owners brought suit against the condominium association, alleging that the parking assignment scheme improperly converted parts of the common elements into limited common elements. Id. at 302. The condominium association asserted that it had been given broad authority to regulate the use of common elements and limited common elements under the Florida statute and its own declaration. Id. The Florida District Court of Appeals agreed with the condominium association, holding that it had the authority to regulate the use of common elements and that the assignment did not change the parking spaces into limited common elements because they did not become appurtenant to the units. Id. at 302-03. The Court continued:
Moreover, we do not believe that by assigning individual spaces in a common element parking lot the association is “materially altering” those common elements. The common elements parking lot involved continues to be used as a parking lot for the benefit of the unit owners. If [the unit owners’] argument were accepted there could be no assigned spaces even if there were 70 instead of 50 spaces in the lot adjacent to the building. Surely some regulation of the parking areas would be necessary even if there was an excess of parking spaces in the lots.
*255 Parking spaces, by their very nature, are exclusive; i.e., only one vehicle can be parked in a space at a time. By necessity the 50 spaces are going to be used “exclusively” by 50 out of 70 of the unit owners at any given time. In other words, 20 of the unit owners will always be excluded from use of the 50 spaces no matter what regulations are enacted.
Id. (internal footnote omitted) (emphasis added).
We believe that the Florida case is better reasoned than the Illinois cases and follow it here. Le’Lisa has restricted the use of parking spaces in order to avoid a chaotic free-for-all by assigning each unit owner a parking space and allowing each unit owner to become eligible for the more preferred spaces. The parking restriction is related to pro
“[T]he appropriate standard of review for evaluating a condominium bylaw amendment containing a use restriction is reasonableness.” Ridgely Condo, v. Smyrnioudis, 105 Md.App. 404, 422, 660 A.2d 942 (1995). Neither party contends that the restriction is unreasonable; therefore, the by-law amendment is sufficient to institute the parking system. See RP § 11-104(e).
III.
Appellants argue in the alternative that Le’Lisa violated section 11-135 of the Maryland Condominium Act by not disclosing the parking system prior to the Alperts’ closing date thereby estopping it from reassigning their parking space. Section ll-135(a) requires that certain disclosures be made by the condominium unit owner to a prospective purchaser not later than 15 days before closing. The unit owner must provide a copy of the declaration, the by-laws, rules and regulations, and a certificate containing information such as operating budget, insurance policies, and the existence of leasehold estates affecting the condominium. Section 11-135(c) requires the council of unit owners to furnish any unit owner who is considering selling a unit the certificate called for in subsection (a) and any other information the unit owner needs in order to comply with subsection (a). It further states
Assuming, arguendo, that section 11-135 imposes a duty of disclosure on Le’Lisa, appellants’ argument fails. As already noted, the parking system had never been properly promulgated. Le’Lisa cannot be required to disclose to appellant a rule that was never properly adopted and was thus invalid.
JUDGMENT AFFIRMED; COSTS TO BE PAID BY APPELLANTS.
. This belief was not based on anything appellees or the previous owners of unit 205 represented to the Alperts. It was apparently based on the fact that one of the covered parking spots had, at the time of purchase, the number 205 painted on it. Appellants assumed the parking spot was reserved for their unit.
. The requirements for adoption of condominium rules and regulations are: each unit owner must be mailed a copy of the proposed rule, notice that the owner is permitted to submit written comments, and notice of the proposed effective date of the rule; an open meeting must be held to allow unit owners’ comments on the proposed rule; the rule must be passed at a regular or special meeting by majority vote. Md.Code, (1974, 1988 Repl.Vol.), § 11-111 of the Real Property Article.
Apparently, these formal requirements were not always followed by Le’Lisa. The rule does not appear in the minutes of the condominium association for 1984 when it was purportedly “passed” by the board. The only written mention of the policy is in the minutes of the 1989 annual meeting, which states only that the parking system was discussed at that time.
. Appellants expressly state in their brief that they are not contending that Le’Lisa has created a limited common element out of a common element by implementing its parking policy. Appellants maintain that they did not make this argument in the circuit court, however, the hearing judge expressly asked if this was what they were arguing and appellants answered affirmatively.
THE COURT: Well, let me ask you this ... just so I can summarize your argument for you.... [Yjour argument is that you can’t take a common element, and by a bylaw, turn it into a limited common element?
THE PLAINTIFF STANLEY ALPERT: That is correct, Your Hon- or.
At oral argument in this Court, appellants seemed to have reverted to their position at the hearing. Mr. Alpert argued that appellants contend that Le’Lisa "in effect” made a limited common element out of the parking spaces by assigning them to individual unit owners. This is plainly not correct.
Limited common elements are those parts of the common elements that "shall be used only by the unit owner of the unit to which their use
. The by-laws prohibited "all ... activities” other than ingress and egress along the walkways, including "barbecuing or cooking, sun bathing, loitering, participating in games or other recreation.” Kaplan, 573 N.E.2d at 497 n. 4.
. The board of directors never officially approved the construction.
. Dominion Plaza argued it had the authority to adopt reasonable rules and regulations under Article V, paragraph 7 of its declaration, which stated that its board of directors may do so at any meeting with a quorum present. Sawko argued that the parking assignment had to be valid under a different provision of the declaration, Article XII, paragraph 9, which "set out procedures to modify the declaration’s provisions regarding the unit owners’ ownership of the common elements.” Id., 161 Ill.Dec. at 267, 578 N.E.2d at 625.
. Appellants attempt to distinguish this case by noting that the decision rests upon the fact that the unit owners had at least constructive notice of the parking regulation before buying because Rule V of the Rules and Regulations of the association dealt with parking assignments. See id. at 304, 302. Appellants in this case did have notice that there was assigned parking at Le’Lisa; however, they did not have notice as to how the system worked.
Further, appellants had notice from Article XVI of the by-laws that the document could be amended by a 66% percent vote of the unit owners. Appellants also had notice that the by-laws could contain “restriction^] on or requirement[s] respecting the use and maintenance of the units and the common elements.” RP § 11-104(c). See Allers v. Tittsworth, 269 Md. 677, 686, 309 A.2d 476 (1973) ("Every man is presumed to know the law”). Therefore, appellants knew the by-laws could be amended by the insertion of use restrictions. Cf. Board of Directors of By the Sea Council v. Sondock, 644 S.W.2d 774 (Tex.Ct.App. 1982) (holding that condominium owners knew at time of purchase they bought subject to all provisions of declaration, one of which was right to amend it).
Appellants also attempt to distinguish Juno by arguing that the Florida condominium statutory scheme, unlike Maryland's, does not state that common elements are owned by the unit owners as tenants in common. This is incorrect; the Florida statute merely does not call the interest a "tenancy in common.” The Florida statute states that “[tjhere shall pass with a unit, as appurtenances thereto: An undivided share in the common elements.” FLA.STAT.ANN. § 718.106 (West 1988). This is indistinguishable from the definition of a tenancy in common: “A form of ownership whereby each tenant {i.e., owner) holds an undivided interest in property.” BLACK'S LAW DICTIONARY 1465 (6th ed. 1990).
. We recognize that a temporary taking "is not different in kind” from a permanent taking if it denies a landowner all use of his property. See First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304, 318, 107 S.Ct. 2378, 2387-88, 96 L.Ed.2d 250 (1987). We merely note that the length of the granted use is a relevant factor to be considered in determining whether the regulation is a taking or a use restriction.