Real Property Notes Blog

Court of Appeals declines to extend duties under Landlord-Tenant Relationships Act to condominiums

The Landlord-Tenant Relationships Act imposes on every landlord of residential property the duty to keep the premises in reasonable repair and to comply with all laws and ordinances.  In Huk v Golfpointe Village C.A., an unpublished Court of Appeals Case, the plaintiff was injured while riding his bike on a condominium road.  He claimed that the gravel and potholes were a violation of the duty to keep the premises in reasonable repair under the LRTA.  The court declined to apply the LRTA to condominiums, finding that the clear language of the act applied only to landlords.

Summer Resort Association recovers attorney fees by virtue of corporate bylaws even in the absence of a provision in the Reclaration of Restrictions

In Great Lakes Shores, Inc v Bartley, a previously unpublished Court of Appeals opinion now published, the court held that a summer resort association may recoup its costs and attorney fees against a defaulting lot owner if a provision is contained in the corporate bylaws of the association, even if there is no provision for attorney fees and costs in the declaration of restrictions.

This case is a significant victory for homeowner and summer resort associations, especially those whose declaration of restrictions provides for a lien, but not for recovery of attorney fees.  The court held that the bylaws constitute a contract between the parties and a provision for attorney fees in the bylaws was sufficient to allow an award of attorney fees to the association.  The cost of foreclosing a homeowner association lien is often many times the amount of the lien itself.  Absent a cost-shifting provision, pursuing collection of unpaid assessments is impractical for the association.  Now, associations may amend their bylaws to include an attorney fee provision.

Mortgagee’s Attorney Fees Secured by Mortgage and May Be Added to Proof of Claim, Subject to Court Determination of Reasonableness

In In re Misleh, the debtor filed a lawsuit against his mortgagee to stop foreclosure on his mortgage.  The lawsuit was settled and the debtor agreed to a judgment for $17,000 in attorney fees.  He subsequently filed a Chapter 13 bankruptcy.  The mortgagee filed a proof of claim for the mortgage, and included $25,000 in attorney fees.  The debtor objected to the proof of claim, arguing that the attorney fees should be only $17,000, and that they were not secured by the mortgage since they were the subject of a separate judgment.

The court overruled the objection, finding that the language in the mortgage supported the bank’s argument that the attorney fees were additional debt secured by the mortgage.  However, the court ruled that it would hold an evidentiary hearing to determine the reasonableness of the attorney fees.

© Steve Sowell 2017