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WV Supreme Court: HOA can represent condo owners

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A home owners association can represent two or more home owners in litigation even if damages affect individual units, West Virginia Supreme Court justices recently said, answering a certified question coming out of Monongalia County Circuit Court. 

Justice Allen Loughry delivered the March 28 opinion of the court in the case of University Commons Riverside Home Owners Association Inc. v. University Common Morgantown, Koehler Development LLC, Collegiate Homes Inc., Richard Koehler, Frank Koehler, Adam Sharp, Richard Dunlap, OC Cluss Professional Services LLC, RE Crawford Construction Inc., Pozzuto and Sons Inc., Building Code Enforcement Official of Star City, Herron Engineering, Eagle Interiors Inc., Buh Construction, Triad Engineering Inc. and Universal Forest Products. 

In the suit, which justices referred to the mass litigation panel, the HOA brought legal action on behalf of 84 condo owners at the University Condominium Complex near West Virginia University. 

In its brief to the Supreme Court, the association alleged defendants built "a financial, structural and environmental disaster that will cost millions of dollars to repair." 

Some of the problems the association allege include improper drainage of water in and around the building and foundation, malfunctioning sewer pump lift stations, defective and improperly installed HVAC mechanical system, stone facades falling away form the building and visible and latent mold growth. 

However, defendants argue not everyone is experiencing problems, noting that only 21 of the 84 units identified problems in their HVAC system. 

"The HOA has been inconsistent in its representative claims and the defendants must be permitted to depose not only those unit owners with complaints but those without complaints in order to determine whether, for example, improper maintenance is a factor in the inconsistent complaints," defendants state in their state Supreme Court brief. 

Some of the defendants made a motion in November 2010 to have all the owners joined as plaintiffs, saying the home owners' association doesn't have the authority to pursue claims for damages to individual units. 

"The unit owners are necessary parties to this lawsuit and, without their involvement, the defendants are open to substantial risk of incurring multiple suits with the possibility of inconsistent adjudication," defendants argued in their brief.

The association moved for a protective order in 2011, seeking protection of its right to bring a suit on behalf of its members. 

The lower court denied the association's protective order and certified the six questions to the state Supreme Court. The lower court found that the association can only bring action on behalf of its members if it affects the "common interest community." 

The court additionally ruled the association could not represent owners on damages to individual units. 

Justices answered the first question, saying that a home owners' association can represent two or more unit owners in litigation when damages only affect individual units.  

Justices said "it is clear that the units are part of the common interest community." 

"Thus a purchaser of a condominium unit owns his or her individual unit along with an undivided interest in the ‘common elements' defined as ‘all portions of the common interest community other than the units,'" the opinion states. 

"Given the fact that a unit is a physical portion of the common interest community, it necessarily follows that damages only affecting individual units are nonetheless matters affecting the common interest community," justices wrote. 

Justices deferred other questions to the mass litigation panel, saying although there are not multiple lawsuits in this case, the legal action does involve multiple allegations asserted by multiple individuals. 

"We find that the only way to maintain fair standards of procedure in this instance is to transfer this case to the mass litigation panel," justices said.