New Case: Townhome Association Lacks Standing to Bring Action
The North Carolina Court of Appeals issued a decision on August 4, 2020 addressing maintenance responsibilities and specific language in association governing documents in the case of Shearon Farms Townhome Owners Association II, Inc. v. Shearon Farms Development et al. The major issue in the case was whether the association had standing (in simple terms, a stake) to bring the action against the companies and individuals, including the siding manufacturer, involved in the construction of the townhomes.
Factually, siding on some, but not all, of the townhomes became warped, due to “abnormal reflections of extremely high heat from the windows on the townhome units.” The association filed the action and the trial court dismissed the case, asserting that the association “was not legally entitled to assert the claims for warped, distorted, or melted siding.” The association appealed.
The Court of Appeals reviewed the language in the declaration regarding association repair responsibility. As is normally the case in townhome associations, the declaration provided language that the association was to:
provide exterior maintenance upon each Living Unit which is subject to assessment hereunder, as follows: paint, repair, replace and care for all roofs, gutters, downspouts, exterior building surfaces, trees, shrubs, grass, walks, mailboxes, fences installed by Declarant or approved by the Association, exterior post lights (excluding electricity therefore), and other exterior improvements.
The Court also reviewed other language in the declaration, in the same article, which read in pertinent part: "Casualty Loss Not Included. Maintenance and repairs under this Article arise from normal usage and weathering and do not include maintenance and repairs made necessary by fire and other casualty or damage." The court reviewed the language in these two sections together and found that the association is not obligated to do the repairs in this case, because based upon the plain, ordinary language; the association is responsible for maintenance repairs of expected normal usage and weathering. The court categorized the melting of the siding due to the window reflection as unexpected damage, not normal usage and weather, and therefore, held that the association would not be responsible for the replacement and/or repair of the siding and windows. The association not being responsible, it had no standing (meaning it had no stake) to bring these claims against everyone involving the construction of the townhomes and the manufactured windows.
It is unclear, based upon the ruling, whether the court would have found that the association had standing had the language regarding the “Casualty Loss Not Included” section not been in the declaration. Therefore, we can assert, until further guidance comes down, that this opinion has limited application due to the specific language contained in the declaration.
The opinion contains an in-depth discussion of standing and other procedural issues that are not addressed here.
Here is a link to the opinion: https://appellate.nccourts.org/opinions/?c=2&pdf=39539
We are happy to discuss these issues with you if you have any questions and we encourage you discuss this case with your association attorney if you believe it has applicability to your association.
Author: Chris Gelwicks