Opinion ID: 2593799
Heading Depth: 1
Heading Rank: 12

Heading: Marketing/Public Relations/Community Service Charges

Text: KBRS originally assessed Owners for costs of marketing the Village. The trial court found that although KBRS's initial budget included a marketing category, the evidence established that on the advice of their accountants, the costs for marketing the condominiums for resale was deleted from the budget and not included in later resident assessments. The marketing component shown in some budgets actually referred to costs of the community services director which was allocated to the condominiums. The community services director was in charge of coordinating community services and programs for the residents, organizing residents' support groups, supervising resident transportation to church and shopping, and obtaining governmental grants to purchase equipment for the benefit of condominium residents. The trial court found the allocated assessment authorized under the declaration to be reasonable and appropriate as to all the Owners. The Owners assert that in reaching its conclusion the trial court ignored evidence that the Owners were charged a marketing fee. For support they point to a November 1992 letter by Jim Huxman, President. He states: The third allegation [addressed in this letter] concerns the marketing expense of $13,875.00 being charged to KB Condo, Inc. While the gain from the resale of the condo and duplex units is credited to KBRS. Let me remind you that reserve funds previously established by the Bethel Home for the Aged were used to purchase the land and to construct the condos and duplexes that you are now living in. It is the commitment of the Board and administration to work at replenishing these funds. The marketing expense is further legitimatized by the fact that a priority list of prospects is continuing to be guilt so that when you desire to give up your unit, there will be a pool of buyers, and from the resale, the 90% buy back will be paid to you or your estate. The letter indicates that a marketing fee was being charged until at least November 1992. Under the Act a marketing fee is not authorized as a common expense. As such, the fee was improperly assessed and must be returned to the Owners if not time barred.