Opinion ID: 2593799
Heading Depth: 1
Heading Rank: 13

Heading: Debt Service Charges

Text: The Owners contend that a debt service charge not related to common area expenses is improperly included in the monthly assessments nor was it assessed on a proportional basis per condominium unit. The district court held that the amounts charged improperly violated the per unit rule. The debt service charges relate to industrial revenue bonds issued to finance construction of the health care center, the nursing home, the wellness center, and the administrative complex, including the main lobby area, the Harvest Table dining room, and a Menno Hall. As of 1991, the accountants had recommended that the portion of debt service attributable to condominium use be assessed to condominium owners. Twenty-two percent of the bond debt service was apportioned to the condominiums based on square footage usage. We note that the debt service allocation relates to the construction of the facility rather than the monthly operations of the facilities. The court found that this allocation and expenditure is reasonable and authorized under the declarations if properly assessed. The Owners argue that because they never signed a document or agreed to pay or assume the obligation for repayment of the bonds, the bonds cannot be assessed to them. The trial judge determined that under the declaration a specific signed obligation is not required and concluded it was proper to include a portion of the capital costs associated with construction of the Village amenities as a common expense. The trial judge's conclusion is supported by substantial competent evidence.