Opinion ID: 418832
Heading Depth: 1
Heading Rank: 2

Heading: Validity of the Assessment Ceiling

Text: 11 The Sails Apartment property was not originally part of the Martin's Landing project. The Declaration, in Article II, Section 2, allowed the developer to bring additional property within the scheme of the Declaration by filing and recording a Supplementary Declaration. Included in the Supplementary Declaration which added the Sails Apartment property to the scheme of the Declaration is the $45.00 ceiling provision. The district court held that the assessment ceiling was invalid for two alternative reasons: it violated Class A members' voting rights under Article III Section 2(a) of the Declaration, and it was inconsistent with the overall scheme of the Declaration. 12 Article III established a time period during which the developer would control the management of the Foundation. Two classes of voting membership in the Foundation were created: Class A, which consisted of all property owners subject to the Declaration except the developer, and Class B, which consisted of the developer. During the period of developer control, the Class A members had no voting rights except those specifically set out in Article III, Section 2(a). That section entitled Class A members to vote on any proposal to change the method of calculating the maximum amount of the annual assessments to be levied by the Foundation. The district court reasoned that the establishment of a fixed maximum annual assessment for some Foundation members and not for others is a change in the maximum annual assessment for all Foundation members. The maximum amount of the annual assessment which may be levied against some Foundation members, the apartment owners, is fixed, while the maximum assessment for other Foundation members is variable. It is clear that the obligations of members with variable assessments are affected by the fact that other members' maximum costs are fixed. 13 Defendants argue that Article III, Section 2(a), defining the Class A members' voting rights, must be construed harmoniously with Article II, Section 2(a). That section gives the developer the right to provide in a supplementary declaration such complementary additions and modifications of the covenants and restrictions contained in this Declaration as may be necessary to reflect the different character of the added properties and as are not inconsistent with the scheme of this Declaration, provided that those restrictions do not revoke, modify, or add to the covenants or restrictions of the Declaration with respect to the originally submitted properties. Defendants claim that the different character of the apartment property allowed the developer to add it to the Declaration's scheme on different expense terms without the prior approval of Class A Foundation members. Article II, Section 2(a), however, does not permit the developer to submit additional properties to the Declaration in a manner which bypasses any of the voting rights contained in Article III, Section 2(a). The Supplementary Declaration in this case contained a ceiling provision which changed the method of calculating the maximum amount of annual Foundation assessments, and Class A Foundation members had a right to vote on that provision. 14 The district court correctly concluded that the establishment of the assessment ceiling was inconsistent with the general scheme of the Declaration, which requires additional properties submitted to the scheme to pay their just share of Foundation expenses. It is undisputed that the apartment residents were entitled to use the Foundation's facilities on an equal basis with other Martin's Landing property owners. Although just share may not mean equal share, fixing a $45.00 ceiling for some Foundation members, with no apparent relationship to the assessments to be levied against other Foundation members, seems to defeat the purpose of the just share requirement. Defending the assessment ceiling, defendants argue that (1) the Sails Apartments had its own pool and clubhouse, which reduced the extent to which apartment residents used Foundation amenities, (2) the Foundation had lower bookkeeping expenses in collecting a single payment from the Apartments than in collecting assessments from individuals' homes, and (3) the ceiling was set at almost twice the amount of the 1972 assessments. These points may well argue for a lesser assessment against the Apartments as a just share of Foundation expenses, but they do not show that the Apartments' just share will never be greater than $45.00 annually. 15 Since we affirm the holding that the assessment ceiling is invalid because it conflicts both with the Article III Section 2(a) voting rights and with the general scheme of the Declaration, we need not address defendants' argument that the ceiling provision violates Georgia law.