Court Opinion

ID: 6723429
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:00:00.446209+00
Date Added: 2024-06-11T16:01:35.454155
License: Public Domain

Justice MARTIN
dissenting.
The majority decision relieves respondents of the statutory duty to contribute pro rata toward the expenses for renovating their condominium common areas. This decision contravenes the legislative purpose behind the enactment of N.C.G.S. § 47A-12, which requires all unit owners to pay their pro rata share of common expenses. This outcome-determinative provision states succinctly: “[U]nit owners are bound to contribute pro rata____No unit owner may exempt himself from contributing toward such expense . . . .” N.C.G.S. § 47A-12 (2011). In reversing an assessment imposed to recoup expenses for common area renovations, the majority unjustifiably excuses respondents from contributing their pro rata share. Respondents’ neighboring owners and the Starboard By the Sea Condominium (Starboard) complex are thus left to bear respondents’ lawful burden.
Respondents own a unit in Building 33 and a 1.06160 percent undivided interest in Starboard’s common areas and facilities. The Starboard Association approved renovations to Starboard’s entire complex, except Building 33, on 8 October 2005. These renovations improved common areas and facilities in which respondents have an ownership interest. All unit owners, except for those in Building 33, were charged for the renovations at that time. Respondents did not object to this omission. When respondents and the other Building 33 unit owners subsequently requested that their building be renovated, *261they were told renovations to their building would begin “in the near future.” The board approved renovations to respondents’ building in November 2007, two years after it approved renovations to the other buildings. The total cost of all the renovations to the Starboard complex was $5,074,000. Divided among all unit owners on a pro rata basis, as specified by both the Unit Ownership Act (Act) and Starboard’s Declaration of Condominium, the amount owed by respondents for the renovations to the Starboard complex was $53,865.54.
Starboard did not charge respondents $53,865.54 when it began renovating the other buildings in the complex. Instead, Starboard waited until renovations began on respondents’ building and charged them $54,000.00 — $134.46 more than they owed as owners of a unit, an overcharge of about .25 percent. Respondents paid $27,000.00 of the amount owed, but then refused to pay the balance. Because of respondents’ refusal, Starboard paid for the remainder of the renovation contract and initiated foreclosure proceedings against respondents’ unit to recoup the unpaid assessment
“[T]he provisions of section 47A-12 are designed to protect unit owners from shouldering a disproportionate share of the maintenance expenses for common areas when other unit owners . . . attempt to unilaterally exempt themselves from contributing their pro rata share of maintenance expenses.” Dunes S. Homeowners Ass’n v. First Flight Builders, Inc., 341 N.C. 125, 130, 459 S.E.2d 477, 479-80 (1995).
The majority apparently believes that section 47A-12 mandates a specific procedure for assessments. This construction, however, is not supported by the language of the statute. Section 47A-12 is concerned not with procedure but with outcome, and imposes an obligation on all unit owners to pay their pro rata share of expenses for maintenance and repair of common areas: “[U]nit owners are bound to contribute pro rata .... No unit owner may exempt himself from contributing toward such expense . . . .” N.C.G.S. § 47A-12. Significantly, the Act requires that the association’s bylaws specify the “[m]anner of collecting from the unit owners their share of the common expenses.” N.C.G.S. § 47A-19(4) (2011). Section 47A-12 does not include any procedural requirements regarding the timing or manner of assessments. Instead, the statute incorporates guidelines designed to ensure proportional contributions by unit owners. Starboard’s Declaration similarly states that assessments against unit owners shall be uniform and in the same ratio as the ownership interest.
*262In addition to not providing a specific assessment procedure, the Act does not provide a remedy for an improperly calculated assessment. Allowing respondents to avoid paying the correct amount of $53,865.54, as the majority does here, allows them to avoid their statutory duty to contribute pro rata for common area expenses under section 47A-12. This result defies the “ ‘simple logic and obvious fairness that owner-members should not be permitted to demand services for which they can refuse to make payment.’ ” 6A Patrick J. Rohan, Real Estate Transactions: Home Owner Associations and Planned Unit Developments § 9.01, at 9-4 (Matthew Bender & Co. June 2012) [hereinafter Real Estate Transactions] (citation omitted).
Just as the statute does not support the majority decision, neither does our case law. In Dunes South Homeowners Ass’n the defendant developer, like respondents in this case, challenged the validity of an assessment and subsequent lien imposed by the homeowners association. 341 N.C. at 128, 459 S.E.2d at 478. Noting “the legislature’s intent to ensure the orderly, reliable and fair government of condominium projects,” we held that the developer could not escape its statutory duty to pay for its share of the costs of maintaining the complex. Id. at 130-31, 459 S.E.2d at 479. Like the developer in Dunes South, respondents are not excused from their statutory duty to contribute their pro rata share because of a minor computational error.
Starboard’s assessment for renovations was authorized by statute, and its mistaken overcharge of less than one percent does not invalidate the assessment. See, e.g., Oronoque Shores Condo. Ass’n No. 1 v. Smulley, 114 Conn. App. 233, 238-41, 968 A.2d 996, 999-1000 (2009) (concluding that a unit owner was not excused from paying a valid assessment simply because of a miscalculation that was later corrected). As long as the outcome of an assessment against unit owners is representative of their ownership percentage, as required by section 47A-12 and Starboard’s Declaration, this Court should not exempt respondents from paying their share of the requested renovations. Respondents cannot use the miscalculation to “justify unilaterally withholding or refusing to pay assessments.” Wayne S. Hyatt, Condominium and Homeowner Association Practice: Community Association Law § 607(a), at 117 (3d ed. 2000). The majority decision to excuse respondents from paying their pro rata share necessarily “forces other owners to carry the burden of these unpaid assessments in addition to their normal assessments.” Real Estate Transactions § 9.01, at 9-4.
*263Finally, the facts of this case do not require the result reached by the majority, which heavily rests on its reading of the trial court’s findings of fact. Contrary to the majority assertion that the trial court found “there were two assessments here, rather than one,” the trial court made no such explicit finding. Instead, the trial court found:
20. Following the annual meeting, the Board of Directors entered into a contract for the renovations of all the buildings except Building 33, and levied a special assessment against the unit owners of all the buildings except Building 33 unit owners.
23. Sometime in the fall of 2007, the Board of Directors of Starboard approved a construction contract... for renovation of Building 33 .... The Board also approved a special assessment to be levied against the owners of the three units in Building 33 ... .
The trial court did not find, as the majority suggests, that there were two discrete and unrelated assessments. The renovations to be made under both contracts were substantially similar: new siding, new windows and doors, new stairways and decks, and other improvements. The $54,000.00 charged to respondents was the amount Starboard would have billed them if Starboard had charged all owners for the entire project at the outset, though with a .25 percent discrepancy. These facts tend to show that the assessment levied against the Building 33 unit owners, including respondents, was indeed part of one larger transaction, and that Starboard merely waited to charge the respondents until work began on their building. The facts do not lead to the conclusion that Starboard wrongfully charged respondents, particularly to such an extent that they should be excused from their statutory duty to contribute pro rata under section 47A-12.
N.C.G.S. § 47A-12 requires all unit owners to pay their pro rata share of common expenses. The majority decision ignores the outcome-determinative provisions of section 47A-12 and shields unit owners who were content to allow their neighbors to bear the cost of renovating their common property. This case should be remanded and respondents required to contribute their correct pro rata assessment. Accordingly, I respectfully dissent.
Justices NEWBY and JACKSON join in this dissenting opinion.