GSL Alert – Ruling from NH Supreme Court

Ruling from NH Supreme Court on Termination of Common Area Privileges and Services.

New Hampshire Housing Finance Authority v. Pinewood Estates Condominium Association.

In a decision issued today (9/20/16) the NH Supreme Court reversed and remanded a Superior Court ruling that pursuant to a Condominium Declaration the purchaser at foreclosure (the first mortgagee) was responsible to pay pre and post foreclosure condominium assessments before common area services have to be restored. In this case, a unit owner in Pinewood was delinquent on common assessments. Pinewood notified the unit owner and first mortgagee, New Hampshire Housing Finance Authority (“NHHF”), of the delinquency. The delinquent amounts were not paid and Pinewood terminated common area services, which included water and sewer. Subsequently NHHF foreclosed on the unit and purchased at the foreclosure sale. Following the foreclosure, Pinewood notified NHHF of the outstanding pre and post foreclosure common assessments. NHHF paid the post foreclosure assessment, refused to pay the pre foreclosure assessments and filed a declaratory judgment action in the Superior Court. NHHF sought a declaration that it took title to the unit free and clear of any junior encumbrances, namely the delinquent common assessments, and that Pinewood had no authority to terminate common area services.

The Court examined the interplay of the provisions of the Condominium Act governing termination of services (RSA 356-B46 IX) and unpaid assessments (RSA 356-B46 I). The statute says that the association’s lien is junior to, among other things, a first mortgage, except for a limited 6 month priority. In this case, Pinewood did not establish a priority lien. The Court concluded that NHHF’s foreclosure extinguished or wiped out the pre foreclosure common assessments on the unit and NHHF took title to the unit free and clear. The Court further concluded that since those pre foreclosure amounts were extinguished and all post foreclosure amounts were paid, that Pinewood had no authority to terminate services.

Link to the case:  NH Supreme Court Opinion 09/20/2016

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Hostile Housing & Harassment Oh My!

GSL ALERT!

HUD RELEASES NEW RULES AND REGULATIONS UPDATING STANDARDS TO BE APPLIED IN INVESTIGATIONS OF CLAIMS FOR HARASSMENT AND HOSTILE HOUSING ENVIRONMENTS

While both the federal and state laws have long prohibited harassment in housing because of race, color, religion, sex, national origin, disability, and familial status, until now there have been no formal standards for assessing claims of harassment under the Federal Fair Housing Act.

Recognizing the need for such standards to use in investigations and adjudication of claims of discrimination based on harassment and hostile environments, the Department of Housing and Urban Development, commonly referred to as “HUD,” on September 14, 2016 released new Rules and Regulations to be applied both in administrative hearings and in cases filed in the State and Federal Courts. These Rules and Regulations will go into effect on October 14, 2016.

It is worth mentioning that both federal law and the state law, in Massachusetts M.G.L. c. 151B had already imposed certain responsibilities on community associations to take action when the Board had been informed of a potential hostile environment allegedly being created by one Unit Owner against another, or a group of Unit Owners, who would be considered to be a protected class.

In fact in a recent matter before the Massachusetts Commission Against Discrimination (the “MCAD”) in which this office successfully represented the Board, the hearing investigator cited the following as the standard to be applied in determining whether a Board created or unjustly allowed a hostile environment to exist.

“In order for the Complainants to establish a prima facie case of discriminatory
harassment in housing, Complainants must show that: (1) they are members of a protected
class; (2) they were subjected to unwelcome verbal or physical conduct related to their
protected class; (3) the harassment was sufficiently severe or pervasive to interfere with
Complainants’ use or enjoyment of their home; and (4) the harassment was either carried
out by the landlord, owner, property manager, or their agent/employee, or Respondent
knew or should have known of the harassment and failed to take prompt remedial action.”
Note, that within the condominium context the laws are clear that the governing Board is deemed to be “the owner.”

With the recent release of the Rules and Regulations by HUD, a more formalized and expanded system of determining when liability will be imposed has been created.

Briefly, the Rule specifies how HUD will treat complaints of quid pro quo (“this for that”) harassment and hostile environment harassment going forward.

The four key components of the Rule are as follows:

  • There is now a formal definition of “quid pro quo harassment” and “hostile environment harassment.”
  • There are now formalized standards that will be used in both State Agencies (in Massachusetts the MCAD) and in both state and federal Courts;
  • The Rule includes illustrations of situations that will be considered to be allowing a hostile environment to exists; and
  • The Rule identifies when a housing provider, including community associations may be held responsible for actions by third parties in allowing harassment or hostile environment harassment to exist.

At a minimum the Rules impose liability when a condominium board knew or should have known of the discriminatory conduct of a third party (i.e. Unit Owner) and failed to take prompt action to correct it when the Board had the power to correct and end a discriminatory housing practice, either under the law or pursuant to its governing condominium documents.

The Rules also state that investigators and courts should look at the totality of the circumstances and apply the “reasonable person standard.” Under the Rules the standard is “Whether unwelcome conduct is sufficiently severe or pervasive as to create a hostile environment is evaluated from the perspective of a reasonable person in the aggrieved person’s position.”

As stated earlier while the liability under the both state and federal law already existed for Boards it will be interesting to see how these new formalized standards are applied by the administrative agencies and the courts.

If anything, the new Rules serve as a reminder that when in doubt about a situation described as harassment or creation of a hostile housing environment that has been reported to the Board, Boards would be advised to quickly contact their legal representative for guidance.

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GSL Alert – CAI Federal Government Advocacy

U.S. HOUSE OF REPRESENTATIVES PASSES BILL REGARDING HAM RADIO ANTENNAS AND TOWERS IN COMMUNITY ASSOCIATIONS

On Monday, September 12, the U.S. House of Representatives approved H.R. 1301. H.R. 1301 is the amended Amateur Radio Parity Act of 2016 that contains language adopted from a CAI compromise proposal. The Senate still needs to approve the legislation if H.R. 1301 is to be signed into law.

Initially, Community Associations Institute opposed H.R. 1301, because it contained language preempting association regulations on HAM radio use and severely curtailed association input on the use and placement of amateur radio antennas.

rooftop_hamWorking on behalf of its member associations, CAI’s Federal Legislative Action Committee worked with members of congress to incorporate several key changes to H.R. 1301, making it more acceptable to associations and owners alike. The adopted changes include:

  • Prior consent of the association is required by HAM radio operators to install outdoor antennas
  • Antennas will be prohibited on common property, and
  • Associations will be allowed to establish written rules concerning outdoor HAM radio antennas.

The recently approved H.R. 1301 legislation permits community associations to create and enact reasonable written rules concerning the installation and use of HAM radio antennas. These rules must permit the installation of an effective antenna, but may restrict HAM antennas to height, location, and aesthetic standards.

At this point, the Senate has not indicated when they would take up the amended version of H.R. 1301. If it does not become law in 2016, the bill would need to restart the legislative process in 2017. As always, we will keep you posted on any updates!

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