February 21, 2008

Court takes the plain meaning of a homeowner's association declaration to find that developer's obligation to pay fees had not commenced


This appeal involves the interpretation of a declaration of covenants for a homeowners’ association. The declaration made the developer a member of the homeowners’ association, insofar as the developer owned lots within the development. It also stated that the obligation to pay assessments on a given lot did not begin until either the lot was transferred from the developer or improvements on the lot were completed, whichever occurred first. The homeowners’ association sued the developer, seeking damages for unpaid assessments on lots owned by the developer, on which improvements were not complete. The trial court granted the motion for summary judgment filed by the homeowners’ association. The developer appeals. We reverse, concluding that the declaration of covenants provides that the obligation to pay assessments on the lots owned by the developer had not yet commenced.

Opinion may be found at the TBA website:

"Resolution of this dispute requires interpretation of the terms of the Declaration. At the outset, we note that our construction of the Declaration must proceed as would construction of any other written agreement. [] Accordingly, our first concern is the contracting parties’ mutual intent. [] If we find the Declaration to be unambiguous as it is written, the intention of the parties will be determined by the Declaration’s plain meaning. [] If a material part of the Declaration appears to be ambiguous, we look to extrinsic evidence. The ambiguity may be resolved against the party who drafted the Declaration." Id. (citations omitted).

"It is undisputed that the lots for which the assessments are sought are owned by Gill Development or were owned by Gill Development at one time. It is also undisputed that the improvements on those lots were incomplete at the time when the assessments were allegedly due. Accordingly, Gill Development’s obligation to pay assessments had not yet commenced." Id.