HOA rights upheld in court
August 3, 2010
A Main Street landlord is being judged by the same rules it imposed on its tenants.
Judge Robert Hilder is expected this week to order Thompson National Properties to pay the Summit Watch Condominium Owners Association about $600,000 in fees it quit paying February 2009.
He said he would do so at a June 22 court hearing in Salt Lake City.
No one involved in the case will give an exact amount of monies owed, but court documents say the total is about $35,750 per month.
Attorneys for Thompson’s "doing business as" company NNN Summit Watch told the 3rd District Court it quit paying the fees because it believed the way they were assessed discriminated against the commercial tenants at the Marriott Summit Watch Resort.
Attorney David Scofield complained that most of the fees levied by the homeowner’s association benefited residential/resort units and not The Shops at the Village on Lower Main the name Thompson gave its areas. Scofield, also complained that repairs in the commercial area were neglected.
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Judge Hilder had trouble accepting that argument because earlier this year he permitted Thompson to evict Mulligan’s Irish Pub for not paying "common area maintenance" fees for similar reasons.
"There’s no good reason not to pay it, the numbers are clear, and I think that’s really not disputed. The dispute gets to the issue of if there’s any right to withhold," Hilder said at the beginning of the June 22 hearing. "It intrigues me a little bit because I was involved with one other suit you may not owe it all, but you owe some of it, and there was a victory on that basis," he said.
the end of the 80-minute hearing, Hilder ruled on several motions some in Thompson’s favor, some in the association’s but concluded it is unlawful for a member of a homeowner association to withhold payment because of a dispute. Payment must be made, and the protest pursued after.
Scofield had argued that until a valid assessment was made, there was no obligation to pay. He argued they were being charged maintenance fees for areas his clients did not, could not, use.
"Don’t you owe something? That’s the very thing you said to Mulligans he didn’t pay it so he got kicked out," Hilder said. "You’re not saying you’re not getting anything, you’re saying you’re not getting proportionate benefit is that any different from the argument made against, for example, Mulligans?"
Hilder argued that homeowner associations of which he personally was a member of three could not exist if people withheld payment of fees until disputes were resolved.
The fees are meant to benefit the property as a whole; it is therefore natural that some expenditures would benefit one type of tenant more than the other. But the presence of both resort and commercial areas benefits one another, he said.
The association’s attorney John Snow said he could not comment for this story. Scofield did not reply to a telephone message and a spokesperson for Thompson said they had no comment.
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