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Obligation to Pay HOA Dues Survives Even the Strangest Circumstances

David Wilson

As community association attorneys, we hear all sorts of reasons from homeowners to explain why they haven’t paid their assessments.  These usually include legitimate explanations such as illnesses like COVID, job loss, or other hardships. 

Some homeowners are more creative.  One owner recently told our office that the presence of “entities” in the home was a reason for non-payment. 

In a recent case out of Kentucky, William and Theresa Thompson told their homeowners association they shouldn’t have to pay assessments on two lots they owned because the lots weren’t there anymore.  Although existing as two separate lots, they were treated as a single lot for purposes of assessments.  To be specific, their two lots are located next to the Cumberland River in southern Kentucky.  In 2016, one of the lots was severely eroded after flooding and other natural processes to the point that it essentially ceased to exist as a recognizable lot.  As a result, the Thompsons asked that they not have to pay assessments on these lots.  Their HOA refused. 

After several years of disagreement, the HOA filed liens against all the lots owned by the Thompsons.  The Thompsons sued their HOA, seeking, among other things, a determination that they did not owe any assessments for the vanished lot.  The trial court found in favor of the HOA and the Thompsons appealed. 

The Thompsons believed they should not be responsible for assessments on their submerged property because it was unusable.  But, their community’s governing documents made all owners personally liable for assessments, and specifically provided that liability could not be avoided by abandoning the property.  

The Thompsons argued that they did not abandon the lots but rather the lots abandoned them by eroding into the river.  In addition, the Thompsons contended that their HOA should not be allowed to collect assessments for the lots when it did nothing to prevent or correct the erosion.  

However, the Kentucky Court of Appeals could find no duty on the HOA to address erosion on the owners’ property.  Among other things, the governing documents contained the following language:  “No diminution or abatement of assessment or set off shall be claimed or allowed by reason of any alleged failure of the Association or the Board of Directors to take some action or perform some function required to be taken or performed by the Association or the Board of Directors under this Declaration, the By-Laws, or the Articles[.]”  The Court was equally unwilling to judicially alter the community’s governing documents to relieve the Thompsons of their obligation to pay assessments for their extinct property. 

See Thompson v. Lake Cumberland Resort Cmty. Ass’n for the full case.

Community associations like the one in this case depend on the contribution of all their owners to fund the services and obligations of the association.  Although the case is not binding in North Carolina or South Carolina, it does highlight a fact that is often proved to be true here—that the obligation to pay assessments on property owned in a homeowners association is not one that can be avoided easily.  

If you have any questions about assessments, obligations of owners to pay them, or other similar conundrums, contact one of our experienced community association attorneys.

Author: David Wilson
Articles have been Reprinted with permission from Black, Slaughter, Black.

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