Alpert v. Le'Lisa Condominium

SALMON, Judge. On November 17, 1993, Stanley Alpert and his wife, Carol (the Alperts), filed suit against Le’Lisa Condominium and Edward M. Swiggard, John C. Tunell, and Alfred B. Inners, members of Le’Lisa’s Board of Directors (Le’Lisa), in the Circuit Court for Worcester County. The suit alleged, inter alia, that Le’Lisa Condominium’s board had no authority to assign individual parking spaces for the exclusive use of individual unit owners. Appellants asked for declaratory and injunctive relief.

A hearing on the merits was held on June 28,1994 (Eschenburg, J., presiding). Judge Eschenburg reserved judgment, allowing the plaintiffs and the defendants to submit memoranda of law. On August 24, 1994, Judge Eschenburg ordered that the plaintiffs’ case be dismissed with prejudice. The Alperts filed this timely appeal and present three questions, which have been rephrased for clarity: I. Did the hearing judge fail to answer a question raised by appellants in their suit for declaratory judgment?

II

Is the assignment of parking spaces a regulation of the use of a common element or a taking of a portion of each unit owners’ percentage interest in the common elements?

III

Did the condominium association have a duty to disclose to appellants, prior to their purchase of a condominium unit, certain informally adopted rules and regulations concerning parking? ²⁴³ FACTS On February 8,1993, the Alperts bought unit number 205 in the Le’Lisa Condominium, located at 10 East 143rd Street, Ocean City. One of the features that persuaded the Alperts to purchase the unit was their belief that unit 205 had a covered parking space permanently assigned to it. 1 There are 32 units at Le’Lisa, but only 20 parking spaces are located under the building, shielded from the elements. Enough parking is available at Le’Lisa to accommodate all unit owners; however, 12 owners must always park outside. Since 1984, the covered spaces have been assigned based on length of ownership in the condominium: When a unit with a space under the building is sold, the parking space is reassigned to the owner who has been denied covered parking the longest, that is, to the most senior unit-owner who is not currently assigned a space under the building.

This parking allocation method was followed pursuant to a legally unenforceable condominium rule, which had not been promulgated in accordance with the requirements of the Maryland Condominium Act. 2 Nevertheless, except for the Alperts, all unit owners had accepted the aforementioned parking allocation method. ²⁴⁴ The Alperts were not made aware of this parking system until after they had purchased their unit, when they received a letter from Edward M. Swiggard, president of the condominium association, welcoming them to the building. A subsequent letter from Mr. Swiggard stated, “You are not the first buyer who has been misled by the seller or their agent” about the parking situation. The Alperts did not acquiesce to the parking policy. Instead, they continued to use the space under the building that the previous owner of unit 205 had used.

In July 1993, Le’Lisa painted over the number, changing it from 205 to 208. The sign was repainted when the Alperts objected, but it was re-designated as 208 in September 1993. Again the Alperts objected and were rewarded with a new sign indicating the space was assigned to their unit. In March 1994, after the subject suit was instituted, the sign was once again changed to 208.

Section 7 of the Le’Lisa condominium declaration provides that all parking on condominium property is part of the general common elements. Article XIV of the by-laws, at the time the Alperts purchased their unit, stated that “[p]arking in the common elements shall be reserved for the use of owners, their tenants, guestes [sic], invitees and licensees.” No mention was made in either the declaration or the by-laws of any parking regulations or system for assignment of spaces. Appellants received a copy of the declaration and by-laws prior to their purchase of unit 205. The Council of Unit Owners held a special meeting on April 16, 1994; 31 of the 32 units were represented in person or by proxy.

At that meeting, Article XIV of the by-laws was amended to read: Parking in the common elements shall be reserved for the use of owners, their tenants, guests, invitees and licensees, in those designated spaces determined by the Board of Directors based on the length of ownership of the unit. The covered spaces shall be allocated to the owners who have owned their units for the longest period of time. Upon the ²⁴⁵ sale of a unit whose owner has a covered parking space, the parking space will be assigned on the basis of longevity of ownership, that is, the spaces under cover of the building are apportioned for the use of the owners owning the unit for the longest period of time and the date of recording of the deed conveying the unit to the owners shall be conclusive evidence of the time at which the unit owner acquired ownership; or such parking can be otherwise designated by the Board of Directors based upon the manner of designation agreed to by affirmative vote of unit owners having at leas[t] 66|% of the votes in the Council of Unit Owners. The by-law amendment passed with the approval of 93.7 percent of the unit owners.

The Alperts were the only owners at the meeting not to approve the amendment. They abstained. A certificate of the change in the by-laws was recorded in the Land Records office of Worcester County, Maryland. DISCUSSION I. Appellants contend that the hearing judge did not answer their claim that the council of unit owners had no authority to assign individual parking spaces. “In an action properly brought under the Declaratory Judgments Act, the court ordinarily must declare the rights of the parties in light of the issues raised.” Jennings v. Government Employees Ins.

Co., 302 Md. 352, 355 , 488 A.2d 166 (1985); see also Md.Code (1974, 1995 Repl.Vol.), § 3-406 of the Courts and Judicial Proceedings Article. There is no error in dismissing an action when the trial judge declares in some detail in a written opinion the rights of each party. See Downing Dev. Corp. v. Brazelton, 253 Md. 390, 394 , 252 A.2d 849 (1969) (holding that dismissal of action was not error when written opinion “delineated in some detail” rights of parties and reasons for court’s holding); Pope v. Sun Cab Co., 62 Md.App. 218 , 488 A.2d 1009 (1985) (holding that trial court did not dismiss declaratory action without declaration of rights because order incorporated by reference reasons stated in mo ²⁴⁶ tions before court), aff'd, 305 Md. 807 , 506 A.2d 641 (1986).

Judge Eschenburg stated in a written opinion and order that he was “persuaded by Le’Lisa’s arguments” that Le’Lisa’s bylaws allowed the regulation of parking by the condominium: “Parking spaces are common elements, and are under the regulation of the condominium, as embodied in the By-Laws.” This holding answered the question raised by the Alperts and squarely puts before us the issue of whether the hearing judge was correct in his holding.

II

Appellants argue that Le’Lisa does not have the authority to designate specific parking spaces for the exclusive use of individual unit owners without amending the declaration by unanimous consent of the unit owners. The Alperts assert that, because the parking area is designated as a common element in Le’Lisa’s declaration and because no reference is made in the declaration to assignment of parking spaces, the council cannot assign spaces. The Alperts further argue that to do so would encroach on each tenant’s right to access and possession of the common elements, thereby prejudicing the rights of other tenants without each tenant’s consent. 3 ²⁴⁷ The condominium as a form of real property ownership is authorized by the Maryland Condominium Act, Md.Code (1974, 1988 Repl.Vol. & 1995 Cum.Supp.), § 11-101 et seq. of the Real Property Article (RP). All unit owners own the common elements as tenants in common.

RP § ll-108(a); see also Starfish Condo. Assoc. v. Yorkridge Serv. Corp., 295 Md. 693, 703 , 458 A.2d 805 (1983). Each unit owner, therefore, owns an undivided percentage interest in the common elements.

See RP § ll-107(a). “The common elements may be used only for the purposes for which they were intended and, except as provided in the declaration, the common elements shall be subject to mutual rights of support, access, use, and enjoyment by all unit owners.” RP § ll-108(a). Le’Lisa’s by-laws, Article V, § 1, provide that the affairs of the council of unit owners shall be governed by a board of directors, and Article V, § 3(d), authorizes the board to promulgate and enforce “such rules and regulations and such restrictions on or requirements as may be deemed proper respecting ... the use of the general and limited common elements as are designated to prevent unreasonable interference with the use and occupancy ... of the general and limited common elements by the members----” (Emphasis added.) The council of unit owners is expressly authorized by statute to regulate the use of the common elements. See RP § 11—109(d)(12) (“The council of unit owners has ... the following powers: ... [t]o regulate the use, maintenance, ²⁴⁸ repair, replacement, and modification of common elements”) (emphasis added). The central issue to be decided is whether the assignment of parking spaces is a regulation of the use of a common element or a taking of a portion of each unit owner’s percentage interest in the common areas.

This is an issue of first impression in Maryland. If the assignment of parking spaces is a change in the percentage interest in the common elements, Le’Lisa must pass an amendment to the declaration, which must be approved unanimously, to make the change effective; a mere by-law amendment would be ineffective. See RP § ll-107(c) (“Any change [in percentage interest of the common elements] shall be evidenced by an amendment to the declaration”). If the assignment of parking spaces is a regulation of use restriction, a by-law amendment is sufficient to institute the parking system.

See § ll-104(c) (“The bylaws may contain any ... restriction on or requirement respecting the use and maintenance of ... the common elements.”). There is a distinct difference between [cases] in which exclusive use, control, and/or ownership of the common areas is taken from some or all of the unit owners and cases in which some reasonable restrictions or regulation of the common areas is imposed on all owners. In the first instance, each owner’s percentage interest in the common area is altered. In the second instance, the percentage ownership is unaffected.

Jarvis v. Stage Neck Owners Ass’n, 464 A.2d 952, 956 (Me. 1983). “Use restriction” has been defined as a rule “reasonably related to the promotion of the health, happiness and peace of mind of the unit owners.” Hidden Harbour Estates v. Basso, 393 So.2d 637, 640 (Fla.Ct.App.1981). Such restrictions are generally promulgated in order to “prevent activities which might prove annoying to the [other] residents.” Ritchey v. Villa Nueva Condo. Ass’n, 81 Cal.App.3d 688 , 146 Cal.Rptr. 695 (Ct.App.1978). Use restrictions usually take the form of rules that impose a wide variety of restraints on what unit owners may do on or with condominium property.

See, ²⁴⁹ e.g., Johnson v. Hobson, 505 A.2d 1313 (D.C.1986) (rule prohibiting parking unlicensed or unregistered cars in condominium parking lot); Hidden Harbour Estates, Inc. v. Norman, 309 So.2d 180 (Fla.Dist.Ct.App.1975) (regulation of consumption of alcohol in condominium club house); Dulaney Towers Maintenance Carp. v. O’Brey, 46 Md.App. 464 , 418 A.2d 1233 (1980) (rule pertaining to number of pets that may be kept in each unit). [IJnherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property. Condominium unit owners comprise a little democratic sub society of necessity more restrictive as it pertains to use of condominium property than may be existent outside the condominium organization. Hidden Harbour Estates, supra, 309 So.2d at 181-82 . Courts in other states have addressed issues similar to the one presented here.

In Kaplan v. Boudreaux, 410 Mass. 435 , 573 N.E.2d 495 (1991), the issue was whether a by-law amendment altered the percentage interest in the common elements of the owners. Boudreaux owned unit 11 at 90 Park Street Condominium. The condominium master deed designated all land and walkways as common areas. Id., 573 N.E.2d at 496 .

The by-laws prohibited all occupants from using the outdoor common areas for any purpose other than ingress and egress along paved paths. 4 Id., 573 N.E.2d at 497 . Boudreaux wanted to landscape part of a walkway leading from the street to his unit. A by-law amendment was passed by a 77.83 percent vote to exempt Boudreaux’s walkway from the use restrictions placed on all other walkways and reserving to unit ²⁵⁰ 11 the exclusive right to use that walkway, thereby excluding any other unit owner from using the walkway at all. Id., 573 N.E.2d at 499 .

Kaplan, another unit owner, alleged that the by-law amendment reduced his percentage interest in the common property. Id., 573 N.E.2d at 496 . Boudreaux contended that the amendment simply altered the allowable uses of a common area. Id., 573 N.E.2d at 499 .

The Massachusetts Supreme Judicial Court held that the “grant of exclusive use to one unit owner of a common area is sufficient to change the relative interest of the unit owners in that common area.” Id., 573 N.E.2d at 500 . This exclusivity of use was the deciding factor in the court’s holding that the amendment was not a “generalized use restriction” but was, instead, an invalid taking of a portion of each unit owner’s percentage interest in the common areas. Id., In Makeever v. Lyle, 125 Ariz. 384 , 609 P.2d 1084 (Ct.App.1980), Lyle, a unit owner at Laguna West, a condominium regime, began construction of a second story on his unit and a basement under his carport after receiving the approval of twelve of the sixteen unit owners. 5 Id., 125 Ariz. at 386 , 609 P.2d at 1086 . Other owners brought suit to enjoin Lyle from proceeding, alleging the construction was a wrongful taking for the sole and exclusive use of one unit owner of an area belonging to all the unit owners in common, which necessitated the unanimous consent of all the unit owners.

Id. Lyle contended that, because there was no specific provision in the by-laws governing the construction, he needed only the approval of a majority of the other unit owners. Id. The Arizona intermediate court held that a condominium association “must have broad powers in determining and managing the common uses of the general common elements.” Id., 125 Ariz. at 388 , 609 P.2d at 1088 . [T]he power ... to actually convert the common general elements to the exclusive and private use and control of one of the individual owners constitutes a taking of the other ²⁵¹ remaining individual owners’ property.... [I]t is a great step from a delegation of the right to manage one’s interest in the general common elements for common purposes to a grant of the right to dispose of that property interest completely for the sole, exclusive and private use of another.

Id., 125 Ariz. at 389 , 609 P.2d at 1089 (emphasis added). The court held that the construction was a taking. Kaplan and Makeever are distinguishable from the situation at issue here because both involved the grant of exclusive use of a portion of the common area to one unit owner only. What Le’Lisa has done, however, is granted temporary use of a portion of the common area to each unit owner.

Appellants cite a trio of Illinois cases as supporting their position that parking assignments are not use restrictions but are, instead, a taking that diminishes an owner’s interest in the common elements. In Stuewe v. Lauletta, 93 Ill.App.3d 1029 , 49 IllDec. 494, 418 N.E.2d 138 (1981), the Illinois intermediate court held that the Les Chateau condominium could not assign parking spaces to a particular condominium unit owner