Today (August 4, 2020), the NC Court of Appeals issued an opinion that could impact townhome exterior repairs.
The case is Shearon Farms Townhome Owners Ass’n II, Inc. v. Shearon Farms Dev., LLC. Shearon is a “published” case, which means the holding is binding on other parties with similar facts.
Complex appellate cases are difficult to summarize. Facts matter. Different circumstances can lead to different results. That said, here’s the short version of this 19 page decision:
- Several townhome owners reported to the association that the exterior siding on their townhomes was severely damaged, as if it had melted.
- The association determined the damage was “due to abnormal reflections of extremely high heat from the windows on townhome units.”
- The Association filed an action against various parties involved in the construction of the townhomes and the manufacturer of the windows.
The Declaration for this association had similar language to many other townhome declarations to the effect that the association was responsible for:
exterior maintenance upon each Living Unit which is subject to assessment hereunder, as follows: paint, repair, replace and care for all roofs, gutters, downspouts, exterior building surfaces, trees, shrubs, grass, walks, mailboxes, fences installed by Declarant or approved by the Association, exterior post lights (excluding electricity therefor), and other exterior improvements.
However, the Declaration also contained this language: “Casualty Loss Not Included. Maintenance and repairs under this Article arise from normal usage and weathering and do not include maintenance and repairs made necessary by fire or other casualty or damage.”
Based on this language facts, the Court of Appeals determined that the association was not obligated to repair the damage to the homeowners’ property alleged in the complaint. “Applying ordinary contract interpretation principles, the intent of this provision is clear and unambiguous: Shearon Farms is responsible for maintenance and repairs due to expected usage and weathering, but not for maintenance or repairs caused by unexpected damage, such as a fire.” The Court held that the Association had no standing to bring claims against the various parties involved in the construction of the townhomes and the manufacturer of the windows.
Without getting into details that are too complex for a short blog, the Shearon decision also explores “associational standing.” That’s the principle that confers standing on an association to bring suit on behalf of its members. The case lays out some elements to consider for associational standing, but rejected them in this case with these facts.
- Declaration language matters. The Court based much–but not all–of it’s opinion on language in the Declaration that the Association was only responsible for “normal usage and weathering.” Other associations without such language or with different language might have different results.
- Having made its decision, the case doesn’t elaborate on what our firm has struggled with in similar situations: what happens next? This opinion with these facts says the association cannot sue on behalf of townhome owners for exterior repairs due to design or construction defect. Who can? Must each individual owner now repair their own siding using such materials and contractors as they wish? And is the association now responsible for “normal usage and weathering” repairs on siding they did not install and have no idea as to the quality of workmanship?
With such a long opinion, it’s always best to read the actual case if you want to know how it might impact a different association. And then talk to an attorney about your specific facts. The Shearon decision can be found here: https://appellate.nccourts.org/opinions/?c=2&pdf=39539
For any North or South Carolina HOA/condo issues, contact one of the community association attorneys in the Greensboro, Charlotte, Triangle or Coastal offices of Law Firm Carolinas.