Appeals Court -- January 27, 2012
Facts: In 1977, the Sullivans purchased a lot within the Westwood Hills Community. The Community is served by the Westwood Hills Improvement Association, which provides services and amenities to the Community, including landscaping, snow removal, and general maintenance. The Association is funded by semi-annual assessments paid by property owners within the Community. Generally, when a property is sold, the previous owner passes onto the new owner a certificate, issued by the Association, which represents both the right to benefit from the Association and the obligation to pay the assessments. The Sullivans paid the assessments from 1977 through 1983, but from thereafter refused to pay, arguing that they had never received a certificate from the previous owners and had never agreed to pay.
Issue 1: Was the obligation to pay the assessment in force, despite the Sullivans’ not having a certificate from the Association?
Yes. The court concluded the obligation was in force for three reasons. 1) The Sullivans’ title indicated both the existence of the Association and that the land was subject to certain restrictions. The court therefore found the title conveyed the obligation to pay the assessments and further that the Sullivans knew of it. 2) The court found the Community formed a “common scheme” of uniform restrictions applied to every lot, and that merely not having a certificate was an inadequate reason to say the Sullivans’ lot did not also come with the same restrictions as every other lot, which included the obligation to pay the assessments. 3) Finally, the court concluded that there was an implied-in-fact contract, meaning that Sullivans received a benefit from the Association, and were aware that they would receive this benefit before buying the lot, and therefore had necessarily agreed to pay for that benefit.
Issue 2: Did the Sullivans have to pay the assessment?
No. Since the obligation to pay the assessment passed through the land, and not personally through the Sullivans, the court found that the Sullivans could not personally be required to pay the assessment, but that it could only be collected as a charge against their property, giving the Association a right to take the assessments it is owed out of the proceeds of the sale of the Sullivans’ property.
