Does the Doctrine of Past Practice apply to Homeowners Associations?
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Past practice, in labor law, refers to a practice that has been recognized and accepted by the parties and used several times in the past. It is sometimes the last resort for dealing with a grievance by considering the manner in which a similar issue was resolved before the present grievance was filed. Past practice is to be used as a definition of accepted behavior only by arbitrators to resolve a grievance when contract language is ambiguous or contradictory, or when the contract doesn't address the matter in dispute. Such practice does not have to be written down in the labor agreement, but can arise on the basis of regular, repeated action, or inaction. Generally, the existence of the four following factors will indicate that a "past practice" exists: the practice was clear and applied consistently; the practice was not a special, one-time benefit or meant at the time as an exception to a general rule; both the union and management knew the practice existed and management agreed with the practice or, at least, allowed it to occur; and the practice existed for a substantial period of time and it had occurred repeatedly.
In Common interest developments (CIDs), oversight of the common areas is the responsibility of the homeowners association, whose responsibilities include maintaining common areas, managing the budget (residents pay monthly maintenance fees), and ensuring that residents abide by the community's regulations. An owner of a condominium, however, owns only the interior space of the unit; the exterior walls are considered part of the common space (and thus are maintained by a condominium owners' association). With a CID, the resident owns the entire structure and the land on which it sits. CID residents are thus responsible for the exterior upkeep of their own homes. But the community is responsible for maintaining the common amenities; many also take care of mowing lawns. The rules and regulations, known as covenants, conditions, and restrictions generally cover the exterior appearance of each residence and their goal is to create a uniform environment. Often, these rules and regulations are included in the property deeds.
When properly recorded on a deed conveying land, a covenant ("restrictive deed covenant") has the legal effect of a binding contract term, and may be so enforced. When covenants are instead signed privately among neighbors, as in a mutual compact or agreement, they are still binding upon the signatories and may be litigated if breached. Most planned developments (subdivisions of homes built by a particular builder), including closed or gated residential areas, as well as condominium associations and housing cooperatives, make use of covenants for the benefit of all residential owners and their neighbors. Covenants differ from zoning ordinances in that they are between private parties rather than between a governmental entity and a private party. Thus, a neighborhood association or single homeowner may enforce a covenant as against another homeowner, rather than a city or county enforcing a zoning ordinance as against a private citizen. Another difference is that zoning ordinances are regulations recorded as local laws "on the books," whereas covenants are recorded in private deeds, either as deed restrictions or as neighborhood compacts between private parties. Because covenants are voluntary, they may be more restrictive that zoning ordinances. In order for covenants to be binding, they must be legal. Other covenants that attempt to restrict otherwise legal rights can always be challenged, but, buyer beware, a homeowners' association is a private one in which buyers voluntarily agree to the covenants. Bylaws for these associations generally provide for the election of officers and outline voting rights of the property owners affected by the adopted covenants. Voting rights of homeowners or condominium owners may be delegated to an appointed or elected board or panel of fellow homeowners or condominium owners. As with all delegated authority, their decisions regarding covenants are binding, whether or not individual property owners agree with them. The only recourse may be to wait until the next general election of officers or panel members.
All homeowner associations are subject in some way to the rule of due process. Due process analysis typically applies where the action taken has allegedly deprived an individual of a right affecting life, liberty or property without adequate and appropriate legal process and procedures. There is a distinction between a right and a privilege. Due process issues typically arise in the context of a homeowners association when the property owner is facing a fine or other penalty or the association isn't following the procedures and rules outlined in its bylaws.
In some court decisions, the following test has been used in order to determine whether or not the action of the association meets the basic legal requirements of reasonable due process:
1. Is the action taken or proposed clearly within or reasonably related to the purposes of the association?
2. Is the action clearly within or reasonably related to the association's powers?
3. Is the action taken reasonable with respect to its application and the scope of its application?
4. Has the association acted with reasonable due process in carrying out the action?
Whether the action or proposed action is reasonably related to the purposes of the association and is within the power of the association can normally be decided from a review of the association's legal documents. Whether the action is reasonable in application and scope depends on the circumstances in each case. Whether the association has acted with reasonable due process depends upon whether the association has reasonable rules, and has followed those rules.