Association’s Assessments for Charges Not “Expressly Authorized” by Declaration Were Inappropriate

This case involved a dispute between homeowners (“Owners”) and their property owners’ association (“Association”) over an assessment that was imposed by Association against all lot owners to fund the cost of annual inspections of owners’ lots to ensure that they were in compliance with Association’s governing documents. Owners contended that Association did not have the authority to impose the annual assessment for lot-compliance inspection fees because such an assessment was not “expressly authorized” by Association’s declaration and the fees were not for services “relating to the common area.”

Owners filed suit against association to enjoin it from continuing to use assessment moneys to fund lot-compliance inspections. In their action, Owners argued that a Virginia statute allowed for such assessments only if they were “expressly” authorized in Association’s declaration, and Association’s declaration did provide the necessary authorization. In defense of the action Association contended that the inspections were necessary to ensure that owners’ properties were in compliance with Association’s declaration, articles of incorporation, bylaws, and architectural review board guidelines. Association’s board also obtained a legal opinion that using the assessments to conduct the inspections was consistent with the express language of Association’s declaration. The trial court found in favor of Association and awarded Association $67,481.68 in attorney fees. Owners appealed the trial court’s judgment.

In their appeal, Owners argued: