Court Says HOA Waiver of Restrictions on Leasing of Units Requires Amendment to Bylaws

This case involved a dispute between a homeowners association (“Association”) and the owner of five condominiums that were part of Association (“Owner”) that were leased to third-party tenants by Owner in violation of lease restrictions that were contained in Association’s governing documents.

Owner’s Claims: 

Factually, during 2015 and 2016, Owner purchased five units in the complex governed by Association and then rented out each of the units to third-parties in violation of lease restrictions that were contained in Association’s bylaws. In December of 2016, Association filed a complaint against Owner which sought to enforce the bylaws and terminate Owner’s rental activity. In response to the claims alleged in the complaint, Owner contended that he had not received a copy of the bylaws and was unaware of the restrictions and that he had not been given an opportunity to object to conditions he deemed unreasonable. Additionally, Owner alleged the affirmative defenses of equitable estoppel, waiver, and plaintiff’s unclean hands based on Owner’s assertions that, for the past decade, other condominium owners, including former members of Association’s board of directors, repeatedly leased units to third-parties in violation of the same provisions of Association’s bylaws.

In support of his argument that Association had waived the right to enforce the restriction, Owner offered evidence that other members of Association’s board of directors had offered to sell him units that they were using as rental properties. Owner argued that, because such board members were acting with apparent authority of Association, Association waived the right to enforce the leasing restriction contained in its bylaws against Owner.

The Trial Court Ruling: