New seawall, walkway may fall within exception to alteration rule

Feb 03, 2018

Question: Our condominium vinyl seawall was destroyed by Hurricane Irma. The board has a proposal to replace the vinyl seawall with a riprap stone seawall, along with a 4-foot wide gravel walkway. There was no walkway before, and the walkway is being sold to the owners as a splash guard. Another condominium just down the street is having its wall replaced with riprap by the same contractor, but it will not have a walkway. Our documents require an affirmative two-thirds of the vote for a material alteration. Is the walkway a material alteration? — B.C.

Answer: A “material” alteration is one that palpably or perceptively changes the use, function, form or appearance of a common element. Note that the word “material” here is the opposite of “immaterial”— it has nothing to do with the “materials” used in construction.

With no other considerations, changing a vinyl seawall to a stone seawall (a material change in the form and appearance), and adding a walkway (a change in pretty much every category) would likely constitute a material alteration requiring a membership vote.

However, there is a line of arbitration decisions and cases recognizing what is referred to as the “maintenance” exception to the material alteration rule. Arbitrators and judges have sometimes held that, when a board of directors is making what would otherwise be a material change not for the purpose of changing the use, function, form or appearance of the element, but instead in furtherance of the association’s responsibility to maintain and protect the common elements, it constitutes an exception to the general law, and such alteration does not require membership approval.

For example, in one classic decision in this area, an arbitrator held that changing a Chattahoochee pool deck into a paver stone pool deck (obviously something that would otherwise require a membership vote, at least in a condominium) did not require a vote where the purpose of the change was not to change the appearance, but instead to reduce the association’s maintenance expenses and allow the association to more reasonably maintain both the deck itself and the plumbing underneath.

The problem with this line of cases is that they are variable and rely on the individual facts in each situation. Also, some courts have rejected the exception outright. So, if a condo board decides to move forward with a material alteration without a membership vote on the basis of the maintenance exception, they do so knowing that, if challenged in arbitration or court, the outcome is uncertain. Frankly, these cases are not frequently litigated, as there are few people who, for example, feel so strongly about blocking a gravel walkway that they are willing to invest their time and money in arbitration and, likely, further litigation, knowing that if they eventually lose the case, they will be responsible for the association’s reasonable costs and attorney fees. Still, occasionally, I do have clients who have what would appear to be a clear application of the maintenance exception who submit the issue to a member vote because they know that one or more very motivated and financially-able owners are willing to fight the issue for the long haul (whether reasonably or not).

Q: My condominium association bylaws currently allow for or are silent on the matter of whether owners who live elsewhere and rent their units may be eligible to to run for the board of directors. Can our bylaws be amended to exclude this practice? — N.D.

A: In a condominium or a homeowners association, the eligibility to run for the board of directors is established by the governing documents, usually the articles of incorporation or the bylaws. Generally speaking, all owners are, by default, eligible to serve. In a condominium, the law was amended several years ago to allow for the possibility that the bylaws may establish eligibility restrictions — for example, establishing term limits or providing that only resident owners may serve on the board. So, if you are in a condominium, you would simply need to amend your bylaws to create an appropriate restriction. The procedure for amending your bylaws is found in your bylaws themselves, and it usually requires a member vote.

In a homeowner’s association, the law expressly states that all members of the association are eligible to serve on the board of directors and so, unlike in a condominium, most attorneys feel that residency or term restrictions in an HOA would not be legally enforceable.