Tuesday, November 27, 2012

Financial Drainage


Requiring new developments to assume maintenance responsibility for detention & retention ponds has become standard practice for local municipalities.  These governing agencies benefit from shifting the financial burden from themselves to Homeowner Associations. This is perhaps an easier pill to swallow for a new community, who can take over the management and maintenance of all aspects of the community from fairly early on in the process. But what happens when a county attempts to shift responsibility for pre-existing systems in older communities?
Earlier this year, a trial court in Georgia upheld an ordinance requiring a Homeowner Association to maintain an individual homeowner’s storm drain system, even though the drainage system had not been turned over to the Association, and the county ordinance was enacted years after the placement of the system.  In John Rymer v Polo Golf & County Club Home Owners Association, Inc., the court rejected the Association's claim of “grandfathering” and concluded that public safety concerns outweighed contractual obligations imposed by the community's Declaration. The court stated that imposing the duty on the Homeowner Association to maintain the drainage system “…enhances the HOA’s ability to enforce its contractual rights under the declaration because if the individual lot owner refuses to maintain the storm water structures on his lot then the HOA has the backing of the ordinance which forces the HOA to ensure lot owner compliance.”  
This would be similar to any other county ordinance that a homeowner violates, with the Association pointing to the government as “the bad guy” when requiring compliance.
Although this decision is not considered “case law” unless it is appealed, the reasoning behind the decision has been upheld in other parts of the country, and Associations should plan their financials accordingly to avoid being liable for property damage caused by flooding, sinkholes, etc.

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