QUAIL HOLLOW DECISION

Once again VF Law LLP, the only law firm in the state with a track record of representing Oregon’s homeowner associations in the appellate courts of Oregon, has asked the Oregon Supreme Court to review the recent decision handed down by the Oregon court of appeals in Quail Hollow v. Brownstone et al.

Quail Hollow is a 93 Unit town home project in the southwest Portland area. In 2002 it was discovered that significant water penetration problems leading to mold were affecting a number of the units. In addition, poor drainage on the project caused a variety of problems, including settling and water in the crawl spaces and basement areas.

VF Law LLP brought suit on behalf of the homeowners association and the homeowners. At the urging of lawyers for developer Brownstone Development, the Washington County Circuit Court ruled that the homeowners association was not the proper party to bring a lawsuit, and that each individual owner must bring his or her own suit because the property was held as a planned community and not as a condominium.

While Quail Hollow was developed as a planned community, it operates, for all intents and purposes, just like a condominium. The declaration requires the homeowners association to maintain all of the exteriors of the buildings to “avoid any water penetration into the units.” To require the homeowners association to make repairs as was ruled by the Washington county circuit court, but not to allow the homeowners association to pursue claims related to those repairs seemed, to the Association, to be inappropriate and inconsistent.

Ultimately, the Oregon Court of Appeals ruled in favor of the developer, but its opinion appears to lack a clear understanding of the homeowner association functions. In the opinion, the court said that who was required to fix, and who could sue for the cost of those repairs were two entirely unrelated matters. We, at VF Law LLP, strongly disagree with this position, and as a result have filed a Petition for Review to the Supreme Court on behalf of the Association. The opinion of the court can be read in its entirety at our website, www.nwhoalaw.com.

Here at VF Law LLP we feel it is important to continue our efforts to educate the government officials and judges who deal with homeowners association. Homeowners associations are relatively new in our society and, as such, are not yet well understood by many. The development of a homeowners association creates completely different legal relationships than typical subdivision development and single-family home construction. No one owner can ever be expected to conduct the kind of inspection on all of the common elements when they are buying a single unit in a project like Quail Hollow. To do so would simply be economically unfeasible. As such, all owners must rely on the good faith estimates of developers in creating budgets for maintenance and reserves. When developers know that the project has experienced construction defect problems and will not be able to be maintained or reconstructed for the budgetary items represented at the time of sale, we feel they should be held responsible. VF Law LLP expects that the “petition for review” filed with the Oregon Supreme Court will also have support from the Oregon chapter of the Community Associations Institute (CAI) and the Oregon Washington Community Association Managers (OWCAM). There is no estimate at this time when the Supreme Court may rule.

1. Richard Vial

Attorney at Law

[email protected]