Monday, December 15, 2014

Development Disagreement

Highridge Condominium Owners Association v. Killington/Pico Ski Resort Partners, LLC, 2014 VT 120

By Elizabeth Kruska

When I was a junior in college, my dad asked me what classes I planned to take one semester. I told him I needed to find a social science course that fit my schedule and was interesting to me. He told me to take meteorology. I was confused for a second, since meteorology is a physical science. Without skipping a beat, my dad said, “of course meteorology is a social science. Get 2 people in a room together and they’re going to talk about the weather.” Ba-dum-bum. Everyone’s a comedian.

As true as it is that people will always talk about the weather, it is equally as true that people involved in condo associations will disagree about something.

Here, a group called North Ridge created a condo association called Highridge (this gets confusing with all the ridges) in 1983 in the Town Formerly Known As Sherburne. I didn’t know Sherburne changed its name to Killington in 1999 until I read the footnotes in this case. The things you learn in footnotes!

Anyway, North Ridge planned to build “not more than 250 units,” and to amend the condo declaration from time to time, as needed, to reflect the change in percentage of ownership – presumably with the addition of new units. Units have been added, and the declaration has been changed eleven times to reflect that. The declaration also gives (declares? I think so.) that permission to its successors.

North Ridge defaulted on a mortgage in 1990, and quitclaimed its full interest in Highridge to Killington, Ltd. In 2007, Killington, Ltd conveyed its interest to Killington/Pico (K/P, because that’s shorter). The deed reflected the details from the original deed. K/P decided to apply for a permit to construct additional units in 2011, because under the original rules, they thought that was permissible.

The Association didn’t agree, and thought that it had to give consent to build. The Association filed for a declaratory judgment – essentially asking the court to intervene and say, “hey, this is the rule.” The court did just that and found that North Ridge would have had to ask the Association for permission for additional construction and that K/P was not a successor to North Ridge for purposes of development. K/P appealed.

SCOV first tackles the question of whether additional units could be built without the Association’s consent. Unfortunately, the statute that was in effect at the time the project was formed isn’t much help. SCOV looks at the document itself, reminding everyone that contracts should be read as a whole to figure out the intent of the parties. The document here was clear that it was never intended that the Association had to approve additional units. The Association argued in the trial court that it had been over 20 years since any development was done, and when it was done, that the developer always sought acquiescence of the Association. The court found that convincing, but SCOV doesn’t. SCOV essentially says, “hey, it’s nice that they asked, but it wasn’t necessary and it doesn’t change anything.”

SCOV also finds that, in fact, K/P inherited the rights reserved to North Ridge under the original declaration. SCOV thinks it’s pretty clear that this was allowed under the original declaration. So, SCOV reverses the trial court, and declares that K/P can do its development within the limits of the original agreement.

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