Monday, October 4, 2010
In a Town Home or Condo Complex can a member use the Pool or Tennis Court for Financial Gain?
Say you have a gated association with several swimming pools, tennis courts and lakes with boats.These amenities belong to the titleholders and are free of charge for owners, guests and renters because the fees are included in our monthly dues.Now say a board member or an onwer was using the pool or tennis court for personal gainby charging for swimming or tennis lesson and keeping the money for herself or himself.Can our association be sued in case of injuries to his guests/patrons? Do owners have any recourse against this board member?Answer is:Yes. Any injury can result in a lawsuit against the board director/tennis instructor and the association, and such injuries are not limited to the tennis courts. Generally, owners cannot be sued individually. But should someone be injured while using association common property amenities, and the injury results in a judgment against the association exceeding the insurance policy's limits, all titleholders are obligated to pay the necessary special and emergency assessments to fulfill that award.Owners also are required to fund additional ancillary costs including attorneys hired by the board and any judgment if the damages incurred are not covered by insurance or exceed the coverage limit. The insurer may have the right to deny coverage because of the commercial nature of the tennis instructor's activities and for his excessive use of the facilities.Although the board director/tennis instructor has the right to use the courts for his own personal enjoyment, he may not have the right to dominate the courts for his financial benefit or conduct a business on association common property. Because owners paid to use amenities through their association fees, the deprivation of that use and enjoyment is the basis for a lawsuit against the individual director.Review your association's covenants, conditions and restrictions (CC&Rs) for language explaining whether or not titleholders have priority over owners' guests for amenity usage. If the association's CC&Rs limit titleholder access to amenities, it does not mean the association and/or the tennis instructor is absolved of liability or that his business may continue unabated. Any argument the instructor might make about students being his "guests" is negated by the fact that these patrons are paying him to use the common property.