Daily Development for
Thursday, August 17, 1995

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

CONDOMINIUMS; ASSESSMENTS; COMMON AREAS: A condominium owner may not avoid payment of assessments on the grounds that the condominium board has failed to maintain common areas. Agassiz West Condominium Association v. Solum, 527 N.W.2d 244 (N.D. 1995). The unit owner failed to pay her assessments and insurance over a three year period causing the board to bring suit. At trial the unit owner admitted her failure to uphold her obligations but asserted a right to withhold the money due based on the deterioration allowed in the common areas of her building. The court acknowledged the wrongdoing by the board but noted that the withholding of assessment payments under such circumstances was generally without support throughout the country.

A number of jurisdictions, however, have provided other avenues for unit owners to secure relief. One of those available in the instant case is for the unit owner to sue the condominium association for failure to comply with the condominium's bylaws. The case was ultimately remanded to consider if injunctive relief to compel compliance was required.

Reporter's Comment: The case highlights the distinctions involved in the separate areas of law which make up the hybrid condominium form. Apparently the unit owner felt that its circumstance was analogous to that of a residential tenant, where typically the implied warranty of habitability and its attendant remedies would permit a tenant to withhold rent if the landlord has not performed a significant maintenance responsibility.. A condominum unit owner has a form of ownership in the common areas - that status is distinguishable from a the status of a tenant on landlord's property. Apparently this is a distinction with a difference to the court.

Editor's Comment: How different, really, is the condominium tenant from the leasehold tenant? Both are essentially consumers. Both are helpless to effectuate substantial repairs on their own, and both rightfully expect that their payments to the association/landlord will result in necessary maintenance being carried out. Neither is in a position to bargain effectively over the terms of the agreement with the party charged with responsbility for maintenance.

Remember also that the roots of the "rent withholding" doctrine are in basic contract law. Under ordinary contract law, a party to a bilateral contract who suffers from a major breach by the other party is entitled to withhold performance. The remedies made available to tenants under the implied warranty of habitability were nothing more than an introduction of basic contract principles into an area - landlord/tenant - that previously had failed to follow the rules that applied to all other contracts.

The argument on the other side, of course, is that to permit condominium tenants to withhold rent will deprive the association of critical revenue needed to carry out maintenance duties of benefit to all unit owners. The association, after all, is a product of the unit owners coming together by contract, and not an independent third party landlord with a separate profit motive. (On the other hand, if we say that they have "come together by contract," why can't we say that the contract defines their rights; and in default of a special restriction on remedies, why can't we say that normal contract rules apply? A tough issue.

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