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04/18/97 KELSO WOODS ASSOCIATION v. WILLIAM K.

April 18, 1997

KELSO WOODS ASSOCIATION, INC.
v.
WILLIAM K. SWANSON, JR., APPELLANT



Appealed From No. 10017-1993. Common Pleas Court of the County of Erie. Judge JOYCE.

Before: Honorable James Gardner Colins, President Judge, Honorable James R. Kelley, Judge, Honorable Jess S. Jiuliante, Senior Judge. Opinion BY Senior Judge Jiuliante. President Judge Colins Dissents.

The opinion of the court was delivered by: Jiuliante

OPINION BY SENIOR JUDGE JIULIANTE

FILED: April 18, 1997

William K. Swanson, Jr., appeals an order of the Erie County Court of Common Pleas which granted in part his counterclaim requesting declaratory judgment in a suit instituted against him by his homeowners' association, Kelso Woods Association, Inc. (the Association).

Mr. Swanson owns fourteen different properties in the Kelso Woods Subdivision, as well as one property in an adjacent subdivision which receives water from the Association. A Declaration of Restrictions recorded in 1962 with the deeds for lots within Kelso Woods includes the following covenants:

1. Acceptance of title to any land in Kelso [Woods] Subdivision shall constitute acceptance of membership in Kelso Association, a non-profit corporation formed or to be formed to provide, maintain, own, regulate and manage property, facilities and services for the use, benefit and enjoyment of all owners...and to equitably apportion and assess to and collect from each owner his share of the costs and expenses thereof.

....

3. Each grantee, by acceptance of title to land in Kelso [Woods] Subdivision, does thereby covenant and agree that he will pay annually...his proportionate share of the cost of providing and maintaining such property, facilities and services, within thirty (30) days of receipt of a bill therefor.

(R.R. at 33a-34a) (emphasis added). When the Association was formed as a non-profit corporation, it enacted by-laws establishing the purposes of the Association, including the following:

To establish such dues, fees and assessments as are required in order that each member pays his pro-rata share of the expenses incurred for the upkeep, maintenance and operation of the general facilities and property owned in common by the corporation and all members, excluding individually owned properties.

(R.R. at 41a) (emphasis added).

The Association provides water to properties in the Kelso Woods Subdivision, which it purchases in bulk from the Erie City Water Authority. Costs of the water system and for the purchase of water are included in general facilities and common property expenses for which assessments may be imposed under the Association's by-laws.

Prior to its fiscal year beginning May 1, 1993, the Association's Board of Directors discovered that it would have to increase annual Association revenues by $2,000.00, to cover increased water purchase costs. To raise the additional revenues, the Board developed a new assessment formula which was challenged by some Association members, including Mr. Swanson, at the Board's April 22, 1993 meeting. At a special meeting on May 5, 1993, the Board approved a general assessment ...


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