|September 24, 2012|
In Louisiana, a recent case highlights the unique challenges in operating condominium regimes, which often require participation and cooperation from the individual unit owners.
Cusimano v. Port Esplanade Condominium Ass’n., Inc. - The Ruling
In Cusimano v. Port Esplanade Condominium Ass’n, Inc., 2010-0477 (La. App. 4 Cir. 1/12/11), 55 So. 3d 931, the Louisiana Fourth Circuit Court of Appeal has recognized that condominium associations must obtain consent from all unit owners in a condominium regime before their interests in or rights to use the common elements can be altered.
Cusimano v. Port Esplanade Condominium Ass’n, Inc. - The Facts
In Cusimano v. Port Esplanade Condo. Ass’n, Inc., the Port Esplanade Condominium Association amended the Port Esplanade Condominium Declaration to transfer exclusive use of certain common elements in the condominium, including a swimming pool and certain passageways, to the unit owners in only one of the two buildings that made up the condominium. It did so without the consent of the unit owners that were being denied use of those particular common elements.
The Fourth Circuit Court of Appeal Ruling - Unanimous Consent
The Fourth Circuit held that, under the Port Esplanade Condominium Declaration, Louisiana’s law of coownership, and the Louisiana Condominium Act, unanimous consent of all of the unit owners was required to re-designate the common elements as “limited common elements” to be used exclusively by only some of the unit owners because all of the unit owners obtained an undivided percentage ownership interest in the common elements when they purchased their units.
The Port Esplanade Condominium Declaration provided that the unit owners’ percentage ownership interest in the common elements could not be altered unless all of the unit owners consented in writing. The court noted that this rule is also provided for in Louisiana Revised Statute § 9:1122.108:
“...the percentage of undivided interest of such unit owner in the common elements of the condominium as expressed in the condominium declaration shall be an inseparable component of the ownership of the unit and shall not be altered without the consent of all the unit owners expressed in an amended condominium declaration duly filed for registry.”
The court recognized that the owner of an individual condominium unit has an undivided co-ownership interest in the common elements such that the use of the common elements must also be determined by agreement of all the owners. Further, co-owners have the right to use the co-owned thing, and as a result, one unit owner cannot prevent another unit owner from making use of the co-owned common elements.
Changing the pool and passageways from common elements to limited common elements, the court reasoned, would prevent some unit owners from using the co-owned property. Thus, the pool and passageways could not be re-designated as limited common elements without the consent of all the unit owners.
The Fourth Circuit Court of Appeal Ruling - Ratification
The Fourth Circuit held that the amendment to the Port Esplanade Declaration that re-designated the pool and passageways from common elements to limited common elements was a relative nullity because all of the unit owners did not consent to it. However, the court held that the amendment was ratified later when the non-consenting owner sold all of its units in a sale that expressly recited that it was executed subject to the amendment. As a result, the purchaser was bound by the amendment re-designating the common elements as limited common elements.
The Upshot: There are Unique Challenges in Operating Condo Regimes
This Fourth Circuit decision highlights the unique challenges in operating condominium regimes, which often requires participation and cooperation from the individual unit owners. Those who develop, manage or purchase condominium developments or individual units can run into problems if they don’t familiarize themselves with the particular laws governing this distinct type of property.
Further, it is essential for developers, managers and purchasers to become familiar with the condominium documents for the specific property they are working with, including the declaration, by-laws, and rules and regulations, because decisions made in accordance with these documents are less vulnerable to legal challenges.