LAW: Fairhousing- Injury
Indiana Court of Appeals, 2006 Villas West II of Willowridge v. McGlothin
HOA Must Follow Fair Housing
An Indiana court has ruled that efforts by a homeowner’s association to enforce an antileasing covenant violated the Fair Housing Act. In the cases, a couple bought a home in the development. Their purchase agreement contained a standard clause prohibiting them from leasing their home “for the protection of owners with regard to financially responsible residents.”
Two years after buying the home, the owners were placed in a nursing home, and the house was leased. Three years later, the homeowner’s association became aware that the home was leased and filed an injunction against the homeowners. The owners sued and both the trial court and later the appeals court ruled in favor of the owners.
The appellate court stated that the HOA’s attempt to enforce the antileasing covenant supported discriminatory housing practices in the area since many more racial minorities in the town leased their residences. In addition, almost no racial minorities were home owners at the development.
Looking at the number of minorities in the community as a percentage of the total population compared to the percentage of minorities at the development, the court decided the prohibition on leasing had a greater impact on minorities than on whites.
The court also dismissed the association’s argument that the antileasing provision protected property values. It noted that leasing didn’t have a negative effect on values and that many other HOA requirements on landscaping, trash removal, etc., provided sufficient protections to property values. However, the court noted that not all antileasing covenants would violate the Fair Housing Act.
Illinois Circuit Court, 2007 Aurora Tri-County Assoc. of REALTORS® v. MLS of N. Illinois
MLS merger voided
An Illinois court has determined that a vote to merge two MLSs was invalid because a quorum was not present for the vote at one of the MLSs, as required in the group’s bylaws. In the case, the board of the Multiple Listing Service of Northern Illinois provided notice to shareholders in its private corporation that a vote on a proposed merger with another MLS would be held during the annual meeting.
The MLS’s bylaws specified that a quorum (more than 50 percent of shareholders) must be present for all votes, and then the decision could be made by a majority vote.
Only five of the 10 REALTOR® associations that held equal shares in the MLS attended the meeting. However, an attorney hired by merger proponents opined that the shareholders present held the majority of votes based on an earlier agreement and therefore constituted a quorum. Those present proceeded to approve the merger.
The five shareholders that had boycotted the meeting sought an injunction. The Illinois Circuit Court ruled the merger invalid because a quorum was not present.
The voting agreement, which allocated votes based on the number of members in each association, did not affect the quorum requirements for shareholder votes, said the court. The court also ordered that all shareholders must attend a meeting within 30 days to vote on the merger.
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